Case Title: G & M Homes Inc. v. Pearson

Citation: 

Docket Number: 010423

State: virginia

Court: Virginia Supreme Court

Date: 2002-01-11T00:00:00Z

Document:
Present:  All the Justices 
G & M HOMES II, INC. 
v.  Record No. 010423 
 
SHIRLEY V. PEARSON, ET AL. 
 
OPINION BY JUSTICE CYNTHIA D. KINSER 
 
 
 
 
 
 
 
   January 11, 2002 
G & M HOMES II, INC. 
 
v.  Record No. 010605 
 
SHIRLEY V. PEARSON, ET AL. 
 
FROM THE CIRCUIT COURT OF LOUDOUN COUNTY 
Joanne F. Alper, Judge Designate 
 
 
In this appeal, the dispositive issue is whether a contract 
for sale of real property is valid and binding absent the 
signature of one of the parties identified therein as a seller.  
Because we conclude that the contract is incomplete and not 
enforceable, we will affirm the judgment of the circuit court in 
favor of the defendants-appellees. 
FACTS AND MATERIAL PROCEEDINGS 
 
The real property at issue in this appeal consists of nine 
lots in the “Division of the Land of C. Herbert and Shirley V. 
Pearson” located in Loudoun County.  The property had been owned 
by Shirley V. Pearson (Pearson), and her husband, C. Herbert 
Pearson, as tenants in common, until Mr. Pearson’s death on 
November 7, 1998.1  In the residuary clause of his last will and 
testament, Mr. Pearson devised his real estate to his wife.  
However, Pearson signed a disclaimer with respect to the nine 
lots.2  The effect of the disclaimer, if valid, would be to allow 
Mr. Pearson’s interest in that real estate to pass to the 
Pearsons’ daughter, Herta Ann Pearson Gould (Gould).3  Pearson 
executed the disclaimer on July 15, 1999, but did not record it 
in the land records of Loudoun County until August 6, 1999. 
On the same day that she executed the disclaimer, Pearson 
also entered into a contract to sell the nine lots at issue to 
G & M Homes II, Inc. (G & M Homes).  Earlier, on June 9, 1999, 
                     
1 The Pearsons initially held the property as tenants by the 
entirety with the right of survivorship, but they conveyed it to 
themselves as tenants in common by deed dated March 13, 1985. 
 
2 In the disclaimer, Pearson stated that, pursuant to Code 
§ 64.1-191, she “decline[d] to accept any beneficial interest in 
or through [her] husband’s half of certain jointly owned real 
property in Loudoun County, Virginia, described on the 
attachment hereto [listing the nine lots at issue], with respect 
to which I am surviving joint tenant by the entirety.”  She 
further stated that, pursuant to Code § 64.1-188, she disclaimed 
the property “[t]o the extent that, by operation of law, [she] 
might stand to inherit the aforesaid property pursuant to 
Article II(A) of the will of C. Herbert Pearson [the residuary 
clause].”  Whether it was necessary for Pearson to disclaim 
under both of those statutory provisions is not an issue in this 
appeal.  However, as already noted, the Pearsons owned the 
subject property as tenants in common at the time of Mr. 
Pearson’s death. 
 
3 Mr. Pearson devised his real estate in Loudoun County to 
Gould in the event that Pearson did not survive him.  Under Code 
§ 64.1-190(A), disclaimed property descends as if the 
 
2
Pearson had signed a letter of intent providing for G & M Homes’ 
purchase of ten lots, with the provision that Pearson could 
elect to remove one lot from the contract before July 15, 1999. 
 
The pertinent provisions of the contract of sale deal with 
the identity of the seller and the statement that the identified 
seller owns the subject property: 
 
THIS contract made and entered into this 15th day 
of July, 1999, by and between SHIRLEY V. PEARSON and 
HERTA ANN GOULD, herein referred to as “Seller,” and 
G & M HOMES II, INC., a Virginia corporation, herein 
referred to as “Purchaser,” provides that: 
 
 
WHEREAS, the Seller is the owner of nine (9) 
certain parcels of real estate in Loudoun County, 
Virginia, more particularly described as Lots 1A, 1B, 
2, 3, 5, 7B, 8, 9, and 10, Division of the Land of C. 
Herbert and Shirley V. Pearson[.] 
 
