Eaton v. Harwood , 198 Ga. 240 ( 1944 )

Where, in a suit by the holder of an option to purchase land to enforce the option against the obligor therein and one to whom the obligor had conveyed the land under a contract to purchase, it appeared that before giving the option the obligor had made a trade to sell the same land to the one to whom later he had conveyed it, and that the first payment on the purchase-price antedated the option, but the final payment was made subsequently thereto, and where the evidence presented conflicting views as to notice and waiver, the fact that such final payment was made to and accepted by the obligor several months after it was due and after the giving of the option, does not create in the holder of the option an equity superior to that of the grantee in the deed to the same land from the obligor.

No. 14927. SEPTEMBER 8, 1944. Homer L. Eaton filed in the superior court of Morgan County, Georgia, an equitable petition for specific performance, injunction, cancellation of a deed, and for other relief, against J. F. Harwood, a resident of Morgan County, and C. L. Garland, a resident of Robbinsville, Graham County, North Carolina, and alleged that he had an option from Garland to purchase a described tract of land in Morgan County, a copy of which was attached to the petition, dated January 17, 1942, and recorded January 27, 1942. He alleged that in violation of the terms of said option contract (which recited a consideration of one dollar, alleged to have been paid to Garland), Garland, on September 4, 1942, executed a deed to said land to Harwood, which was recorded in the office of the clerk of the superior court of Morgan County on September 18, 1942. He also alleged that the deed was dated January 26, 1942, but that the certificate of the clerk of the superior court of Graham County, North Carolina, stated that Garland appeared before him on September 4, 1942, and acknowledged the execution by him of said deed. A recital in the alleged option contract is as follows: "The offer herein shall be irrevocable for a period of twelve months from the date hereof, and shall remain in force thereafter until terminated by the seller. Such termination may be effected by the seller at any time after the expiration of such period by the giving of ten-days' written notice to the buyer of such termination." The defendants were duly served, Garland being served by publication, as prayed. Only Harwood answered, and he alone of the defendants testified at the trial. The jury returned a verdict in favor of Harwood. The plaintiff excepted to the overruling of his motion for a new trial, as contrary to law and to the evidence.

It appeared from the evidence that prior to January 5, 1942, Garland and Harwood made a trade for the sale and purchase of this land, Garland asking $1500 for it, and in a conversation with Harwood stated that he owed $100, and told Harwood in the presence of Bronson, the agent of the Federal Land Bank, that he was selling Harwood the farm, and authorized Harwood to pay to Bronson what he, Garland, owed the bank, as a part of the purchase-money. On December 5, 1941, Garland wrote Harwood: "Got your card in regard to the farm. I owe less than $200 to the Land Bank. I think it is $176, and if you can get me $1300 cash and take up what I owe, I'll sell it, for I need the cash for it." Again, on January 5, 1942, Garland wrote Harwood: "I can't come down, and if you can get the deed fixed up and send it up here to some one like I wrote you, I'll fix it up. My deed is from Carter Baldwin, and is a warranty deed. You can go to the clerk's office and get the record, and I'll send you the old deed if we trade, and you can go to Bronson and get the amount of the balance due." On January 8, 1942, Harwood, having received Garland's second letter above quoted, paid to Bronson the $176, the amount Garland owed the bank. As soon as he did this, he sent to Garland a deed to the land for Garland to sign. Later, Harwood paid to Garland $1300 and received from him a warranty deed to the land. Harwood testified: "When the Federal Land Bank loan was closed up, I was to send him the money. That was the first step in buying it. Under my trade I was to clear that up first, and then he was to execute me a deed for $1300, and he would sign it and send it back, and I was to send the deed up there to one of my uncles and let him transact the business for me. The Federal Land Bank loan was cleared up on January 19, 1942; that is when I got the letters enclosing the papers back, on January 19, 1942, that is the date. I did not send the $1300 until September, 1942. His proposition was that he wanted the money, and that is what he wrote both of us, me and Eaton, that he wanted the money. The only proposition of purchase I had with him was, I was to pay this Federal Land Bank money and immediately send him the balance. I delayed sending the balance for nine months. As to whether I did not follow this trade and it was not a cash sale at all, I did not, and that is the reason I did not send him the money. . . As to whether I knew I had no contract, I knew we had reached an agreement, and I had made a payment on the land and I had a hold on it. I sent my sister as my representative to see him. If you want to know the reason I didn't go myself, it was because my little boy was bad off with tonsillitis. I told him that I had the papers signed and I wanted my deed. I did not offer to raise the price. What I sent my sister there for was, I wanted to know if he would carry out my contract, my trade. I just wanted to know if he would carry out the trade, and that I was ready to pay the $1300. As to why it was, if the trade I had with Garland was a cash transaction and cash consideration, I did not tender him the money the day when these papers came back on January 19th, and why I waited until September, 1942 — that was our first test to pay off the Land Bank, and as soon as the papers came from the Federal Land Bank I was to pay the balance and he was to give me deeds."

