Opinion ID: 1864487
Heading Depth: 1
Heading Rank: 3

Heading: competing claims for specific performance

Text: When land or any interest therein is the subject matter of a contract, the power of a court of equity to grant specific performance is beyond question. [Citation omitted.] We have held that specific performance should generally be granted as a matter of course or right regarding a contract for the sale of real estate where a valid, binding contract exists which is definite and certain in its terms, mutual in its obligation, free from overreaching fraud and unfairness, and where the remedy at law is inadequate. [Citation omitted.] Real estate is assumed to possess the characteristic of uniqueness, and, therefore, special value, necessary for availability of specific performance. Mohrlang v. Draper, 219 Neb. 630, 633, 365 N.W.2d 443, 446 (1985). Wetovick's contract to purchase the Taylor farm was valid and remained in effect after Wetovick's oral waiver of contingencies on February 16. When Wetovick waived the contingencies in his contract on February 16, the contract for the sale of the Taylor farm had not been breached. At that point, the parties could validly modify their initial agreement, waiving contingencies and altering the initial closing date. A written executory contract may be modified by the parties thereto at any time after its execution and before a breach has occurred, without any new consideration; and the terms of a written executory contract may be changed by a subsequent parol agreement before a breach thereof. Pearce v. ELIC Corp., 213 Neb. 193, 201, 329 N.W.2d 74, 79 (1982); Cole v. Hickey, 215 Neb. 728, 340 N.W.2d 418 (1983). Even in the absence of a change in the closing date, the Taylor-Wetovick contract remained effective on February 18, 1 day after the closing date specified in the contract. In the ordinary contract for the sale of real estate, time is not of the essence unless provided in the agreement itself or clearly manifested by the agreement construed in the light of surrounding circumstances. Where time is not of the essence, performance must be within a reasonable time. Dowd Grain Co., Inc. v. Pflug, 193 Neb. 483, 227 N.W.2d 610 (1975). When a contract expressly provides for a specific closing date, performance is normally due within a reasonable time after the date mentioned. In Tedco Development Corp. v. Overland Hills, Inc., 200 Neb. 748, 266 N.W.2d 56 (1978), this court faced a factual situation similar to the present case, that is, competing claims for specific performance. Regarding the time for performance of the first purchaser's contract, we expressed: The contract provided for a closing date of February 25, 1977. In 71 Am.Jur.2d, Specific Performance, § 63, p. 91, it is stated:     in the ordinary cases of sales of realty, the general object being to make a sale for an agreed sum, the time of payment is regarded in equity as formal, and as meaning only that the purchase shall be completed within a reasonable time, and substantially according to the contract, regard being had to all the circumstances.  (Emphasis in original.) 200 Neb. at 755, 266 N.W.2d at 60. See, also, A. Corbin, Corbin on Contracts § 716 at 677 (one vol. ed. 1952) ([T]he fact that a specific time is fixed for payment or for conveyance does not make `time of the essence'....). The Taylor-Wetovick agreement did not contain a clause expressly stating or language otherwise indicating that time was of the essence in the sale. Frenzen relies primarily on the change in the closing date, initiated by Taylors, in arguing that the circumstances show that Taylors intended that time was of the essence. We disagree. Since closing on a specific date was not crucial for the parties in the Taylor-Wetovick contract, Taylors changed the closing date as a matter of convenience. As Eugene Taylor testified, from the outset of the Taylor-Wetovick transaction, he wanted to close the deal whenever [it] was possible. Frenzen devotes much of his brief to an argument concerning time as a factor in the Frenzen-Taylor agreement. Frenzen's argument misconstrues the issues presented by this appeal. Wetovick's right to specific performance is not restricted by a subsequent contract to which he is not a party. Wetovick's right to specific performance extended beyond February 17, 1987, as the result of his subsisting contract with Taylors notwithstanding the passage of February 17 without a closing of the sale. Wetovick is entitled to specific performance of his contract with Taylors. Frenzen also claims an independent right to specific performance of his contract. Frenzen's right to purchase the Taylor farm, however, was subject to the condition precedent that Wetovick's deal not close on or before February 17, 1987 as set forth in said agreement.  (Emphasis supplied.) When a contractual duty is subject to the occurrence of a specific contingency or event as a condition, the condition must occur before a party is obligated to perform the contractual duty unless nonoccurrence is excused. See Chadd v. Midwest Franchise Corp., 226 Neb. 502, 412 N.W.2d 453 (1987). Since time was not of the essence in the Taylor-Wetovick contract, the terms of the contract allowed a closing after February 17. Thus, the language in the Frenzen-Taylor contract actually reflects a misperception of the provisions in the Taylor-Wetovick contract. The language in the first part of the contingency expressed in Frenzen's contract, on or before February 17, 1987, is inconsistent with the language in the second part of the contractual contingency, as set forth in said agreement. When read as a whole, the language of the contingency expressed in the Frenzen-Taylor contract is susceptible to more than one reasonable interpretation and, therefore, ambiguous. See American Sec. Servs. v. Vodra, 222 Neb. 480, 385 N.W.2d 73 (1986). In attempting to ascertain the meaning of ambiguous terms of a contract, a court must determine the actual intent of the contracting parties, considering facts and circumstances which motivated each party to enter the contract, and the nature and subject matter of the contract. Lauritzen v. Davis, 214 Neb. 547, 335 N.W.2d 520 (1983); Lone Oak Farm Corp. v. Riverside Fertilizer, 229 Neb. 548, 428 N.W.2d 175 (1988). When he signed the contract, Frenzen was informed that Wetovick was free to waive the contractual contingencies for purchase of the Taylor farm. Consequently, Frenzen knew that the Taylor-Wetovick sale might be consummated despite the impossibility of CRP enrollment. We find that all parties understood that Frenzen's contract was a backup contract and would operate only if the Wetovick sale fell through, an event which never occurred. Furthermore, Frenzen's contract is subject to the Taylor-Wetovick sale's not closing as set forth in [the Taylor-Wetovick] agreement. As we have already noted, Wetovick's contract allowed closing beyond February 17, the closing date designated in the Taylor-Wetovick contract. Taylors and Wetovick, however, were prepared to close their transaction soon after February 17, but refrained from closing in view of Frenzen's claim. Thus, we conclude that Frenzen and Taylors did not intend that their contract would become operative unless the Taylor-Wetovick sale was not closed on February 17, or within a reasonable time after February 17. But for Frenzen's letter precluding the closing of the Taylor-Wetovick sale, Wetovick undoubtedly would have completed purchase of the Taylor farm. Consequently, the condition precedent to enforcement of Frenzen's right to purchase the farm never occurred. Therefore, Frenzen is not entitled to specific performance of his agreement with Taylors. However, Wetovick is entitled to specific performance of his contract with Taylors. For that reason, the decision of the district court is affirmed. AFFIRMED.