The last page of the contract contains two signature lines 
for the “Seller” and one signature line for the 
“Purchaser.”  However, only Pearson and G & M Homes 
executed the contract; Gould never signed it. 
 
Between July 15 and September 2, 1999, additional 
negotiations took place between the parties, including the 
preparation of at least one addendum to the contract of sale.  
However, in a letter dated September 2, 1999, an attorney 
representing Pearson and Gould advised G & M Homes that “my 
clients are not going forward in this matter” and returned G & M 
___________________ 
disclaimant predeceased the decedent.  A disclaimer relates back 
to the date of death of the decedent.  Code § 64.1-190(B). 
 
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Homes’ deposit check.  Subsequent to September 2, G & M Homes 
made another offer to purchase the property, which included a 
$40,000 option deposit check payable to Pearson and Gould.  
Again, the attorney for Pearson and Gould advised G & M Homes 
that Gould had given explicit instructions to reject the most 
recent offer and to return the check. 
 
Because the sale of the property to G & M Homes was never 
consummated, G & M Homes filed a bill of complaint against 
Pearson and Gould, seeking specific performance of the contract 
of sale, damages for breach of contract, and declaratory 
judgment that the contract is valid and binding “to the full 
extent of the interest in the property owned by” Pearson.4  
Cross-motions for summary judgment were filed by G & M Homes, as 
well as Pearson and Gould.  G & M Homes claimed that it was 
entitled to specific performance of the contract of sale both as 
to Pearson’s one-half interest in the property and the one-half 
interest devised to her by Mr. Pearson.  In contrast, Pearson 
and Gould asserted that the contract was incomplete and thus 
invalid. 
 
The circuit court granted the defendants’ motion for 
summary judgment with respect to G & M Homes’ claim for specific 
performance.  The court subsequently directed G & M Homes to 
 
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elect to proceed on only one of its two remaining counts in the 
bill of complaint:  breach of contract or declaratory relief.  
G & M Homes decided to proceed on its claim for declaratory 
relief. 
 
After hearing testimony and reviewing relevant documents 
regarding that claim, the circuit court granted the defendants’ 
motion to strike the evidence and found, as a matter of law, 
that Pearson had sole record title to the subject property as of 
July 15, 1999, and that the contract of sale signed on that date 
was not valid and binding on Pearson and G & M Homes because of 
the absence of the signature of Gould, a party to the contract.  
The court subsequently entered a decree incorporating its 
reasons stated from the bench and memorializing its ruling.  
G & M Homes appeals from that decree. 
ANALYSIS 
 
The dispositive issue in this appeal concerns the validity 
of the contract for sale.  G & M Homes contends that the 
contract is complete and enforceable without Gould’s signature.  
Relying on Code § 64.1-194, G & M Homes asserts that Pearson’s 
right to disclaim succession to her husband’s one-half interest 
in the property was barred because she exercised control over 
that interest by executing the letter of intent and the contract 
___________________ 
4 G & M Homes also named the trustee under a credit line 
deed of trust as a party defendant.  The trustee filed an answer 
 
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of sale prior to filing the disclaimer.5  Thus, G & M Homes 
maintains that Pearson owned both of the two moieties of the 
property when she signed the contract of sale and that, 
therefore, Gould’s name on the contract of sale is mere 
surplusage. 
 
In the alternative, G & M Homes argues that, if Pearson’s 
disclaimer is effective and Gould owns her father’s one-half 
interest, the contract is, nevertheless, valid and binding as to 
Pearson’s one-half interest in the property.  Relying on this 
Court’s decision in Wright v. Bryan, 226 Va. 557, 311 S.E.2d 776 
(1984), G & M Homes contends that the absence of Gould’s 
signature does not affect the validity of the contract as 
between Pearson and G & M Homes.  Thus, G & M Homes posits that 
it is at least entitled to specific performance of the contract 
as to Pearson’s one-half interest, or declaratory judgment that 
the contract is binding and enforceable as to Pearson. 
 
In response, Pearson and Gould assert that the contract 
lacks the signature of a necessary party and, thus, is not 
___________________ 
but has not participated further in this suit. 
 
