James P. Hart, III v. Marie Holt Hart (now Pratt) ( 2001 )

COURT OF APPEALS OF VIRGINIA
Present: Judges Annunziata, Bumgardner and Frank
Argued at Salem, Virginia
JAMES P. HART, III
v. Record No. 1574-00-3
MARIE HOLT HART (NOW PRATT) OPINION BY
JUDGE ROSEMARIE ANNUNZIATA
MARIE HOLT HART (NOW PRATT) APRIL 3, 2001
v. Record No. 1603-00-3
JAMES P. HART, III
FROM THE CIRCUIT COURT OF ROANOKE COUNTY
Lawrence D. Diehl, Judge Pro Tempore
Melissa W. Friedman (Charles B. Phillips;
Phillips, Swanson & Phillips, on briefs), for
James P. Hart, III.
William H. Cleaveland (Leisa Kube Ciaffone;
Rider, Thomas, Cleaveland, Ferris & Eakin;
Gentry, Locke, Rakes & Moore, on briefs), for
Marie Holt Hart (now Pratt).
This divorce action is before us for the second time.
Previously, in Hart v. Hart, 27 Va. App. 46, 497 S.E.2d 496(1998), we reversed four rulings made by the Roanoke County
Circuit Court and remanded the case for further proceedings
consistent with our ruling.
On this second appeal, James P. Hart, III (husband) and
Marie Holt Hart (now Marie Holt Pratt) (wife) separately appeal
several of the trial court's rulings on remand. The husband
alleges that, on remand, the trial court erred: (1) in
modifying the easement over husband's partitioned parcel, which
the trial court granted in the original divorce decree; (2) in
determining the value of husband's separate property
contributions made to the parties' New York property and in
failing to properly recalculate husband's interest in the
parties' USAA Bond Fund account, which contained proceeds from
the New York mortgage note; (3) in computing the increase in
value of wife's contribution of her separate property to the
parties' USAA Bond Fund account; and (4) in ruling that a
portion of the parties' jointly owned real estate, "Parcel A,"
must be placed on the real estate market for sale at fair market
value.
Wife cross-appeals, alleging the court erred: (1) in
allowing the husband to introduce additional evidence of his
contributions of separate property to the parties' New York
property and in failing to properly recalculate each party's
portion of the USAA Bond Fund account; and (2) in finding that
wife had not properly exercised her option to purchase Parcel A.
For the following reasons, we affirm in part, reverse in
part, and remand for further proceedings consistent with this
opinion.
BACKGROUND
The parties were married in New York in 1968 and lived in a
home that husband had purchased before the marriage for $27,000.
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In 1986, they sold the New York home for $259,000, receiving a
part payment of $40,000 and a $219,000 twenty-year promissory
mortgage note. After selling the New York home, the parties
opened a USAA Bond Fund account using the $40,000 down payment
they received for the New York home as the initial deposit.
Over the years, money from various sources was deposited into
the account, including the New York mortgage note payments and
$20,500 that wife inherited from a relative.
The parties moved to Virginia, where they purchased a
forty-two acre parcel of land, called Plantation Point, which is
located on Smith Mountain Lake. At Plantation Point, they built
a home for themselves, eight rental units, and a home for wife's
parents.
The parties separated on February 4, 1994, and husband
filed for divorce in October, 1994. The trial court appointed a
commissioner in chancery to hear evidence and make
recommendations regarding equitable distribution of the parties'
property. The trial court issued a final divorce decree and
approved the commissioner's equitable distribution
recommendations with some modifications.
Both parties appealed the final decree. On appeal, we
reversed four of the trial court's rulings, three of which are
relevant to this appeal.
In the final decree, the trial court divided the Plantation
Point property into three parcels. The court awarded the
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husband the marital home and four of the eight rental units, and
awarded the wife the home that had been built for her parents
and the remaining four rental units. A third parcel, "Parcel
A," was to remain titled to both parties as tenants in common.
