IN THE SUPREME COURT OF MISSISSIPPI

NO. 2003-CA-02353-SCT

ANDREW EARL CREELY, SR.

v.

C. DELBERT HOSEMANN, JR.

DATE OF JUDGMENT: 09/09/2003

TRIAL JUDGE: HON. JON M. BARNWELL

COURT FROM WHICH APPEALED: LEFLORE COUNTY CHANCERY COURT

ATTORNEY FOR APPELLANT: ROGER M. TUBBS

ATTORNEYS FOR APPELLEE: DAVID W. MOCKBEE

JASON EDWIN WEEKS

NATURE OF THE CASE: CIVIL - CONTRACT

DISPOSITION: AFFIRMED - 02/10/2005

MOTION FOR REHEARING FILED:

MANDATE ISSUED:

BEFORE WALLER, P.J., GRAVES AND DICKINSON, JJ. 

DICKINSON, JUSTICE, FOR THE COURT:

¶1. This is an option contract case in which we must determine whether the optionee, C.

Delbert Hosemann, Jr., properly exercised his option to purchase from the optionor, Andrew

Earl Creely, Sr., an undivided half interest in approximately 150 acres of what apparently must

be prime duck hunting land.

BACKGROUND FACTS AND PROCEEDINGS

¶2. On September 11, 1999, Johnny Rayburn entered into a Contract and Agreement to

purchase 1,142 acres of land from Dan O’Neal and E.C. Stewart, Jr. Rayburn later assigned his

interest to Creely. Six days after the assignment to Creely, Danmar, Inc. and Stuart Company
1The contract was signed by Dan O’Neal, on behalf of Danmar, Inc. and E.C. Stuart, on behalf

of Stuart Company. 

2The sole shareholder of Buck Ridge Hunting Club of Mississippi, Inc., was Hosemann, who is

also a tax attorney.

3Various documents have spelling variations of Dan O’Neal (O’Neal, O’Neill, O’Neil),

however, we will use O’Neal throughout this opinion.

2

entered into a contract to sell1 Buck Ridge Hunting Club of Mississippi, Inc.,2the same

property. When Creely learned of the Buck Ridge contract, he and Rayburn filed a Complaint

for Temporary Restraining Order, Permanent Injunction and Specific Performance of Contract

against Dan O’Neal3; E.C. “Sonny” Stuart, Jr.; Danmar, Inc.; and Stuart Land and Timber, LLC,

to prevent the sale.

¶3. On October 5, 1999, prior to the TRO hearing, Creely and Hosemann reached a

compromise. In exchange for releasing his claim under the Buck Ridge contract, Hosemann

received an option from Creely to purchase a one-half undivided interest in the portion of the

1,142 acres known as “The Scatters.” The option agreement stated:

In consideration of Hosemann’s release of any contract rights to Buck Ridge

Hunting Club and termination of his Contract to Purchase same, Earl Creely, an

individual resident of Tupelo, Mississippi and Delbert Hosemann, an individual

resident of Jackson, Mississippi agree as follows:

1. Creely grants Hosemann an Option to Purchase an undivided one-half

interest in that certain 154 acres located in the “Scatters” portion of Buck

Ridge, a legal description of Buck Ridge is attached hereto for the sum of Fifty

Three Thousand Nine Hundred Dollars ($53,900.00) to be paid in cash at

closing.
4Creely closed on October 14, 1999.

3

2. Said Option is to be exercised by November 25, 1999 or later if

Creely closes purchse (sic) of the property after November 25, 1999.4

3. Creely will convey this property interest by Warranty Deed.

4. The Warranty Deed is to reflect a right of first refusal in favor of both

Creely and Hosemann in the event of the sale of the property to anyone outside

of the parties’ immediate families.

5. For so long as Creely or his immediate family owns the Buck Ridge

property, Creely agrees to allow Hosemann and his children, Charles Delbert

Hosemann, III, Mark M. Hosemann and Kristen C. Hosemann (and their invited

guests in their presence) to duck hunt only on that certain eastern part of the

Buck Ridge property beginning with and including Twin Lake and east to the

property line.

6. Taxes, federal program payments and all other income or expenses

will be divided as the parties’ interest may appear.

WITNESS the signatures of Creely and Hosemann on this the 5th day

 of October, 1999.