 
5 Code § 64.1-194 places a restriction upon the right to 
disclaim by specifying, in pertinent part, that “[a]ny . . . 
assignment, conveyance, encumbrance, pledge or transfer of 
property or interest therein or contract therefor . . . made 
before the expiration of the period in which the disclaimant may 
disclaim . . . bars the right to disclaim as to the property or 
interest.” 
 
 
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complete or binding as to any of the parties.  In support of 
their position, Pearson and Gould point out that the language 
and form of the contract of sale demonstrate that Pearson and 
Gould, as a single unit, were to be the seller.  We agree with 
Pearson and Gould. 
 
First, our decision in Wright is distinguishable.  G & M 
Homes asserts on brief that the real estate purchase contract at 
issue in that case mirrored the one at issue in this appeal.  
G & M Homes is wrong.  Contrary to its assertion, the contract 
in Wright did not list both the husband and wife as the 
“Seller.”  Instead, only the husband, Ray L. Wright, was 
referred to as the “Seller.”6  His wife’s name did not appear 
anywhere in the contract, and only the husband executed it.  
Wright, 226 Va. at 558, 311 S.E.2d at 777.  Thus, we concluded 
that the contract did not lack mutuality merely because the 
seller’s wife had not executed it, and that it remained valid 
between the executing parties and could be the foundation of an 
action at law for breach of contract.  Id. at 561, 311 S.E.2d at 
778.  However, the absence of the wife’s signature precluded 
specific performance of the contract because the property at 
                     
6 This fact is not necessarily evident from our opinion in 
that case.  However, an examination of the contract itself, 
included in the joint appendix, pp. 12-13, filed with the appeal 
in that case, does show that only the husband was named as the 
“Seller.”  On brief, G & M Homes referenced that appendix but 
apparently looked at the wrong contract. 
 
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issue was held by the husband and wife as tenants by the 
entireties.  Id.
 
In contrast to the contract in Wright, the contract of sale 
at issue here identifies Pearson and Gould, collectively, as the 
“Seller.”  The singular term “Seller” is consistently used 
throughout the contract.  Notably, paragraph 20(A) contains a 
warranty that the “Seller is the sole fee simple owner of the 
Property.”  Finally, on the last page of the contract, two 
signature lines are located under the caption “SELLER.”  This 
language and form of the contract of sale indicate that Gould’s 
signature was understood by the parties as necessary in order to 
have a complete and binding contract as to any party.  Cf. Marks 
v. Williams, 222 Va. 40, 44, 278 S.E.2d 806, 808 (1981) (the 
absence of a signature line for the seller’s wife “indicates 
that the wife’s agreement was not a precondition of the 
contract”). 
 
The use of the term “Seller” throughout the contract of 
sale to identify both Pearson and Gould is consistent with 
Pearson’s execution of the disclaimer on the same day that she 
entered into the contract of sale.  However, a determination as 
to whether Gould acquired an interest in the property by virtue 
of that instrument, either when Pearson signed it or when she 
recorded the disclaimer, or by some other means, is immaterial 
to our analysis.  It is of no consequence whether Pearson was 
 
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the sole owner of the property when she signed the contract of 
sale on July 15, 1999, because we have held that an individual 
may contract to sell that which she does not own at the time of 
contracting so long as she is able to convey good title when 
required to do so by the terms of the contract.  See, e.g., T. 
Nevil Ingram, Inc. v. Lunsford, 216 Va. 785, 786, 224 S.E.2d 
129, 130 (1976); Jennings v. Realty Developers, Inc., 210 Va. 
476, 479-80, 171 S.E.2d 829, 832 (1970); Spruill v. Shirley, 182 
Va. 342, 348, 28 S.E.2d 705, 708 (1944).  Therefore, Gould could 
contract to sell the property at issue, and contractual language 
identifying Gould, with Pearson, as the “Seller” cannot be 
dismissed as mere surplusage. 
 
Although we base our decision on the language of the 
contract, additional facts of record in this case demonstrate 
that G & M Homes understood that it was contracting with both 
Pearson and Gould for the purchase of the property.  This 
knowledge on the part of G & M Homes is evidenced by its option 
deposit check made payable to both Pearson and Gould and by the 
negotiations between the parties that occurred after July 15, 
1999, in G & M Homes’ attempt to obtain Gould’s signature on the 
contract of sale.  In fact, during those continued negotiations, 
G & M Homes executed at least one addendum to the contract.  
That addendum, like the original contract, referred to Pearson 
and Gould as the “Seller.” 
 
