Opinion
Calkins, Kramer, Grimshaw & Harring, Jeffrey L. Smith, Denver, for plaintiff-appellee.
Paul A. Morris, Boulder, for defendants-appellants.
ENOCH, Judge.
This is an action to recover money paid for an option to purchase certain real property. The Boulder Company, plaintiff-appellee, will be referred to as buyer, and George Walter Poor and Martha J. Poor, defendants-appellants, will be referred to as sellers. The sellers have appealed from the trial court's judgment in favor of the buyer. We reverse.
On or about October 17, 1969, buyer entered into a written option contract with sellers for the purchase of certain real property in Boulder County. In return for such option to purchase the property, buyer paid sellers $4,600. The terms of this option contract were as follows: Within 30 days after date of the contract, the sellers were to furnish a title insurance commitment, 'which shall reflect title to the property to be free and clear. . . .' However, if there were any defects, the buyer was to notify the sellers in writing within 45 days after receipt of the title commitment. The sellers then had 60 days after receipt of the notice:
'to cure the defects and will in good faith exercise due diligence to do so so that if the option is exercised as herein provided Optioner shall on closing date be able to deliver title to the property by good and sufficient warranty deed. . . .'
The buyer could exercise the option to purchase on or before April 8, 1970. If the option was not exercised by that date, the option money ($4,600) was to be retained by the sellers. If the option was exercised, the closing was to take place within 10 days thereafter. The agreement further provided that in the event the transaction was not closed because of sellers' inability to convey title in conformity with the agreement, the money paid by the buyer would be returned. However, in the alternative, buyer could accept such title as the sellers could convey at a reduced purchase price.
The evidence shows that the sellers' agent delivered a title insurance commitment to buyer on December 12, 1968, which was over three weeks past the time specified in the contract. The title commitment excepted three acres in the middle of the 80-acre tract which sellers had previously sold to third parties. There is a conflict in the testimony as to whether buyer had been advised of this prior sale of the three acres, however, we accept the implication in the trial court's findings that the buyer had not been advised. It is admitted that buyer did not give any written notice of the defect to sellers within the 45-day period provided in the option contract. However, the respective agents of the parties discussed the defect on December 12, 1968, and on several subsequent occasions during the option period. The substance of the discussions was that buyer considered the three-acre tract to be vital to the transaction and the sellers gave continuing assurances that they could repurchase the three-acre tract and deliver good title. The sellers did not repurchase the three acres during the option period.
Another problem developed during the option period. A ditch company, with the sellers' consent, straightened an irrigation ditch which was used in the option contract to describe a boundary of the property. This change reduced the total acreage by some minimal amount. There was a conflict in the testimony as to whether the buyer had been informed of this anticipated change prior to the execution of the contract, and again we adopt the implication in the trial court's findings that the buyer had not been informed and had not consented to this change. There was evidence, however, that the sellers could and would change the ditch back to its original course, if necessary.
On April 1, 1970, buyer wrote a letter to sellers requesting a return of the option payment because of the relocated ditch and because the sellers had not yet obtained title to the excluded three-acre tract. The sellers refused to refund the $4,600 and buyer instituted this action.
The trial court based its judgment for buyer primarily on its determination that the sellers' failure to deliver the title commitment within the original 30-day period and the fact that the sellers did not then hold title to all the property breached the contract. We do not agree with this conclusion.
The sellers' failure to deliver the title commitment within the 30-day period did not constitute a breach of the contract. The buyer accepted the late delivery of the title insurance commitment without objection and there is no evidence that either party gave any significance to this issue. This conduct constituted waiver of the breach as a matter of law. Sellers' failure to deliver the title commitment within the original 30-day period cannot, therefore, be the basis for termination of the contract by either party. See Seale v. Bate, 145 Colo. 430, 359 P.2d 356. Further, we do not agree with the trial court that sellers had breached the contract in not delivering a title commitment evidencing clear title. If this fact alone was sufficient to justify the buyer rescinding the agreement, then the next two provisions of the contract would be meaningless. These subsequent provisions provide that, if there is a defect, the buyer is to give notice within 45 days and the sellers then have 60 days to clear the defect. All of the provisions of a contract, must be considered together to determine, if possible, the meaning intended by the parties. Kugel v. Young, 132 Colo. 529, 291 P.2d 695. The clear and unambiguous terms of the contract state that sellers were to provide evidence of clear title and if the buyer then raised any objection to the title, the sellers had additional time to meet this requirement.
The construction of a written document, such as a real estate option contract, is a question of law and the findings and conclusions of the trial court are not binding on review. Meier v. Denver U.S. National Bank, 164 Colo. 25, 431 P.2d 1019.
Buyer elected to terminate the option agreement prior to the expiration of the option period on the anticipation that sellers would not be able to deliver good title. By the terms of the contract, the buyer could not do this and at the same time recover its option payment. See Gould v. Rite-Way Oil & Investment Co., 143 Colo. 65, 351 P.2d 849. The evidence indicates that sellers could have reacquired title to the three-acre tract and changed the irrigation ditch to meet both objections of buyer. The fact that sellers accomplished neither is immaterial since buyer chose to rescind the agreement.
Buyer contends that it cannot be required to finance the necessary step to clear title by converting its option contract into an enforceable contract. There is no provision in this contract which would have placed buyer in this position. Buyer had already paid the initial option payment. No further payment was required of buyer until closing when the sellers would have to be in position to convey good title through their own efforts.
Judgment reversed and remanded with directions to set aside the judgment and dismiss the complaint.
COYTE and SMITH, JJ., concur.