¶4. As a result of the compromise, the suit was dismissed, and Danmar, Inc., and Stuart Land

and Timber, L.L.C., executed a release of real estate purchase and sale agreement in favor of

Buck Ridge Hunting Club and Hosemann. Hosemann and Creely agreed to have attorney Donny

Brock close the Creely-Hosemann Option. Brock was the attorney who had closed Creely’s

purchase of the 1142 acres.

¶5. On November 23, 1999, Hosemann wrote Creely a letter which stated:

I’m sorry I missed you by telephone today. As you know, we were hoping

to have closed by November the 25th. However, we have been unable to obtain

a legal description. I have requested Butch Montgomery, who did the original

survey, to provide us with a legal description for the conveyance. He asked me

where the line should be drawn on the land. I asked him to draw the line at the

approximate normal water level and not at the top of the bank. This was our

understanding when we first discussed this matter in Greenwood. This would,
4

in essence, provide me with a half interest in the water property only and not in

any of your other land. Neither Butch nor I are confident of exactly what the

final acreage will be. If it is more or less than the 154 acres we anticipated, we

will adjust by the $700.00 per acre agreed price.

Butch telephone (sic) me today and hopefully will complete the survey

tomorrow, Wednesday, November 24th. As soon as the legal description is

prepared I will prepare a Warranty Deed for your review and we can complete

the closing.

I am looking forward to seeing you this weekend.

¶6. On that same day, Hosemann sent a second letter to Creely which included the

following:

Enclosed please find a map as prepared by Robert A. Montgomery, Jr. of

our land in Money, Mississippi. It reflects 140.68 acres. . . . I also have a copy

of an aerial photograph I ordered for you of your property. . . . I am also

enclosing a copy of his bill for $740.00. I have already sent Robert a check for

$370.00 as my portion of the bill.. . . . 

How would you prefer the deed to be prepared? Would you prefer for

your lawyer to do it or for me to make a first draft?

¶7. After these letters were sent, Hosemann, Creely and Brock exchanged numerous

documents including correspondence, draft deeds, and a limited liability agreement draft,

which were pertinent to the sale of property by Creely to Hosemann. Additionally, the

following activities took place:

(1) Hosemann and Creely shared the cost of building an access road to the

Scatters.

(2) They hunted the Scatters together during the 1999-2000 duck season.

(3) They shared the cost of a Mississippi Department of Environmental

Quality survey.
5

¶8. On September 5, 2000, Hosemann tendered the purchase price to Brock, who placed

it into a trust account. However, on December 6, 2000, Creely wrote Hosemann a letter

stating: “As of this time I do not wish to sell the property located in McIntyre Scatters. If this

should change, I will be in touch.”

¶9. On September 21, 2001, Hosemann filed this suit in the Leflore County Chancery Court

against Creely seeking specific performance of the option contract. Creely filed a

counterclaim alleging misrepresentation and fraud. At the conclusion of the trial, the

Chancellor issued his Findings of Fact and Conclusions of Law and soon thereafter entered a

final judgment in favor of Hosemann on both the complaint and the counterclaim. The

Chancellor ordered specific performance of the option contract. It is from this judgment that

Creely now appeals.

ANALYSIS

¶10. On appeal Creely raises the following issues for our review:

I. The Hosemann claim must fail for lack of consideration based on

misrepresentation. 

II. The Hosemann claim must fail because a modification of a written

contract must be supported by new consideration.

III. The Hosemann claim must fail because Hosemann failed to exercise the

Option.

IV. Hosemann’s seven counter-offers extinguished the Option.

V. Hosemann’s claim must fail because changes, if any, to the Option

contract were not in writing and violated the Statute of Frauds.

¶11. We employ a limited standard of review when reviewing the decision of a chancellor.

McNeil v. Hester, 753 So. 2d 1057, 1063 (Miss. 2000). “The findings of a chancellor will not
6

be disturbed on review unless the chancellor was manifestly wrong, clearly erroneous, or

applied the wrong legal standard. Id. “The standard of review employed by this Court for

review of a chancellor’s decision is abuse of discretion” Id. “However, for questions of law,

the standard of review is de novo.” Id.