The final decree gave husband first option to purchase wife's
interest in Parcel A. Husband had sixty days from the entry of
the final decree within which to exercise the option. If
husband failed to exercise the option, wife was given sixty days
to purchase husband's interest in Parcel A. If neither party
exercised their option within the respective option periods, the
final decree provided that "the property shall be placed on the
market with an agreeable realtor at a fair market value and
sold, and the parties shall divide the net proceeds from the
sale equally."
In the final decree, the trial court established easements
on each party's tract for ingress and egress. The easement over
husband's tract granted the wife ingress and egress rights to a
boat ramp on Smith Mountain Lake. The court ruled that the cost
of maintaining each of the two easements "shall be the sole
responsibility of the respective owners" of the tracts across
which the easements run. We reversed this ruling, finding that
because both parties and their tenants would use the two
easements, the costs of maintaining and repairing the easements
must be apportioned between the parties. We remanded the case
to the trial court to "redetermine the parties' responsibilities
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for the maintenance costs of the joint easements in accordance
with our holding."
The trial court also divided the parties' interests in the
mortgage note from the New York home. Because husband had
purchased the home before the parties married, the court
classified the note as hybrid property. The court concluded
that in addition to making a $2,700 down payment on the home,
husband had made pre-marital mortgage payments in the amount of
$3,565 and had made improvements to the home prior to the
marriage at a cost of $10,000. The court further found that the
parties contributed $17,335 of marital property to the
post-marital mortgage payments. Based on these figures, the
court determined that the New York property and, thus, the
balance of the mortgage note, was 48.4% husband's property and
51.6% marital property.
We reversed the calculation, finding that the trial court
erred in including the cost of the improvements made by husband,
rather than the value those improvements added to the property.
We directed that "on remand, the chancellor shall determine the
husband's separate interest based on the value added by the
improvements rather than their cost."
In the final divorce decree, the court divided the parties'
interest in the USAA Bond Fund account. During the marriage,
wife inherited $20,500, which was deposited into the account.
The trial court ruled that the inheritance had been commingled
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with marital property to the extent that it was no longer
separate property. We reversed this ruling and held that the
inheritance money was wife's separate property. On remand, we
directed the trial court to reclassify the USAA Bond Fund
account, taking into account wife's separate contribution of the
inheritance proceeds as well the correct percentage of husband's
separate property interest in the New York mortgage note.
On January 15, 1999, the trial court held an evidentiary
hearing on the remanded issues. In addition, by agreement of
the parties, the court heard evidence concerning the purchase of
Parcel A that arose subsequent to the first appeal. The court
entered an order resolving the issues on November 16, 1999, and
these appeals followed.
ANALYSIS
I.
Easement
Husband alleges the trial court, on remand, exceeded its
authority in amending the definition of the easement over
husband's property. We agree.
Following the first appeal, we remanded the case to the
trial court to reallocate the parties' responsibilities for
maintenance costs for the two easements. On remand, the trial
court ordered the parties to divide the costs equally. After
ruling on this matter, the court stated, "[i]n addition to the
ruling of the court on the specific remand issue, the court has
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been requested to clarify the extent, width or other parameters
of the easements . . . ." The court then established detailed
specifications for the easements. We hold that the court erred
in doing so.
In the final decree, the court granted each party an
easement over the other party's parcel "[i]n order to permit
access of the parties to their residences, and for the
tenants . . . ." The easement in question over husband's
property was described as follows:
[Wife] and her tenants shall have the joint
use of Trah Drive for ingress and egress
over such portions of such roadway contained
on Parcel C [husband's property] . . .
including access from Blackwood Road to the
Southern part of such road and the branch
extending from said road to the existing
boat ramp . . . .
Neither party appealed the grant of the easements or the
description provided by the trial court.
On remand, the trial court supplemented its description of
the easement. 1 The court referred to the original report of the
1
On remand, the trial court ordered the following:
The specifications of the easements shall be
as follows:
(1) Based upon the testimony of the parties,
it is the opinion of the court that the
easement of ingress and egress for all joint
use easements affecting the property of each
party should be no less than a width of
FIFTEEN (15) feet. This will permit the
passage of two vehicles in opposite
directions and the towing of reasonably
sized boats on trailers.
