Summary
In Mangum v. Jones, 205 Ga. 661, 657 (54 S.E.2d 603) (1949), this court stated: "... the rule may now be regarded as well settled in this state that in all cases, in order for time to be treated as of the essence of a contract for the sale of land, it should clearly appear therefrom that such was the intention of the parties; as, for example, by a provision that the agreement shall be void unless the act named be completed by a certain day, or by other equivalent expression."
Summary of this case from Dulock v. ShiverOpinion
16723.
JULY 11, 1949. REHEARING DENIED JULY 27, 1949.
Specific performance. Before Judge Fort. Muscogee Superior Court. May 2, 1949.
Foley Chappell, Cohen Cohen, Samuel E. Kelly Jr., and Forrest L. Champion Jr., for plaintiff.
J. A. Davis and Theo J. McGee, for defendant.
1. The allegations of the amended petition were sufficient to state a cause of action for specific performance, and accordingly the court erred in sustaining the general demurrer thereto.
2. The special demurrers were not meritorious, and the court erred in sustaining them.
No. 16723. JULY 11, 1949. REHEARING DENIED JULY 27, 1949.
On September 9, 1947, by a written sales agreement, signed by both of the contracting parties, Joe Jones agreed to sell to W. R. Dunbar, and the latter agreed to buy, subject only to an examination and approval of the seller's title by the buyer's attorney, a described tract of land in Richmond and Columbia Counties, Georgia, at an agreed purchase price of $15,750 in cash to the seller. The seller agreed to pay H. Gould Barrett Company, sales agent, a commission of $750 out of the purchase-money when the buyer's attorney approved the title. The contract obligated the seller to deliver possession of the main residence and other buildings on the property to the buyer within thirty days after the sale was closed, and the cultivated portion of the land which was then rented, on January 1, 1948. By a recital in the contract the seller acknowledged receipt of $3000 "earnest money," which he agreed to deposit in escrow with H. Gould Barrett Company, agent, with the understanding and agreement that it would be returned to the buyer if he (the seller) was unable to deliver good and sufficient title for the property in question. Water charges, taxes, and rents for the current year were to be prorated between the parties as of the date the sale was closed. Ninety days were allowed in which to close the sale, with the understanding that the buyer was to secure his own insurance. On March 24, 1948, for a recited consideration of $5 and other valuable considerations, W. R. Dunbar transferred and assigned in writing all of his rights in, to, and under the contract to Byron B. Mangum, and directed the seller Jones to execute and deliver to him a warranty deed for the property in question on payment of the purchase-money set forth in the contract and on the terms and conditions therein set out.
On December 2, 1948, Byron B. Mangum brought an equitable suit in the Superior Court of Muscogee County against Joe Jones, praying, among other things, that he be required to specifically perform his contract. A copy of the contract and of the transfer and assignment are attached to the petition. The petition after being amended, and in so far as it is material here, alleges: that the plaintiff acquired by written transfer and assignment all of the rights which the contract in question originally invested in W. R. Dunbar; that he had repeatedly offered to comply with all of its terms and conditions; that he and Mr. Dunbar, the original buyer, had on several occasions offered to pay the defendant the full amount of the purchase-money; that he is now ready, willing, and anxious to do so, and by his petition he made a continuous tender of it, but, as alleged, the defendant has since November 26, 1947, refused to comply with the terms of his contract by accepting the purchase-money and conveying the property as his contract obligated him to do. He further alleges: that immediately after the contract was made W. R. Dunbar, the original buyer, employed counsel to examine the defendant's title for the land under contract; that the defendant came by the office of Mr. Dunbar's counsel in Augusta, Georgia, on November 4, 1947; that Dunbar's counsel then advised him (the defendant) that the deed records indicated that his wife owned an undivided half interest in the lands under contract; that the defendant then stated that he had in his possession at the time an unrecorded deed from his wife conveying to him her interest in the lands, which deed the defendant then and there exhibited to Dunbar's counsel; that the defendant was then advised by Dunbar's counsel that, if he would file the deed for record, he was ready to approve the title and close the sale by paying him the purchase-price in full; that the defendant declined to file the deed for record and to close the deal at that time, saying that he was then en route to Philadelphia on a business matter, but would, on his return trip home in a few days, stop off in Augusta, have the deed recorded, and close the matter, but this he failed to do. It is further alleged: that Mr. Dunbar, relying upon the contract and his right to have possession of the residence located on the property in controversy, sold his home; that during the latter part of November, 1947, his attorney notified H. Gould Barrett Company, sales agent, of this and of Dunbar's desire to close the deal for the property involved; that Barrett Company, after communicating with the defendant, received a letter from him, dated December 1, 1947, stating that he would come to Augusta for the purpose of complying with his contract just as soon as he could get other important business matters attended to. By amendment it is also alleged that the defendant after wards, on October 14, 1948, filed and had recorded in Columbia County a deed from Mrs. Geneva Jones, his wife, conveying to him all of her interest in the subject lands, this being the deed which he had exhibited to Dunbar's counsel on November 4, 1947; and that the defendant had wilfully withheld said deed from record until that date. The petition and the amendment allege in great detail continuous efforts on the part of Dunbar before the transfer and assignment of the contract, and of the plaintiff afterwards, to have the defendant close