Eaton testified: "The option was signed on January 17, 1942, and on February 9th, twenty days later, Harwood and I got together. After that talk in the Farm Security Administration's office, I wrote this letter to Garland: `Dear Sir: It looks like we have run into a jamb on the farm deal. Mr. Jim and myself have met Mr. Howard at the office here and discussed the matter, and decided that Jim is entitled to the farm deal. Therefore I am man enough to come out of it and not go any further with the trade. I was sorry that this turned up as it did. I wouldn't of made you any offer if I had knew you and Mr. Jim was on the trade. So please return my papers that you have to me. Yours truly, Homer L. Eaton.'"

W. H. Bronson testified: "I am an employee of the National Farm Loan Association that serves the Federal Land Bank loans, services them. I know Mr. Jim Harwood here, and I knew C. L. Garland. That is the same C. L. Garland who bought this old place from you out there that we have been talking about. What Mr. Garland told me about this trade and about the money to pay the balance on this loan was, he said he sold the property to Harwood and that Mr. Harwood would pay the balance due. He told me to accept it. As to whether he instructed me to notify him when Mr. Harwood paid it, he just said Harwood would pay the balance. That conversation between us all was before the date of this paper (identifying receipt). This conversation was about the middle of November, I judge, between the 15th and 20th of November, 1941. Mr. Harwood paid that one hundred and eighty dollars on January 8th, 1942. Mr. Garland never did pay it." On January 17, 1942, Garland gave a written option to Eaton to buy the land at any time within twelve months from its date, for the sum of $1595. The special grounds of the motion for new trial are but amplifications of the general grounds, that the verdict is contrary to law and to the evidence. The testimony of the parties and of their witnesses did not altogether harmonize, but the jury were authorized to find the facts to be in accordance with the foregoing statement. An analysis thereof, taken in connection with the pleadings, will show that the jury were warranted in finding that before Eaton secured his option, Garland had entered into a contract with Harwood for the sale and purchase of the property, that Harwood had paid a portion of the purchase-money, and that Eaton had knowledge thereof. Counsel for the plaintiff in error contend to the contrary, and insist that the record does not show that Harwood had a contract with Garland prior to the date of the option; their position being that the only offer made by Garland to Harwood was in the letter dated December 5, 1941 (and reiterated in that of January 5, 1942), in which Garland wrote Harwood, "If you can get me $1300 cash and take up what I owe, I'll sell it, for I need the cash for it;" and that this offer was not accepted by Harwood unequivocally and unconditionally, and without variance of any sort. Independently of what was contained in the two letters above referred to, there was testimony by other witnesses to the effect that on a date prior to Eaton's option, Harwood had entered into a trade with Garland for the purchase of the land on definite terms, and had paid a part of the purchase-price. The brief of counsel for the plaintiff in error contains the following: "No waiver of the offer to Harwood was made by Garland prior to Eaton's option and notice thereof to Harwood. And when Harwood paid for and received his deed in September, 1942, he did so after Eaton's option had intervened. Even if Garland did accept the purchase-price then, it was not in pursuance of any agreement existing prior to, but actually after, Eaton's rights under his option were fixed." We have not overlooked this contention, but are of the opinion that under the evidence the jury were authorized to find that a valid contract of purchase and sale was in existence before the time Eaton's rights, if any, were acquired under his option.

It is further insisted by counsel for the plaintiff in error that, under Harwood's own testimony, the only trade he ever had with Garland was that he, Harwood, was to pay to the Federal Land Bank what Garland owed it, and was to pay the balance to Garland immediately upon the cancellation of the bank's papers; but that, although Harwood paid the bank on January 8, 1942, and the papers were cleared for cancellation on January 19, 1942, it was not until September, 1942, that Harwood sent to Garland the balance of the purchase-price. From these facts, the deduction is sought to be drawn that no contract of purchase and sale existed between Harwood and Garland at the time of the execution and delivery of the option to Eaton, since Harwood had failed to comply with one of the terms, to wit, the payment of the balance immediately, etc., and hence Eaton took his option free from any existing equity in favor of Harwood. We are not here concerned with what rights were available to Garland against Harwood on account of the delay in making the final payment. Suffice it to say that Garland in September accepted from Harwood the deferred payment and made him a deed. "Time is not generally of the essence of a contract; but, by express stipulation or reasonable construction, it may become so." Code, § 20-704 (9). Time may be made of the essence of a contract for the sale of lands by express agreement or reasonable construction, but ordinarily courts lean against such construction. Ellis v. Bryant, 120 Ga. 890 (48 S.E. 352). If time is of the essence of a contract, it may be waived; and subsequent conduct of the obligor may have that effect.Stewart v. Ellis, 130 Ga. 685 (61 S.E. 597); King v.Lipsey, 142 Ga. 832 (83 S.E. 957). When Garland accepted Harwood's money, which completed the last payment, and made him a deed, it was as clear a waiver as could well be imagined.

The evidence is full of contradictions, and it is apparent that some attempt at double-crossing was made. Also, it is difficult under this record to explain the conduct of Garland. But as between the respective rights of Eaton and Harwood, there is evidence to sustain the verdict, which has the approval of the trial judge.

Judgment affirmed. All the Justices concur.