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(2) At the bottom of Trah Drive at the boat
ramp spur, the easement should be expanded
to a width of not less than FORTY-FIVE (45)
feet or at such width as determined by the
parties, as will enable a vehicle towing a
boat trailer to turn around. The ability of
such a vehicle to turn around after dropping
off a boat was certainly implied and was the
intent of the court since it would be
unreasonable to assume that Mr. Hart would
require a vehicle to drive backwards with an
attached trailer along the entire length of
the road after dropping off the boat at the
ramp location. The court assumes that the
parties can determine the parameters of the
location of such an easement for such
purposes in the final easement to be drafted
herein. The ingress and egress shall be to
and include access to the boat ramp itself
sufficient to place a boat into the water of
the lake from such ramp and shall be up to
the 800 foot contour line of the property
owned by Mr. Hart, or such expanded
ownership beyond said line if owned by Mr.
Hart and if necessary to permit access of
boats into the water at the ramp
location. . . .
(3) The easement at the area near the boat
ramp location should also be of sufficient
size to permit the parallel parking of only
the vehicles used for towing and trailers
for the applicable boat along the side of
the access easement during the use of such
boat so as to avoid the requirement that a
user would have to drive the vehicle and
trailer all the way back to their rental
unit and then walk back down to the boat.
Any such proposal that such a vehicle and
trailer cannot be kept near the boat ramp
during the use of the boat would, in effect,
defeat the reasonable effectuation of an
ingress and egress easement and use of the
boat ramp as originally contemplated by the
commissioner and court. In common
experience, where one uses a boat ramp in a
reasonable manner, that includes within the
parameters of a reasonable easement access,
the ability to park within a near proximity
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commissioner, which was approved by the trial court and
incorporated into the final divorce decree. The commissioner's
report provided "a specific access (ingress and egress) easement
for boats and recreational access from the bottom of the tract
Parcel B across Parcel C to the waterfront with sufficient width
to permit reasonable boating access to the boat ramp . . . ."
Because wife did not appeal the easement granted in the
final divorce decree, husband objected to the court's
"clarification" of the easement, arguing that the divorce decree
was a final order, which after twenty-one days, could not be
modified by the trial court. Rule 1:1. The court held that its
"clarification" of the terms of easement did not constitute an
impermissible modification of its original order and that even
to the ramp after placing the boat in the
water. Any other interpretation would defy
common sense. Such a reasonable easement
and use shall be included in the easement to
be awarded to Mrs. Pratt for such boat ramp
access. Based upon the testimony of Mrs.
Pratt, the length of said parallel parking
easement shall be at least 300 feet from the
boat ramp up Trah Drive in order to
accommodate a sufficient number of vehicles
and boat trailers. Pursuant to the parties
agreement and testimony, and while the court
understands that Mr. Hart does not agree to
this ruling, the said parking easement shall
be located on the west side of the access
road easement. The width shall be an
additional TEN (10) feet to the west of the
general access road easement in order to
accommodate the width of the vehicle and
trailer and sufficient parking placement so
as to avoid any technical interference with
Mr. Hart's land.
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after twenty-one days "[t]he court has the power to clarify its
orders where there are clerical errors or omissions pursuant to
Va. Code Section 8.01-428(B)."
As the trial court acknowledged, under Rule 1:1, twenty-one
days after a court issues a final order, the court loses
jurisdiction over the case and cannot thereafter modify,
suspend, or vacate its final order. Code § 8.01-428(B)
provides: "[c]lerical mistakes in all judgments or other parts
of the record and errors therein arising from oversight or from
an inadvertent omission may be corrected by the court at any
time . . . ." We find that the "clarification" made in this
case does not constitute a clerical mistake or error as
contemplated by Code § 8.01-428(B). Such mistakes or omissions
must be apparent from the record. Cass v. Lassiter, 2 Va. App.
