Title: Johnson v. Jagermoore-Estes Properties

State: alabama

Issuer: Alabama Supreme Court

Document:

456 So. 2d 1072 (1984)
John B. JOHNSON, James A. King, Jr., James T. Parsons, J. Hardie Meade, Jr.
v.
JAGERMOORE-ESTES PROPERTIES, a partnership, et al.
83-145.

Supreme Court of Alabama.
September 21, 1984.
Donald H. Brockway, Jr. of Corretti & Newsom, Birmingham, for appellants.
J. Fred Wood, Jr., Carleton P. Ketcham, Jr., and J. Terry McElheny of Dominick, Fletcher, Yeilding, Wood & Lloyd, Birmingham, for appellees.
MADDOX, Justice.
This is a suit seeking rescission of an option contract for the purchase of certain improved realty, including 342 apartment units.
*1073 On February 27, 1980, James T. Parsons, John B. Johnson, James A. King, Jr., and Hardie Meade, Jr. (purchasers) entered into an agreement with Jagermoore-Estes Properties and others (sellers) which provided in pertinent part as follows:
On or about November 1, 1980, purchasers sent sellers the following letter.
On November 25, 1980, purchasers brought suit in Jefferson County Circuit Court, seeking rescission of the contract and damages based on fraud and breach of contract. In particular, purchasers alleged that the agreement obligated sellers to use their "best efforts" to keep all units rented and repaired during the option term and that sellers had failed to do so, and had allowed the property to fall into further disrepair. Purchasers, subsequently, withdrew their claim for damages.
On September 12, 1983, the case was tried ore tenus in the circuit court, without a jury, and on October 13, 1983, judgment was rendered in favor of the sellers. That judgment provided in pertinent part:
Purchasers appeal here, asserting that the trial court erred in failing to grant rescission and order a return of their $100,000 deposit. We find no reversible error, and affirm.
Although we agree with the general propositions of law advanced by the purchasers, that a material falsehood constituting fraud may justify rescission, Stone v. Walker, 201 Ala. 130, 77 So. 554 (1917), and that a material breach of contract may do likewise, Alabama Football, Inc. v. Stabler, 294 Ala. 551, 319 So. 2d 678 (1975), purchasers' brief does little else than reargue the facts as presented to the trial court. That court specifically found that there was neither a material breach nor the perpetration of a fraud.
It is well-settled that the question of whether fraud or a breach of contract has occurred is to be determined by the trier of fact, John Deere Industrial Equipment Co. v. Keller, 431 So. 2d 1155 (Ala. 1983), and that where, as here, the trial court sits as the trier of fact, its findings are entitled to a presumption of correctness and will be disturbed on appeal only if palpably wrong, unsupported by the evidence, or manifestly unjust. General Electric Credit Corp. v. Strickland Division of Rebel Lumber Co., 437 So. 2d 1240 (Ala. 1983).
The record before us is lengthy, and, while we believe a detailed recitation of the evidence will neither serve the cause of justice nor aid in disposition of this case, we believe that there was sufficient evidence presented to support the findings and conclusions of the trial court. Briefly, the evidence shows that the purchasers are, indeed, businessmen who have experience in real estate speculation; two are realtors, one is a mortgage banker, and the other is a contractor. The evidence indicates that they agreed to purchase only after long negotiations; that they had an opportunity to inspect the apartments several times prior to executing the contract, and that they knew the apartments to be low rent units, in various states of disrepair, and subject to both vandalism and vacancy. They also understood that as much as $200,000 in capital would be needed to make repairs, and there is evidence, although disputed, indicating that they knew that their $100,000 deposit would not be used for this purpose. There is also evidence that the sellers spent a considerable sum on repairs and maintenance during the term of the option, and that they intended to make complete repairs after closing, using the $3,400,000 purchase price as capital. It is undisputed that by the terms of the agreement, they had sixty days after closing in which to accomplish this task.
While purchasers contend that a material part of the contract was that additional units were required to be improved so as to meet federal "section eight housing standards," we note that nowhere in the agreement is that intent expressed.[1]
Considering the foregoing evidence, along with the wording of the contract, we find that the decision of the trial court was supported by the evidence and was neither palpably wrong nor manifestly unjust.
AFFIRMED.
TORBERT, C.J., and JONES, SHORES and ADAMS, JJ., concur.
[1]  While it is true that the purchasers' letter to the sellers also mentioned the section eight requirements, we believe that the terms of the agreement control and that the trial court could have found, as it apparently did, that the reference in the letter was no more than a self-serving statement, which it could, within its discretion, disregard.