Court Opinion

ID: 9540056
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:12:29.325517+00
Date Added: 2024-06-11T14:59:34.324014
License: Public Domain

HOWE, Justice
(dissenting).
I dissent. I do not agree with the statements in the majority opinion that the earnest money agreements failed for want of consideration, and that the amendment agreement failed for the same reason. I also disagree with the statement that both parties have treated the amendment agreement as if it did not exist. To the contrary, the seller relies upon it very heavily since it contains the “waiver” provision which it thinks aids its position, and the buyer relies upon the amendment agreement as the basis of the seller’s promise to transfer water shares to the town of Cedar Hills. But even if both parties treated it as if it did not exist, it is nevertheless binding on them and this Court cannot disregard it.
I do not agree with the majority opinion that “conditions” 3 and 4 of the earnest money agreements are non-promissory and that the buyer assumed the risk of their non-fulfillment. Neither party contends that. They do not dispute that the seller was made responsible for them. Indeed, the seller’s agent on January 17, 1978, wrote the buyer acknowledging its obligation to furnish water and use of the lagoon system as follows:
Dear Sirs:
I have been instructed to notify you that the conditions and performances required of the sellers, Cedar Hills Development Co., as contained in the subject Earnest Money Receipts and Offers to Purchase have been met by the sellers and the sellers hereby notify you that [$215,-000 is due and payable within 30 days of January 5, 1978].. .
Conditions of the subject agreements are as follows:
1. Annexation
The subject properties were annexed to Cedar Hills on December 31, 1977.
2. Preliminary Plat Approval
Preliminary Plat Approval was granted by the Cedar Hills Town Council on January 5, 1978.
3. Sufficient Culinary Water Supply
Cedar Hills has 300 connections available to it from Manilla Culinary Water Co. Of these, approximately 220 do not have issued building permits or homes using them. In addition, we understand that Manilla Culinary Water Co. has water rights in excess of approximately 800 connections that are not committed at the present time. Therefore, there is a sufficient culinary water supply to satisfy the needs of the subject properties for residential use.
4. Use of Lagoon System for SO and 12 Homes Respectively
It is our understanding that at the Cedar Hills Town Council meeting when preliminary approval was granted that it was understood that the lagoon would be available for 30 and 12 homes respectively.
[Emphasis added.]
* * * * # *
The trial court found that buyer in the following paragraph 2A of the amendment *823agreement waived the performance of condition (4):
Buyer agrees as follows: All conditions mentioned in the Earnest Money Receipts and Offer to Purchase mentioned above obligating buyer’s first payment therein are hereby deemed satisfied as of January 4, 1978.
Assuming that the above paragraph constitutes a waiver of the seller’s obligation regarding sewer as contained in the earnest money agreements, the amendment agreement added a further provision not found in the earnest money agreements that the seller would transfer certain shares of water to the town of Cedar Hills so that it in turn could furnish an adequate water supply for the subdivision. It is not contended by seller that this obligation was waived. As to this transfer, no finding was made by the court as to whether the seller was ready and prepared to perform. The buyer refers us to testimony that the water certificates were not available to seller until it had paid the entire indebtedness which it owed on its contract to purchase the land from its vendor. It appears that at the closing the seller was not prepared to transfer those shares as it had agreed. It is not clear, however, whether with the $215,000 which was to be paid to them by the buyers, they could have obtained the necessary certificates.
The amendment agreement also imposed on the seller the obligation to dedicate to Cedar Hills an easement which would provide access for the buyer to reach the 16 acres which were to be conveyed to him at the time of closing. The trial court made no finding as to whether the seller was prepared to fulfill that obligation.
It appears that at the time of closing the parties met and spent hours of time discussing the problems of water and sewer, and that they did not actually reach the matter of whether the seller had good and marketable title to deliver to the buyer to the 16 acres which it was then obligated to convey. The trial court made no specific finding on the matter of the title to the 16 acres, but only made a general finding as follows:
The defendant was not prepared or ready to deliver a good and marketable fee title to the premises purchased at the time of closure.
The evidence as to the status of the title to the 16 acres is conflicting. Buyer maintains that the seller was not ready to convey good and marketable title to it, while seller maintains that it was “definitely possible” that it could have done so. It is also unclear as to whether all encumbrances on the 16 acres could have been paid and removed by the use of the $215,000 payment which was due to the seller.
I cannot agree with the trial court that the buyer’s failure to make formal tender of the $215,000 payment disqualifies him from an action for damages for non-performance of the contract if seller was not prepared to deliver a good and marketable title to the 16 acres. The court found that the buyer had funds available to make the $215,000 payment. Under these facts, the case of Huck v. Hayes, Utah, 560 P.2d 1124 (1977), is dispositive. There the seller and buyer met at a closing and the court found that the buyer had sufficient funds to make the required payment, but he neither offered to pay the money nor was he requested by the seller to make payment. The preliminary title report indicated that title to the property was in the name of persons other than the seller, and the property was subject to a federal tax lien of $2726.67. In the suit by the buyer to compel specific performance, this Court stated:
Inasmuch as under the contract it was the defendant’s responsibility to furnish good title and a title insurance policy, the furnishing there was a condition precedent to his right to demand payment from the purchaser (the plaintiff).
It is fundamental that a party to a contract should obtain no advantage from the fact that he is himself unable to perform. Since defendant had not come forth with the agreed title insurance policy, demonstrating that he could convey a clear and marketable title as of the proposed closing date, March 8, 1974, he could neither demand payment by the *824plaintiff on that date nor claim that the latter was in default for failing to make payment.
I would hold that under these circumstances where the buyer had the funds available and was ready to make his payment and if the seller could not convey good and marketable title to the 16 acres which were then to be released, it would have been indeed a useless act for the buyer to have formally tendered the funds. Hack v. Hayes, supra.
It is significant to note that following the unsuccessful closing held on February 17, 1978, the buyer tried on at least two subsequent occasions to re-schedule a closing and in each instance notified the seller that he was still ready to perform. Buyer wrote to seller on March 13th asking for a closing on March 17th. The counsel for the buyer also wrote seller on February 23, 1978, and informed it that buyer was ready to close within 10 days.
I would reverse the judgment and remand the case with instructions to the District Court to make Findings of Fact on the following questions:
1. Was the seller ready to transfer the water shares to the town of Cedar Hills, and prepared to dedicate to Cedar Hills the easement for access to the 16 acres?
2. Was the seller prepared to deliver good and marketable title to the buyer to the 16 acres?
In both of the above, the seller should be allowed the use of the $215,000 payment to assist it to meet those obligations. Based on those additional findings, judgment should be entered accordingly.
STEWART, J., concurs in the dissenting opinion of HOWE, J.