273, 277, 343 S.E.2d 470, 473 (1986) ("Code § 8.01-428(B)
confers upon a court the power to correct . . . clerical
mistakes in judgments which arise from oversight or inadvertent
omission. However, to invoke such authority the evidence must
clearly support the conclusion that an error of oversight or
inadvertence has been made."). In this case, however, the court
heard new evidence on the matter and elaborated on its original
decree.
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We likewise find that the court lacked authority to modify
its award under Code § 20-107.3(K)(4). 2 The clear language of
that statute limits the court's authority to modification of
awards dealing with pensions or retirement benefits.
Finally, we find that the court's "clarification" of the
easement definition impermissibly exceeded the scope of its
remand jurisdiction. Searles' Adm'r v. Gordon's Adm'r, 156 Va.
289, 294-99, 157 S.E. 759, 761-62 (1931); Krise v. Ryan, 90 Va.
711, 712-13, 19 S.E. 783, 783-84 (1894); Kaufman v. Kaufman, 12
Va. App. 1200, 1207-10, 409 S.E.2d 1, 5-7 (1991). Wife never
appealed the grant of the easement or its scope; therefore, we
did not consider that issue on appeal. We remanded the easement
issue for the explicit purpose of reallocating the parties'
responsibilities for the maintenance costs of the easements.
"Clarification" of the scope of the easement was not necessary
to the maintenance issue, nor did the court clarify the
2
Code § 20-107.3(K)(4) provides:
The court shall have the continuing authority
and jurisdiction to make any additional
orders necessary to effectuate and enforce
any order entered pursuant to this section
[giving the court authority to decree as to
the property of the parties], including the
authority to . . . [m]odify any order entered
in a case . . . intended to affect or divide
any pension, profit-sharing or deferred
compensation plan or retirement benefits
pursuant to the United States Internal
Revenue Code or other applicable federal
laws, only for the purpose of establishing or
maintaining the order as a qualified domestic
relations order or to revise or conform its
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definition for that purpose. Indeed, the court in its order
indicated that the issues were independent and that it was
considering the easement scope issue "in addition" to the
"specific remand issue."
Wife had twenty-one days to seek "clarification" or
modification of the easement scope or to appeal the court's
final order on that issue. However, wife failed to do so;
therefore, the order became final, and the trial court lacked
jurisdiction to alter the easement definition.
II.
Improvements to the New York Property
Husband alleges the trial court erred in valuing the
pre-marital improvements husband made to the parties' New York
home. Wife alleges the court was correct in its valuation, but
that it erred in allowing the husband to introduce evidence, on
remand, of additional pre-marital improvements he made to the
home. We agree that the court erred in allowing the husband to
introduce evidence of additional improvements.
During the original divorce proceeding, the husband
testified to improvements he had made to the New York home prior
to his marriage to wife. Specifically, husband testified that
he had installed carpeting in the home and a pool on the lot, at
a cost of $10,000.
terms so as to effectuate the expressed
intent of the order.
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On the first appeal, we held the trial court erred in using
the cost, rather than the value, of the improvements husband
made to the New York property in determining what portion of the
mortgage note was his separate property. We ordered the court,
on remand, to "determine the husband's separate interest based
on the value added by the improvements rather than their cost."
On remand, over wife's objection, the court heard new
evidence concerning the pre-marital improvements husband had
made to the New York home. Both husband and his first wife,
with whom he originally purchased the New York home, testified
concerning the improvements husband made to the home prior to
his marriage to wife. Although during the original divorce
proceeding the husband testified only to the cost of installing
the carpeting and the pool, on remand, he and his first wife
testified to various other improvements that they had made, such
as landscaping, repairing the barn, completing the ceiling in
the home, and installing sheet rock.
In order to establish the value added to the home by the
improvements, husband introduced evidence of an increase in the
state tax assessment of the property from the time he purchased
the home until the time he married wife. The court found that
based on the assessment figures alone, the house increased in
value over $20,000 prior to husband's marriage to wife.