I. Consideration.

¶12. It is surprising that Creely says Hosemann provided no consideration for the option

agreement. He bases this argument on his belief that he would have prevailed in the litigation

involving the two contracts for the purchase of the 1,142 acres. Since Hosemann’s contract

was unenforceable, he argues, Hosemann gave up nothing by settling the litigation. This theory,

if valid, would lead to the inescapable conclusion that virtually every settlement could be set

aside for lack of consideration. Lawsuits usually involve one party who is right and one who

is wrong. It is not the potential recovery in the lawsuit that provides consideration in a

settlement, but rather the right to pursue the recovery. In this case, Hosemann relinquished his

right to pursue his claim that his contract for the purchase of the 1,142 acres was valid. This

abandonment of the right to pursue a claim provides the necessary consideration.

¶13. Additionally, the option contract’s recital of consideration creates a rebuttable

presumption that consideration was provided. The Chancellor put it this way:

[Creely] puts forth the argument that there was no consideration given for the

option agreement. “Where the instrument in controversy contains a statement

or recital of consideration, it creates a rebuttable presumption that

consideration actually exited.” Daniel v. Snowdoun Ass’n., 513 So. 2d 946,

950 (Miss. 1987). [Creely] failed to adequately rebut the presumption created

by the recitation contained within the Option agreement. Clearly there was

consideration in the dismissal of the lawsuit.
7

¶14. Creely contends that Hosemann did not have any “rights” to purchase the land because

Creely entered into a contract six days prior to Hosemann’s entering into the Buck Ridge Real

Estate Purchase and Agreement. Therefore, he says his contract took precedence because

Mississippi is a race-notice state; first in time is first in right. This is nothing more than postsettlement argument of the merits of the litigation, which is ineffective to disturb the

settlement.

¶15. Creely also claims he is entitled to set aside Hosemann’s claim of consideration

because it was based upon a misrepresentation. Creely says Hosemann falsely represented that

the rights to the land under the Buck Ridge Contract were his personally as opposed to those

of the Buck Ridge Hunting Club. At trial, Creely testified that Hosemann claimed “he” had a

contract to purchase the same land.

¶16. To support his position, Creely cites Godfrey, Bassett & Kuykendall Architects, Ltd.

v. Huntington Lumber & Supply Co., 584 So. 2d 1254 (Miss. 1991), which says:

The representation was material, it induced the appellees to execute the

supplemental agreement, and it was false. The result here is the same regardless

of whether the misrepresentation was wilfully and knowingly made or whether

it was innocently made.

Id. at 1258, citing McGee v. Clark, 343 So. 2d 486, 488-89 (Miss. 1977).

¶17. Creely also cites Sellars v. Grant, 196 F.2d 677, 679 (5th Cir. 1952), which states that

“it would be unjust to allow one who has made material false representations, however

innocently, to retain the fruits of a bargain induced thereby.”

¶18. We find Creely’s position quite curious, given the proof at trial, including Creely’s own

testimony. The record reflects that during an October 5, 1999, meeting (which was three
5O’Neal is the President of Danmar, Inc.

8

weeks after Hosemann’s contract was signed) Creely learned that his own contract had not

been properly executed. “Dan O’Neal and E. C. Stuart, Jr.,” were listed as sellers on Creely’s

September 11 contract, but only O’Neal signed as seller. Additionally, Creely learned that

neither O’Neal nor Stewart was a record owner of the property. To make matters worse for

Creely, an addendum to the contract was signed only by O’Neal.5

¶19. Having learned of the defects in his own contract, Creely re-negotiated and entered into

a new contract dated October 5, 1999, between Danmar, Inc. and Stuart Land and Timber,

L.L.C., as sellers, and Earl Creely as buyer. The new contract had additional terms and a

purchase price of $50,000 more than the contract dated September 11, 1999. Furthermore,

the new contract does not reference the September 11, 1999, contract.

¶20. Creely testified he never informed Hosemann of the defects in his September 11, 1999,

contract. At trial, Creely provided the following testimony in response to questions from

Hosemann’s attorney:

Q. And likewise, you didn’t tell Delbert, now Delbert, now we’re fixing to settle

up, and I’m going to get the property, and you’re just going to get an option.

And, you know, my contract is really not signed by the owner? You didn’t tell

him that; did you?

A. No, Sir.

Q. And you didn’t tell him that your contract had terms that you had added that

had not been agreed to in writing by the owner; did you?

