Opinion
No. 8813.
June 30, 1978. Rehearings Denied September 15, 1978. Writ Refused October 26, 1978.
APPEAL FROM TWENTY-FOURTH JUDICIAL DISTRICT COURT, PARISH OF JEFFERSON, STATE OF LOUISIANA, HONORABLE FRED S. BOWES, J.
Beard, Blue, Schmitt, Mathes, Koch Williams, A. J. Schmitt, Jr., New Orleans, for plaintiff-appellant.
Edwards, Porteous Lee, G. Thomas Porteous, Jr., Gretna, for defendants-appellees.
Before REDMANN, GULOTTA, BOUTALL, SCHOTT and GARSAUD, JJ.
By written agreement, Barnett Enterprises, Inc. agreed to buy and Thomas J. Ward and Floyd A. Sinclair agreed to sell two lots of ground in Jefferson Parish. Barnett sued for specific performance and was met by defendants' motion for summary judgment, which contended that the agreement had expired by its own terms for lack of attempted performance by all parties. Judgment was rendered granting defendants' motion for summary judgment and dismissing plaintiff's suit. Plaintiff appealed.
The pertinent portions of the agreement are as follows:
"Act of sale at expense of purchaser to be passed before purchaser's Notary, on or prior to September 30, 1976. In the event bona fide curative work in connection with title is required, the parties herewith agree to and do extend the time for passing of act of sale by sixty days.
* * * * * *
"The seller shall deliver to purchaser a merchantable title, and his inability to deliver such title within the time stipulated herein shall render this contract null and void, reserving unto purchaser the right to demand the return of the deposit from the holder thereof, and reserving unto agent the right to recover commission.
"In the event the seller fails to comply with this agreement for any reason, within the time specified, the purchaser shall have the right either to demand the return of his deposit in full plus an equal amount to be paid as penalty by the seller; or the purchaser may demand specific performance, at his option.
"In the event the purchaser fails to comply with this agreement within the time specified, the seller shall have the right to declare the deposit ipso facto forfeited, without formality beyond tender of title to purchaser; or the seller may demand specific performance."
Since we are considering a summary judgment, the basic issue is whether the contract became null on the basis of uncontested material facts relating to these provisions. The uncontested facts are that prior to the proposed sale date of September 30, the purchaser's notary was preparing for the passage of the act of sale and had ordered mortgage and conveyance certificates upon the property. Upon receipt of these certificates from the clerk of court, initialed September 17, the notary discovered, in addition to an anticipated mortgage and lease, an unexpected inscription of another mortgage on one certificate (making a total mortgage debt greater than the purchase price) and a lease on the other certificate. The proposed sale was not set and neither party took any action to peace the other in default. Instead, it is asserted by appellant, its attorney notified the other parties and the agent, by telephone on or before September 29th, that it was necessary to cancel these inscriptions before passage of the act, requesting that this be done as soon as possible. These telephone calls, and any other oral notification, are denied, however, and are in contest.
The sole basis of defendants' motion for summary judgment was that, irrespective of whether any curative work was necessary, and irrespective of whether defendants were verbally notified of any necessary work, defendants were not notified in writing and therefore the sixty-day-extension provision was never effectively invoked by plaintiff. As the trial judge was of the opinion that a written notice extending time was required, the contested fact of verbal notice was immaterial. It is stipulated that there was no written notification prior to September 30th. Several days later, by letter dated October 4 and mailed with postmark of October 5, the purchaser's attorney did make written notification and request for clearing of title. By letter written October 5 and postmarked October 5, the sellers notified the agent that they considered the agreement null and void in accordance with its terms and authorized him to return the purchaser's deposit.
The primary dispute between the parties is the interpretation of the provision for extension of time for passing the act of sale in the event bona fide curative work is required. The argument is whether the language of the contract requires written notice prior to the original expiration date in order for the sixty-day extension to be operative, or whether the language, given the proper circumstances, is self-operative with no notice being required to extend the time for the closing of the act of sale. The language in question is as follows:
"In the event bona fide curative work in connection with title is required, the parties herewith agree to and do extend the time for passing of act of sale by sixty days." [Emphasis added.]