However, the court discounted the increase in value to
$10,000 because "some of the improvements were completed after
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the new assessment was placed on the property" and "many of such
items were not capital improvements, but were more in the nature
of general repairs and maintenance for which no increase in
value can be attributable." The court also found that the tax
assessment value husband presented at the remand hearing
exceeded the value of the home he testified to during the
original divorce proceeding. Based on his original testimony,
the house only increased in value by $10,000 prior to his
marriage to wife. The court, therefore, held that husband was
limited to his testimony during the first trial as to the
overall increase in value of the home.
We agree with wife that the court erred in admitting
evidence of additional improvements husband made to the home.
The scope of remand was limited to determining the value the
carpeting and the pool added to the home; therefore, evidence of
further improvements was beyond the scope of remand. Newton v.
Newton, 202 Va. 96, 100-01, 116 S.E.2d 94, 97 (1960); Krise, 90
Va. at 712-12, 19 S.E. at 783-84. Although the court did not
find the property had increased in value to the full extent of
the tax assessment increase, and although the court stated that
it was not premising its decision on the repair and maintenance
improvements that were made, it is not clear from the court's
order whether it excluded from its determination of the increase
in value in husband's property the improperly admitted evidence
and whether it limited its consideration to the increase in
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value which the carpeting and pool added to the property.
Therefore, we remand on this issue and direct the trial court to
determine the value added to the home by the installation of the
carpeting and the pool alone. Because a portion of the proceeds
from the sale of the New York home, specifically the mortgage
note, was deposited into the USAA Bond Fund account, we also
order the trial court, following its recalculation of husband's
separate property share of the mortgage note, to determine the
parties' proportionate shares of the USAA Bond Fund account.
III.
Appreciation of Inheritance Property
During the first appeal, we held the trial court erred in
not classifying as separate property the $20,500 wife had
inherited from a relative. In accordance with our ruling, on
remand, the court reclassified the inheritance money as wife's
separate property. During their marriage, wife had deposited
the inheritance money into the parties' joint USAA Bond Fund
account. On remand, wife argued she should also receive the
passive growth of her inherited share in this account. The
trial court awarded her a proportionate share of the overall
growth of the account from the time she deposited the
inheritance money until the account funds were distributed to
the parties. Husband argues the court erred in granting wife
this increase because she failed to establish a proper method of
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determining the growth amount attributable to the inheritance
money. We disagree.
A party is entitled to the passive growth of their separate
property where the party can provide sufficient proof of such
increase. Moran v. Moran, 29 Va. App. 408, 415, 512 S.E.2d 834,
837 (1999); Mann v. Mann, 22 Va. App. 459, 465, 470 S.E.2d 605,
608 (1996). In this case, the court found that the wife had
proven the date when she deposited the inheritance money and
that she had made no withdrawal from the account after the
deposit. Based on the evidence, the court was also able to
determine the increase in value of the account over the relevant
time period and the wife's proportionate share of that growth in
value. Based on the evidence and the court's calculations, we
find the trial court did not abuse its discretion in finding
that wife had proven the value of the passive growth of her
separate property and in awarding her the appropriate amount.
V.
Parcel A
In the final divorce decree, the court divided the
Plantation Point property into three parcels, granting Parcel B
to wife and Parcel C to husband. The parties were to hold
Parcel A as tenants in common. Husband had sixty days from the
entry of the final divorce decree to "exercise his option" to
purchase wife's share of Parcel A for $7,500 per acre. If
husband did not exercise his option, then wife had "sixty days
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in which to purchase" husband's interest in Parcel A. If wife
failed "to exercise her option to purchase" husband's interest,
the court ordered that the property was to be sold at fair
market value. Wife claims the trial court erred in finding that
she failed to properly exercise her option to purchase Parcel A.
We agree.
The final decree was entered on March 21, 1997. Husband
did not exercise his option within the initial sixty-day period.
Wife's attorney sent a letter to husband's attorney on June 26,
1997 stating:
Please accept this letter as notice that the
Defendant, Marie Holt Hart, hereby exercises
her option to purchase the Complainant's 50%
interest in parcel A, at $7,500.00 per acre,
pursuant to the Final Decree . . . .