A. No, sir.

Q. So because both of you came, and you said, okay, we recognize we’ve got

claims - - good, bad or somewhere in between - - can we work it out?

And that’s what y’all did.
9

A. That’s correct.

¶21. So, in summary, Creely claims Hosemann was guilty of misrepresentation and fraud.

In truth, however, Creely’s operative contract was clearly signed after Hosemann’s contract,

and it was Creely who did not inform Hosemann of this and other defects. Under Creely’s

theory of consideration, it is Creely, not Hosemann, who failed to provide consideration for

the option contract.

¶22. Creely argues that Hosemann should not be allowed to personally seek enforcement of

the option contract because the buyer in the real estate contract was Buck Ridge Hunting Club,

not Hosemann. However, Hosemann points out that this Court has held:

[A]n executive officer of a close corporation . . . in carrying on the usual

business of the corporation has the same apparent authority as a partner in a

partnership as against third parties who in good faith rely upon his

representations.

Baxter Porter & Sons Well Servicing Co. v. Venture Oil Corp., 488 So. 2d 793, 796 (Miss.

1986). Hosemann was the sole shareholder of Buck Ridge Hunting Club. Hosemann contends

that the evidence was undisputed that Hosemann had the authority to sign the Option Contract

to bind Buck Ridge Hunting Club and to release the corporation’s contract claim to purchase

the property. Hosemann points out that after the October 5, 1999 agreement, there was never

any claim by Hosemann or Buck Ridge Hunting Club of any contract rights in purchasing the

1142 acres of land.

¶23. While Hosemann’s argument is sound, it is irrelevant. Creely does not question

whether Hosemann had authority to bind Buck Ridge Hunting Club. Rather, he alleges that

Hosemann misrepresented to him that Hosemann personally had a contract to purchase the
10

same property. Creely asserts that if he had known that Hosemann did not personally have the

contract, he would not have entered into the option agreement. 

¶24. Hosemann testified that there was a discussion at the meeting regarding him taking the

option in his own name:

Q Now, was there any discussion in these conversations about you, Delbert

Hosemann, signing the option, as opposed to the corporation signing the option?

A Yeah. I explained. When we got there, I said, well, I'm going to take this in

my own name, then, because I wanted my three children to be able to hunt. One

of my sons is an active hunter, so we discussed the fact that I would take it as

"Delbert Hosemann." 

Q Did you have any discussions about the contract, your contract, being in the

name of the corporation, as opposed to Delbert Hosemann, personally?

A Only from the standpoint that I would give the releases -- all the releases --

personally and corporately or anything else they wanted, but that I was going to

assign this to me; and I was going to close it in my name because I wanted my

children to have a part of it.

And, also, I had started that corporation to own the entire property, the

whole 1100 acres, which was at one point a $1 million purchase. So I would

have to have other stockholders. But I could afford to purchase half the property

just myself. So I had intended to use the corporation, really, as a financing

vehicle to have other stockholders. But since it was going to be he and I, I told

him I wouldn't use Buck Ridge. I was just going to use my own personal funds,

and I'd buy it just myself.

Q How did you expect to effect that change, if you will, from the corporation

having the contract to you buying the property personally?

A Well, I assigned it to myself. It was a pretty close meeting. It was just me

there. And so I said, well, I'm going to assign this to myself, and then I'll go

forward. So I was -- I was the president and the stockholder of the corporation

and assigned it to my own self, so there wasn't any real big meeting involved.

We just agreed to it.
6This resolution was signed by Hosemann as the President and Director of Buck Ridge Hunting

Club but was not dated.

11

¶25. Hosemann did sign the option contract individually and not in the name of his

corporation. Subsequently, Hosemann executed a Resolution of Buck Ridge Hunting Club of

Mississippi, Inc.6 which provided:

This Resolution will confirm and memorialize that on October 5, 1999 prior to

Delbert Hosemann’s execution of the Option Agreement with Andrew Earl

Creely Sr., Buck Ridge Hunting Club Inc. of Mississippi acting by and through

its only Director, Officer and Shareholder did assign all of its rights under the

Real Estate Purchase and Sale Agreement by and between Danmar, Inc./Stuart

Company and Buck Ridge Hunting Club, Inc. of Mississippi dated September 17,

1999 to Delbert Hosemann in consideration for Delbert Hosemann Jr.’s

agreement to take over all of Buck Ridge Hunting Club Inc.’s obligations and

liabilities under the Real Estate Purchase and Sale Agreement.