the contract of sale according to its terms, and there is attached to the amended petition, as exhibits, various communications between the defendant and his Augusta counsel, which were in turn forwarded by the latter to the plaintiff's counsel, indicating the defendant's intention to close the deal as soon as his business engagements would permit, among which communications is a telegram, dated July 27, 1948, sent from the defendant's Columbus office to his counsel in Augusta, Georgia, stating: "Joe Jones telephoned from Gulfport, Miss., that he will go to Augusta with everything necessary to close deal when buyer ready." It was further alleged that the defendant's counsel handed this communication to the plaintiff's counsel, and the defendant was then notified that the plaintiff was ready, willing, and anxious to close the sale by paying the full purchase-money, but the defendant for various reasons assigned, principally other pressing business engagements, delayed the closing. On November 2, 1948, the plaintiff sent his Augusta attorney, Rodney S. Cohen, to Columbus, Georgia, the city in which the defendant resides, for the purpose of prevailing upon him to comply with his contract, but said attorney was unable to locate him there, but later contracted him by telephone in Montgomery, Alabama, and in this telephone conversation the defendant stated that he did not intend to comply with his contract. Finally, and on or about November 24, 1948, the plaintiff sent his Columbus attorney, B. H. Chappell, to the office of the defendant for the purpose of tendering to him the full purchase-money for the land involved, but when Mr. Chappell informed the defendant of the purpose of his visit, the defendant stated to him that he would not under any circumstances carry out the contract of sale and that, if a tender of the purchase-money was actually made to him, it would be refused and that he did not propose to and would not carry out the terms of his contract. It was further alleged that the purchase-price agreed upon was the fair, reasonable market value of the property in controversy; that the defendant had title to it; and that equity should require him to specifically perform his contract. It was further alleged that the defendant's wife, on February 19, 1948, filed suit against him in the Superior Court of Muscogee County for divorce, attaching thereto a schedule of his property including that here involved; that in those proceedings he was temporarily enjoined from selling, giving away, disposing of, or encumbering any of his property by lien or otherwise; that a lis pendens notice was filed in the office of the Clerks of the Superior Courts of Richmond and Columbia Counties; and that during the summer of 1948 the plaintiff was informed that the litigation between the defendant and his wife had terminated, and the plaintiff again informed H. Gould Barrett Company, agent for the defendant, of his readiness and desire to carry out the terms of the contract. By amendment it was also alleged that the plaintiff on March 24, 1948, and after counsel originally employed by Dunbar had approved the defendant's title for the land in question, paid to H. Gould Barrett Company, the defendant's agent, the sum of $3000 as a "binder" on the property under contract, and that said amount has since been, and is now, held by said agent for the use and benefit of the defendant. It was further alleged that the plaintiff has no adequate remedy at law.
The defendant demurred generally and specially to the petition as amended. Subsequently the court passed on order sustaining all of the demurrers, general and special, and dismissed the plaintiff's case. He excepted and brought his case to this court for review.
1. The plaintiff elected to test the righteousness of his cause in a court of equity. He asked the court to require the defendant to specifically perform a written contract respecting the sale of land, in which the seller acknowledged receipt of $3000 as a part of the purchase-price. The defendant contends that the allegations of the amended petition are not sufficient to state a cause of action for the relief sought. In our statement of facts we have fully set out what the allegations of the petition and the amendment are and they may be seen by reference thereto. That a transfer or assignment of the contract upon which this suit is based by the original purchaser resulted in an abandonment of it or a novation of the same, and consequently terminated it, is one of the contentions made by the defendant; and one which we now hold is without merit, since such contracts are clearly assignable. Code, §§ 29-114, 85-1805; Evans v. Brown, 196 Ga. 634 ( 27 S.E.2d 300). And it may be safely asserted that it is now well settled by the decisions of this court that, where a contract for the sale of land, which we construe the contract here involved to be ( Ellis v. Bryant, 120 890, 893, 48 S.E. 352), is in writing, signed by both of the parties, is certain and fair, and is for an adequate consideration and capable of being performed, a court of equity, as a matter of course, will decree specific performance. Clark v. Cagle, 141 Ga. 703 ( 82 S.E. 21, L.R.A. 1917A, 993); Funk v. Browne, 145 Ga. 828 ( 90 S.E. 64); F. W. Grand Stores v. Eiseman, 160 Ga. 321, 331 ( 127 S.E. 872); Coleman v. Woodland Hills Co., 196 Ga. 626 ( 27 S.E.2d 226); Irvin v. Locke, 200 Ga. 675 ( 38 S.E.2d 289). In the present case it is alleged that the contract which the plaintiff seeks to enforce is in writing, signed by both of the contracting parties, that its terms are clear and certain, and that the agreed purchase-price is the fair, reasonable market value of the land in controversy. The defendant does not in any way challenge the sufficiency of these allegations; but contends that the petition, when considered as a whole, fails to state a cause of action because it appears therefrom that the purchaser did not comply with one of the terms and conditions of the contract by depositing $3000 as "earnest money" with H. Gould Barrett Company, sales agent; that the contract can not now be performed; and that time was of the essence of the contract and the purchaser failed to comply with his part of the terms and conditions thereof during the effective period of the same. We will consider and dispose of these contentions in the order of their statement.