Mrs. Hart will tender the appropriate cash
on or before July 18th, 1997 in exchange for
Mr. Hart's endorsement on the appropriately
drafted Deed.
Husband did not respond to this letter and on July 3, 1997,
wife's attorney sent another letter stating: "I am writing this
letter as a follow-up to my previous letter notifying you of
Marie Hart's intention to purchase the acreage of Parcel A,
pursuant to the Final Decree." Wife enclosed a check for
$2,836.80, and explained in the letter that she was deducting
from the Parcel A purchase price various amounts husband
allegedly owed wife.
The trial court found that, although wife had
"articulat[ed] an intent to exercise the option" in a timely
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manner, by not tendering the full purchase price in her second
letter, she had made a counter offer to husband, rather than
exercised the option. Further, the court found that the final
decree required the wife to complete the purchase within the
sixty-day period. We disagree with the trial court's ruling.
The issue presented here has not been previously addressed
by this Court or the Supreme Court of Virginia. However, the
applicable principles are well-rooted in recognized principles
of contract law. An "option" is merely a "continuing offer to
sell, irrevocable during the option period." J.R. Kemper,
Necessity for Payment or Tender of Purchase Money Within Option
Period in Order to Exercise Option in Absence of Specific Time
Requirement for Payment, 71 A.L.R. 3d 1201 § 2 (1976 & Supp.
2000). Once the optionee "exercises" the option, or accepts the
offer, the option is converted into a bilateral contract of
purchase and sale. Am. Jur. 2d Vendor and Purchaser § 56
(2000). "The acceptance of an option to purchase realty must be
absolute and unconditional, in accordance with the offer made,
and without modification or the imposition of new terms in order
to constitute a valid exercise of the option . . . ." Id.
§ 49. The language of the option determines the method of
required acceptance. Although the parties can require tender of
payment as the method of exercising the option, unless the
parties specify such a requirement, tender is not necessary in
order to exercise the option.
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[W]here an option contract does not provide
for payment of the purchase price at the
time of, or coincident with, an optionee's
exercise or attempted exercise of the
option, or where such contract is silent as
to the time of payment, the courts have
usually adhered to the view, sometimes
referred to as the general rule, that in
such circumstances payment is not a
necessary requisite to exercise but is
instead simply one of the acts required of
the optionee in performance of his part of
the bilateral contract of purchase and sale
which was formed when he communicated to the
optionor his election or intention to
exercise the option and thereby accepted the
optionee's offer.
71 A.L.R. 3d 1201 § 2 (1976); see also Am. Jur. 2d Vendor and
Purchaser § 48, § 53.
The general rule that unless expressly stated otherwise,
tender is not required to exercise an option has also been
expressed in 1 Samuel Williston & Richard A. Lord, A Treatise on
the Law of Contracts § 5:18 (4th ed. 1990):
Especially in cases of options for the sale
of land, most courts interpret the option as
conditioned upon the giving of a promise to
pay the price for the land, that is, as
calling for the formation of a bilateral
contract rather than for tender of the
actual performance, which would be required
for acceptance in a unilateral contract.
This interpretation accords with the common
law preference for bilateral contracts, as
well as with the business need of
appropriate time for arranging the necessary
papers or other arrangements required to
make the conveyance.
This general rule also comports with the Restatement
(Second) of Contracts § 32 (1981), as to the required method of
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acceptance of offers: "In case of doubt an offer is interpreted
as inviting the offeree to accept either by promising to perform
what the offer requests, or by rendering the performance, as the
offeree chooses."
Accordingly, we hold that where an agreement granting an
option to purchase a particular tract of land requires that it
be exercised on or prior to a designated date, but is silent as
to the time at which payment of the stipulated purchase price is
to be made, the option may be exercised by the optionee without
making or tendering payment at the time of, or coincident with,
such exercise. 3
3
The courts of other jurisdictions have likewise held that
where the option agreement does not expressly require payment as
a condition precedent to exercise of the option, the optionee
may exercise the option by communicating his or her acceptance,
and tender of payment is not required. See, e.g., Grey v.