¶26. There is no question that Hosemann had the authority to sign the option agreement and

bind Buck Ridge Hunting Club to the consideration that was given for the option.

Subsequently, a Resolution was executed which memorialized the October 5, 1999 transaction

and assigned all of the rights of the contract to Hosemann individually.

¶27. Based upon these facts which are reflected in the record, we cannot say the Chancellor

abused his discretion, and we find this issue void of any merit.

II. Exercise of the Option.

¶28. The precise issue Creely raises is whether the language of the option agreement, “Said

Option is to be exercised by November 25, 1999," sets Hosemann’s deadline for notifying

Creely of intent to exercise the option or for closing the purchase by payment of the purchase

price and transfer of title.
12

¶29. In Busching v. Griffin, 542 So. 2d 861, 864 (Miss. 1989), this Court held that written

notice to the seller of intent of the option holder to exercise an option has the effect of an

acceptance, converting the option into an enforceable bilateral contract. It is not necessary for

an option holder to tender the purchase price in order to exercise the option. Id. at 864-65.

The holder of an option is entitled to specific performance of the optioner’s duty to convey,

so long as the holder is willing to pay the option price. Id. at 864.

¶30. The Chancellor held:

[Creely] also raises, as a defense, the argument that [Hosemann] did not exercise

the Option within the time allowed by the Option’s terms. This Court finds that

[Hosemann] did, in fact, exercise the Option prior to the November 25, 1999,

deadline. In addition, any delay in the exercising of the Option was due to

[Creely’s] actions, and finally [Creely’s] inaction and delay of never making a

final decision on the details of closing the transaction. 

* * * 

The Court finds that the Option agreement was duly exercised by the November

25, 1999, deadline, and that all that followed was an attempt by both parties to

work out the details of closing the transaction, some of which included

modifications agreed to by the parties and other modifications not agreed to.

¶31. We find the Chancellor was exactly correct. The Option Contract contained all the

essential terms:

a. Description of the property;

b. Consideration for purchase of the property; and

c. The date by which the option was to be exercised.

Holifield v. Veterans’ Farm & Home Bd., 218 Miss. 446, 67 So. 2d 456 (1953); McCorkle

v. Loumiss Timber Co., 760 So. 2d 845 (Miss. Ct. App. 2000).

¶32. In Duke v. Whatley, 580 So. 2d 1267 (Miss. 1991), this Court, when making a

distinction between an option and right of first refusal contract, held:
13

The option compels performance within the time limit specified, or if none is

mentioned, then within a reasonable time, whereas the right of first refusal has

no binding effect unless the offeror decides to sell. 

* * *

In the case of an option, as noted above, the option-giver has no choice but to

sell when the option is accepted according to its terms. What is usually provided

is that there will be an expression of acceptance communicated to the

option-giver, or that payment according to the terms of the option will be made

within the time limit. Thus, an option is an offer made irrevocable by contract;

however, it may be made conditional upon the happening of some specified

event. 

The option gives a clear right to the option-holder, regardless of the wishes of

the option-giver.

Williston on Contracts, § 1441A (Jaeger, 3d ed. 1968).

Id. at 1272. Here, the option contract provided a specific time in which Hosemann was

required to exercise the option. However, the contract failed to express a closing date.

Therefore, the date of closing was to be within a reasonable time from the date of exercising

the option. This Court has held that what is a reasonable time “in which to exercise the option

depends upon the facts and circumstances of the particular case.” Miss. Power Co. v. Bennett,

173 Miss. 109, 161 So. 301, 308 (1935). See also Mitts v. Price, 129 Miss. 554, 92 So.

163, 165 (1922).

¶33. As discussed supra, Creely and Hosemann engaged in numerous activities from the

exercise of the option by Hosemann until he tendered payment. Thus, we find no merit to this

issue.

¶34. We now move to issues III and IV, which we shall discuss together.

III. New Consideration. 

IV. Seven counter-offers.
14

¶35. These assignments of errors require a finding that Hosemann made counter-offers and

modifications to the option contract. The Chancellor did not so find, and neither do we.

