Opinion
Rehearing Denied Oct. 30, 1975.
Page 1368
Dickerson & Levine, Jack Levine, Denver, for plaintiff-appellant and cross-appellee.
Robert W. Smedley, Littleton, for defendant-appellee and cross-appellant.
SMITH, Judge.
Plaintiff, Winter Park Ranch, Inc., appeals from the trial court's refusal to grant it specific performance of a real estate purchase option contract. Defendant Richards cross-appeals the trial court's order that he refund the option price. We affirm.
On March 19, 1971, plaintiff entered into a receipt and option agreement with defendant for the purchase of a tract of land located in Grand County. The transaction took place in the office of Hogan and Stevenson Real Estate Company in Denver, which is also the business office of Winter Park. The agreement was signed by Richards and Mark Hogan, a licensed real estate broker as well as the corporate secretary of the plaintiff.
The full price to be paid according to the terms of the agreement was $34,000, of which $2,000 was paid when the agreement was executed. Defendant was required to furnish a title insurance policy, and plaintiff was under an obligation to tender the remaining $32,000 in cash upon date of delivery of the deed, which was to occur no later than April 5, 1971.
Upon the signing of the agreement plaintiff contacted a title insurance company and requested that it provide a commitment to insure title and that it prepare any necessary financial settlement sheets for a closing on April 5. A title insurance commitment was issued on April 2, subject to the condition that a deed of trust on the property be released.
Prior to April 5, Hogan made several unsuccessful attempts by telephone to contract Richards concerning release of the deed of trust. Richards made no effort to respond to any messages left by Hogan and on one occasion refused to speak with him even though he was home when Hogan called. On these facts, the trial court specifically found that Richards avoided and made no effort to contact Hogan. Consequently, no arrangements to obtain release of the deed of trust were ever finalized.
The deal was not closed by April 5, 1971, nor had plaintiff indicated its unequivocal intent to exercise the option by that date. Hogan wrote to Richards' attorney on April 16, 1971, stating that he was ready, willing and able to close the transaction, but he made no tender of the balance of the purchase price. Although plaintiff filed suit on May 12, 1971, asking for specific performance, it did not tender the $32,000 still owing on the purchase price until September 7, 1973, when it deposited $32,000 with the court during the course of the trial.
The issue on appeal is whether plaintiff's frustrated and unsuccessful efforts to contract defendant prior to the expiration of the option either constituted exercise of the option or excused timely tender of the balance of the purchase price. On cross-appeal the question is whether defendant's behavior was demonstrative of such bad faith that he should be required to return the $2,000 deposit of March 19.
The parties are agreed that the 'receipt and option' agreement was an option contract. As such, it is not an agreement upon which a court may order specific performance in terms of conveyance of land because it does not impose upon the optionee an obligation to purchase. See Columbia Savings v. Counce, 167 Colo. 365, 447 P.2d 977. It merely grants to the optionees the choice of completing the purchase or forfeiting the down payment. Horton v. Hedberg, 143 Colo. 62, 351 P.2d 843; Stelson v. Haigler, 63 Colo. 200, 165 P. 265. The right to purchase the property may be specifically enforced only after the option has been exercised, Miller v. Hiett, 133 Colo. 576, 298 P.2d 394, and time is of the essence in an option contract. McKenzie v. Murphy, 131 Colo. 274, 72 P. 1075.
Plaintiff's appeal is premised on its argument that the attempts by Hogan to reach Richards by telephone constituted a timely attmept to exercise the option. The agreement, however, provides that exercise was to be by payment of the balance of the purchase price. Thus, in order to exercise the option, plaintiff was obligated to tender the agreed amount within the prescribed time. Miller v. Carmody, 152 Colo. 353, 384 P.2d 77; Rude v. Levy, 43 Colo. 482, 96 P. 560; McKenzie, supra. That the plaintiff was ready and willing to make the payment when it became due is not sufficient to alter this result, if he did not, in fact, tender payment. Stelson v. Haigler, supra.
Plaintiff relies on Howard v. Interstate Development Co., 29 Colo.App. 287, 483 P.2d 1366, for support of its position that the telephone calls were a sufficient attempt to exercise the option. That case, however, is inapposite here.
In Howard the optionees served notice on the optioners by registered mail of their intent to exercise the option and deposited the necessary funds in an escrow account after being unable to locate the optionors because they were in another state. Here, plaintiff made no effort within the option period to provide such notice or to escrow the necessary funds. That Hogan did not have defendant's address is not a legally sufficient excuse in the absence of any showing that he could not have discovered it upon reasonable inquiry. Moreover, the decision in Howard is predicated on (1) the optionor's absence from the state which prevented exercise of the option within the requisite period of time and (2) the optionee's unconditional promise to perform in the letter coupled with a deposit of the necessary funds in an escrow account.
The trial court specifically found that defendant did nothing to mislead the plaintiff or to prevent it from exercising the option by tendering payment during the prescribed period. Unless manifestly erroneous or actuated by passion or prejudice, inferences and conclusions to be drawn from the evidence are within the province of the trial court and will not be disturbed on review. Brenaman v. Willis, 136 Colo. 53, 314 P.2d 691. Plaintiff's telephone calls concerned the collateral matter of obtaining the release of the deed of trust, and they cannot be construed as efforts to exercise the option. Hence, defendant cannot be held to have obstructed plaintiff in his efforts to do so.
The basis of defendant's cross-appeal is the issuance on April 2 of a commitment to insure title. By its terms, however, the commitment was conditional on release by the public trustee of Grand County of the deed of trust. Defendant offered no evidence that he had obtained this release; accordingly the trial court found that the defendant failed to furnish a title commitment. This finding cannot be disturbed on appeal. Brenaman v. Willis, supra.
The agreement between the parties provided that, in the absence of such an unconditional commitment, the $2,000 deposit was to be refunded. This obligation is independent of plaintiff's duty to tender the balance of the purchase price. Unless the defendant was himself ready, willing, and able to perform his obligations under the contract, he may not insist upon a forfeiture. Platte Land Co. v. Hubbard, 12 Colo.App. 465, 56 P. 64.
Judgment affirmed.
RULAND and KELLY, JJ., concur.