Nickey Bros., Inc., 271 F. 249 (5th Cir. 1921) ("[U]nless it is
the clear intention of the parties to require both acceptance
and performance within the time limit, the time within which an
option is to be exercised, relates only to acceptance and not to
performance."); Shull v. Sexton, 390 P.2d 313 (Colo. 1964)
("'payment or tender is not essential to acceptance unless the
option instrument makes it a condition precedent to, or a part
of, or necessary to, the acceptance or the exercise of the
option'" (citation omitted)); Parkway Trailer Sales, Inc. v.
Wooldridge Bros., Inc., 166 A.2d 710 (Conn. 1960) (holding that
where option agreement "was silent as to the manner in which the
option was to be exercised," notice of acceptance was sufficient
to exercise option); Littlefield v. Brown, 394 A.2d 794 (Me.
1978) (holding that where option agreement does not specify time
of payment, optionee may exercise option without tendering
payment); Gulf Oil Corp. v. Ferguson, 509 S.W.2d 1 (Mo. 1974)
(holding that where option did not expressly or impliedly
require payment of purchase price, notice of acceptance was
sufficient to exercise option); Siders v. Odak, 513 N.Y.S.2d 549(N.Y. App. Div. 1987) ("[I]n the absence of a specific provision
providing otherwise, an option is a unilateral contract which
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The trial court concluded that because the decree gave wife
"sixty days in which to purchase," wife had to tender payment
within the sixty days in order to exercise the option. However,
the decree did not specify that tender of payment was a
condition precedent to accepting the offer. In fact, the decree
made no mention of the method or timing of payment. Therefore,
we conclude that wife was free to choose her method of
acceptance, either by giving notice of her acceptance or by
actually performing. Furthermore, a contrary reading would
permit the husband to exercise his option by simply
communicating his acceptance, while requiring the wife to tender
full payment for the same piece of property. We reject such a
reading as inequitable. See Zimmerman v. Brown, 36 A. 675 (N.J.
Ch. 1897) ("Any doubts as to the character of the provisions as
to payment should here be resolved in favor of a construction
which will preserve the substantial equities of the parties.").
calls for acceptance in the form of a promise to create a
second, bilateral contract."); International Speedways, Inc. v.
Aman, 161 S.E.2d 50 (N.C. Ct. App. 1968) ("Where the terms of
the option do not require payment of the purchase price or any
part therof before it is exercised, no tender must be shown.");
Pennsylvania Min. Co. v. Martin, 59 A. 436 (Pa. 1904) (holding
that "the word 'buy,' when applied to a real estate transaction,
more often describes the passing of the equitable title from the
vendor to the vendee than it does the exchange of the full
purchase price and the deed of conveyance").
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Wife's first letter to husband on June 26, 1997 constituted
a valid acceptance of the option to purchase. In the first
letter, wife communicated her full, unequivocal and
unconditional acceptance to the terms contained in the final
decree. Upon husband's receipt of the letter, the parties had a
binding, bilateral, executory contract to sell Parcel A. See
Am. Jur. 2d Vendor and Purchaser § 56; Restatement of Contracts
2d § 63 (1981). From that point forward, husband was bound to
sell Parcel A to wife, and wife was obligated to buy Parcel A
according to the terms contained in the final decree. Any
conduct that occurred following the receipt of the first letter
pertained to performance, rather than formation, of the contract
to sell. Therefore, wife's letter dated July 3, 1997, whereby
she attempted to pay less than the full amount for Parcel A,
related to performance of her obligation under the contract and
did not constitute a failure to properly exercise the option.
Therefore, we hold that wife properly exercised her option
to purchase Parcel A. Any subsequent conduct not in accordance
with the terms of the contract may form the basis for a breach
of contract action by either party but does not affect the
existence of the contract.
Because we find wife properly exercised her option to
purchase, we do not reach husband's claim that the court did not
have the authority to order the sale of Parcel A.
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Accordingly, we affirm in part, reverse in part, and remand
for further proceedings consistent with this opinion.
Affirmed in part,
and reversed in
part.
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