( a) There is palpably no merit in the contention that specific performance should be refused in the present case because the purchaser (Mr. Dunbar) did not deposit $3000 with H. Gould Barrett Company as a part of the purchase-money. The defendant (Mr. Jones) acknowledged receipt of $3000 as "earnest money," and by the terms of the contract agreed to deposit it in escrow with H. Gould Barrett Company with the understanding and agreement that it would be returned to the purchaser if the seller was unable to deliver good and sufficient title for the land in question. The contract therefore obligated the seller and not the purchaser to make the deposit. The defendant also contends that it may be reasonably inferred from the allegations of the petition, when construed most strongly against the pleader, that the down payment of $3000 provided for by the contract was not actually paid by the purchaser, and accordingly the contract is for that reason without consideration. To all of this we do not agree. Even if it can be said that such an inference must necessarily be drawn from the allegations of the petition as a whole, it would not follow as a consequence therefrom that the contract is without consideration, and this is true for the reason that the contract expressly created between the parties a mutuality of obligation; the agreement on the part of one to sell for a stipulated amount being a sufficient consideration for the promise of the other to buy. Code, § 20-304; Black v. Maddox, 104 Ga. 157 ( 30 S.E. 723); Simpson v. Sanders, 130 Ga. 265 ( 60 S.E. 541); Caldwell v. Hand, 149 Ga. 589 ( 101 S.E. 582).
( b) We have fully set out in our statement of the case what the petition shows with reference to the defendant's ability to comply with his part of the contract in question, and it would unnecessarily lengthen this opinion to repeat these averments here. It is sufficient to say that they are amply sufficient to show that the defendant can presently perform his part of the contract.
( c) The Code, § 20-704 (9), provides: "Time is not generally of the essence of a contract; but, by express stipulation or reasonable construction, it may become so." Among the terms and conditions of the contract under consideration is "Ninety (90) days allowed to close sale," and the defendant insists that this made time of the essence of the contract presently involved; but we think that this contention is also not meritorious. In Ellis v. Bryant, supra, this court said: "But generally time is not of the essence of contracts for the sale of land; for such a construction would result in enforcing a penalty `which equity abhors and the law does not favor'; and interest will generally be treated as full compensation for the delay." And the rule may now be regarded as well settled in this State that in all cases, in order for time to be treated as of the essence of a contract for the sale of land, it should clearly appear therefrom that such was the intention of the parties; as, for example, by a provision that the agreement shall be void unless the act named be completed by a certain day, or by other equivalent expression. Hudson v. Duke, 21 Ga. 403; Taylor v. Baldwin, 27 Ga. 442; McDaniel v. Gray, 69 Ga. 434; Dukes v. Baugh, 91 Ga. 33 ( 16 S.E. 219); Chapman v. Ayer, 95 Ga. 581 ( 23 S.E. 131). "But merely prescribing a day on or before which the act must be done does not render the time essential with respect to such act." Ellis v. Bryant, supra. In DeCamp v. Feay, 5 S. R. 328, it was held that a stipulation that the first installment was to be paid by the vendee on the 1st of October, when a title was to be conveyed by the vendor, was nothing more than a naked covenant to pay money at a particular day; which has never been held to make time of the essence of the contract "for the plain reason that it admits of adequate compensation ascertained by law in the shape of interest." Of course, in cases involving the sale of land, as here, where time is not of the essence of the contract, since specific performance is an equitable remedy which the complaining party does not have as an absolute right, the delay in applying for such relief must not be wilful, nor unreasonably long, but in the circumstances of this case it can not be said that the plaintiff's delay was either wilful or unreasonably long.
2. We have carefully considered the several grounds of special demurrer, all of which were sustained, and have reached the conclusion that they were not meritorious.
Accordingly, we hold that the court erred in sustaining the demurrers and dismissing the petition.
Judgment reversed. All the Justices concur, except Atkinson, P. J., and Wyatt, J., who dissent.