While we agree that an extension of a contract for purchase of immovables requires a written agreement where no extension of time is provided for in the contract, or where the extension period, by its terms, has already expired, it is nonetheless our view that the clause in question in and of itself extends the time with nothing more than the need for curative work. By the language "the parties herewith agree to and do extend," etc., the parties have agreed beforehand, in writing, to extend the time for closing if bona fide curative work need be done. This is the plain meaning of those words. Such work presumably was required here (perhaps, an act of correction of property description in the extra lease or mortgage). Further, there is no modification or change in the original terms of the agreement which would require a writing, but merely an implementation of a provision already made part of the agreement. Thus, no notice, written or otherwise, is needed to give effect to the provision and to extend the time.
The defendants-appellees rely heavily on the case of Wells v. Spears, 255 So.2d 215 (La.App. 1st Cir. 1971). We do not believe that case is applicable, as there the trial court found that, before any notice of title defect was given to the seller, even the extension period had elapsed (at least the purchaser did not prove the contrary), thus terminating the agreement. Here, all parties agree that notice of title defect was given within the extension period.
We believe, therefore, that it was error for the trial court to grant a summary judgment, as mover was not entitled to judgment as a matter of law. As agreed between the parties, this contract was automatically extended for sixty days (assuming the necessity for curative work), and the result of that extension in terms of plaintiff's demand for specific performance must be resolved by a trial on the merits. According, the decision of the trial court is reversed, and the matter is remanded for a trial on the merits consistent with this opinion.
REVERSED AND REMANDED.
The basic issue is the interpretation of the quoted provisions for extension of time for passing the act of sale in the event bona fide curative work is required. A similar provision was considered in the case of Wells v. Spears, 255 So.2d 215 (La.App. 1st Cir. 1971) and it was determined that because there was no notification of title defects to the seller prior to the time for passage of the act of sale, the agreement became null and void. In that case the court stated that written notification would be required, however, I do not consider that as controlling here because of the difference in the factual situation. Nevertheless, I find it persuasive in view of our decisions in the cases of Bagby v. Clark, 327 So.2d 633 (La.App. 4th Cir. 1976) and Alley v. New Homes Promotion, Inc., 247 So.2d 218 (La.App. 4th Cir. 1971.)
Considering the principles announced in these cases, and in the cases cited and discussed therein, I have no difficulty in saying that there was no putting in default of one party by the other prior to September 30 under the terms of the contract or under the provisions of Civil Code Article 1911. Accordingly the contract became null and void unless extended by written notice. But it is contended before us that the contract is automatically extended or that oral notification will suffice to activate the extension clause under our contract.
In this regard I refer to the other quoted provisions of the agreement and point out that they provide that the sellers "inability to deliver such title within the time stipulated herein shall render this contract null and void" and that in such a case the only result is return of the deposit and recovery of agent's commission. However if the seller fails to comply with the agreement "for any other reason" then purchaser can demand double his deposit as penalty or specific performance. Thus in the case before us an inability to perform may be differentiated from a refusal to perform, invoking one or the other result specified. For this reason I would accord the required notice in this case the same formality required in contracts of sale of real estate generally, that it be in writing. If we say that a simple oral notification can serve as the basis for the purchaser's right of deposit return changing into a right of specific performance we run contrary to the underlying principle in Alley v. New Homes Promotion, Inc., supra, and promote the swearing contest at trial that previous courts so studiously have avoided.
I conclude that under the terms of this contract as quoted above, a written notification was required to be made to the seller prior to the last day for passage of the act of sale, September 30, 1976, in order to activate the 60 day extension period for title curative work. Since no written notice was given, the defendants were entitled to judgment as a matter of law, and the contested oral notification is not a material fact that would prohibit summary judgment. I would affirm the judgment.