¶36. The Chancellor held:

[Creely] alleges that [Hosemann] made a counter offer to [Creely] which

extinguished the original offer. Although it is true that beginning December 28,

1999, [Hosemann] did first assert several issues not included within the Option

agreement, the Court does not find that these negotiations constitute a counter

offer rendering the Option agreement extinguished.

¶37. The record amply supports the Chancellor’s findings. Both parties made numerous

attempts to prepare an acceptable deed and to negotiate missing or unclear terms, but these

efforts do not rise to the level of “modifications” or “counter-offers.”

¶38. When the option to purchase the land was exercised by Hosemann, the option became

a valid and binding contract and the option agreement no longer existed. In Holifield, 67 So.

2d at 457-58, this Court held:

The effect of the acceptance of an outstanding offer in a case of this kind is

stated in 66 C.J., p. 528, Vender and Purchaser, par. (66) c, as follows:

“Acceptance of an outstanding offer completes the contract, and it is thereupon

binding upon both parties, so that neither the offer nor the acceptance can

thereafter be revoked. An agreement or offer giving an opportunity to purchase

land within a certain time, although without consideration, becomes a binding

contract when accepted within that time if it has not been previously been

withdrawn.” 

67 So. 2d at 458.

¶39. This Court also cited 49 Am.Jur. P. 139, par. 118 which stated: “The lack of inadequacy

of consideration for an option should not defeat the right to performance of a contract to

convey after the option had been accepted, if the price to be paid for the land is adequate.” 67

So. 2d at 458.
15

¶40. Furthermore, Ackerman v. Carpenter, 29 A.2d 922, 925 (Vt. 1943), although not

binding upon us, is persuasive authority for the proposition that once a bilateral contract is

created, “the plaintiff could make proposals either to vary or make more specific the terms of

the executory contract without jeopardizing her rights thereunder. Such proposals made by one

party and not accepted by the other would leave the contract exactly as though the proposals

had not been made.”

¶41. Creely contends that Hosemann’s first “counter-offer” occurred in a letter dated

December 28, 1999, from Hosemann to Brock, which stated: “Also, you raised several

questions which we need to address including access down the road, etc.” This letter was

written by Hosemann to Brock concerning a conversation that Hosemann had with Brock. It

did not constitute a “counter-offer.”

¶42. Creely also points out that Hosemann had Brock prepare a deed which contained an

easement that was not a part of the original option. The proposed deed did contain an easement

that was described within the option agreement. However, the easement was for the Wiggins

Road, which Hosemann and Creely had agreed to construct. Furthermore, Creely granted

Hosemann permission to use the road when the water was low. Creely testified he granted

permission when they were on good terms. Hosemann concedes that he proposed deed

language not contained in the Option Agreement. Hosemann had no duty to prepare the deed.

Creely, as seller, was required to transfer the property. If he was dissatisfied with Hosemann’s

deed, he was free to prepare his own. Including the easement for use of the road, which had

been discussed by the parties, did not constitute a modification or counter-offer requiring

separate consideration.
16

¶43. Creely testified that another easement in the deed, the Thomas easement, provided

Hosemann access to the Twin Lakes. However, on cross-examination, Creely revealed that the

opposite was in fact true: Hosemann did not have an easement with respect to the license but

would be granted an easement from adjoining land owners. Creely further admitted this

language was consistent with the option agreement.

¶44. We find no merit to these assignments of error.

V. Statute of Frauds.

¶45. Having already determined that there were no material changes to the option contract,

we must find this assignment of error is without merit on its face. The Chancellor held:

The Court further finds that [Hosemann] is entitled to specific performance on

the Option agreement, as written. All modifications discussed by the parties

were unwritten and thus to enforce them would violate the Statute of Frauds.

However, the Court finds that all statutory requirements were met for the

enforcement of the original Option agreement as written.

We agree.

CONCLUSION

¶46. Finding no merit to the assignments of error suggested by Creely, we affirm the

judgment of the Chancellor.

¶47. AFFIRMED.

SMITH, C.J., WALLER AND COBB, P.JJ., CARLSON AND RANDOLPH, JJ.,

CONCUR. GRAVES, J., CONCURS IN RESULT ONLY. EASLEY, J., DISSENTS

WITHOUT SEPARATE WRITTEN OPINION. DIAZ, J., NOT PARTICIPATING.