9
 
In support of its motion for summary judgment before the 
trial court, G & M Homes also included Pearson’s response to a 
question in its second set of interrogatories.  That response 
further demonstrates the scope of G & M Homes’ knowledge with 
regard to the identity of the “Seller”: 
 
I, Shirley V. Pearson, could not execute that Contract 
of Sale, or go to closing, alone.  Both my daughter and I 
were required to sign and to close. This is made clear on 
the face of the contract, and by the course of negotiations 
before and after July 15, 1999.  All parties, and their 
agents, including Eric V. Zimmerman, Susan Rutherford and 
Jim Brooks knew that Herta Ann Gould’s consent was 
required.  They knew of my intent to disclaim a portion of 
the property (I had decided to do so on or before May 17, 
1999) and knew that such a disclaimer would be drafted, 
signed and recorded.  This, I believe, is why Mr. Grimm 
failed to take a copy of the contract we signed on July 15 
with him – he knew it was not valid and enforceable until 
it was reviewed and signed by my daughter, whom he knew was 
vacationing in Maine at the time.  This is why Mr. Grimm 
provided earnest money checks made payable to me and my 
daughter.  This is why Mr. Grimm continued to negotiate 
with my daughter to gain her consent after July 15, 1999 
and indeed, well after the disclaimer I signed on July 15 
was recorded.  This is also why Mr. Grimm’s agent, Susan 
Rutherford, phoned me in early September to recommend a 
prospective purchaser other than her own principal, Mr. 
Grimm.  This is why Mr. Grimm never suggested that Herta 
Ann Gould was not a necessary party to the sale until this 
suit was filed.  This suit is completely contrived and 
belies the clear intent of the parties before and after 
July 15, 1999. 
 
 
The circumstances in the present case are analogous to the 
facts in Raney v. Barnes Lumber Corp., 195 Va. 956, 81 S.E.2d 
578 (1954).  There, a lumber company sought specific performance 
of an alleged contract to sell timber lands owned by a mother 
and her son.  Id. at 957, 81 S.E.2d at 580.  We concluded that 
 
10
there was no evidence that the son had ever signed any document 
that demonstrated his agreement to convey his one-half interest 
in the property and that he had not, either expressly or 
implicitly, authorized anyone else to agree to the sale on his 
behalf.  Id. at 966, 81 S.E.2d at 585.  Nevertheless, the lumber 
company insisted that it was entitled to specific performance 
with regard to the mother’s one-half interest since she had 
agreed to the proposed sale.  This Court disagreed and observed 
that there was “not a word in the mass of correspondence between 
the parties which would indicate that either the [lumber 
company] or [the mother] ever had in contemplation dealing as to 
a one-half interest.”  Id. at 969-70, 81 S.E.2d at 586.  We 
reach the same conclusion in the present case. 
 
As we have already stated, Pearson and Gould were, as a 
unit rather than separately, identified as the “Seller.”  The 
contract included two lines at the end for the signatures of the 
“Seller.”  However, the “Seller” did not execute the contract 
because Gould failed to sign it.  Thus, the contract was never 
consummated.  See C. & O. Ry. Co. v. Douthat, 176 Va. 244, 252-
53, 10 S.E.2d 881, 884-85 (1940) (contract naming husband and 
wife as “parties of the first part” never consummated because 
wife did not sign it). 
 
That fact was evident to G & M Homes.  The continued 
communications and negotiations between the parties after 
 
11
Pearson signed the contract of sale demonstrate that G & M Homes 
understood that it was contracting with both parties and that it 
did not yet have a complete and binding contract. 
CONCLUSION 
 
For these reasons, we conclude that the circuit court did 
not err in granting summary judgment for Pearson and Gould with 
regard to G & M Homes’ claim for specific performance.  We 
further conclude that the court did not err in finding, as a 
matter of law, that the contract of sale is not valid and 
binding between Pearson and G & M Homes.  Accordingly, we will 
affirm the judgment of the circuit court.7
Affirmed. 
                     
7 In light of our decision, we do not need to address the 
remaining assignments of error and, for that reason, have not 
included in this opinion discussion of certain facts and 
proceedings relevant only to those assignments of error. 
 
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