ACTION DEVELOPMENT CORPORATION v. Woodall

205 S.E.2d 592 (1974) 21 N.C. App. 567

ACTION DEVELOPMENT CORPORATION
v.
Henry D. WOODALL and wife, Evalyn M. Woodall.

No. 731SC784.

Court of Appeals of North Carolina.

June 5, 1974.

Twiford, Abbott & Seawell by O. C. Abbott and John G. Trimpi, Elizabeth City, for plaintiff appellee.

White, Hall, Mullen & Brumsey by Gerald F. White and William Brumsey, III, Elizabeth City, for defendant appellants.

MORRIS, Judge.

Section V of plaintiff's complaint alleges the following:

"In accord with the provisions of the said contract of sale, plaintiff tendered to defendants the down payment and requested a conveyance of the property and releases from the operation of the purchase money deed of trust as provided by the contract of sale; that the defendants failed and refused to convey and release any property for the down payment."

It is apparent that plaintiff asks for specific performance by release of portions of the land before or at the time of the payment of the $75,000. The contract is certainly not ambiguous. It clearly states that $5,000 is to paid upon the execution of the contract; that $75,000 plus interest at the rate of 7% is to be paid on or before 1 March 1973, that the balance of the purchase price is payable $25,000 annually with interest at the rate of 7% secured by a deed of trust; that upon the payment of the $80,000, sellers will give a deed and buyer will give a deed of trust to secure the balance of the purchase price.

In a subsequent section, the contract provides that from time to time as buyer develops the property, sellers will release from the operation of the deed of trust one acre of land for each $1,500 paid and that that payment will be applied to the obligation secured by the deed of trust.

It is obvious to us that no release of land could be made until the deed of trust became operative. The deed of trust could not have become operative until buyer tendered the $75,000 plus interest and received a conveyance of the land. After that had been accomplished, seller, in accordance with the contract, was obligated to release from the operation of the deed of trust one acre of land for each $1,500 paid by buyer, which payments would be applied to the buyer's obligation to sellers.

It is inconceivable that plaintiff can expect specific performance of a contract in a different method than the contract itself specifies. This principle is specifically spelled out in McLean v. Keith, 236 N.C. 59, 71, 72 S.E.2d 44, 53 (1952), where Justice Johnson, speaking for a unanimous Court, said:

"The remedy of specific performance is an equitable remedy of ancient origin. Its sole function is to compel a party to do precisely what he ought to have done without being coerced by the court. 49 Am.Jur., Specific Performance, Sec. 2, p. 6.

Equity can only compel the performance of a contract in the precise terms agreed on. It cannot make a new or different contract for the parties simply because the one made by the parties proves ineffectual. 49 Am.Jur., Specific Performance, Sec. 22, pp. 35 and 36. ``The remedy of specific performance is never applicable where there is no obligation to perform.' 58 C.J., p. 847, and specific performance does not lie until there has been a breach of contract. 58 C.J., p. 851."

Had plaintiff tendered $75,000 to defendants on 1 March 1973, and defendants had refused to convey the property and take a deed of trust securing the balance of the purchase price, defendants would have breached the contract, nothing else appearing, and plaintiff would be entitled to specific performance. However, the plaintiff's affidavits in opposition to the motion state only: "That on March 1, 1973, Action Development Corporation was ready, willing and able to pay the consideration as proposed in the contract upon the delivery of a general warranty deed free of encumbrances." Even if the court considered the answers to interrogatories, and there is no indication in the record that it did, the answer to the question of whether plaintiff paid the $75,000 due 1 March 1973 as called for in the contract was that the plaintiff "had the $75,000 plus 7% interest" to pay defendants and notified the attorney who prepared the contract by letter before 1 March 1973, that plaintiff was ready to settle the transaction. None of this constitutes tender. "In making a tender there must be an actual offer by the tenderer to pay. An announcement without more of an intention of making a tender is not sufficient; nor is an assertion of readiness or willingness to pay sufficient." 86 C.J.S. Tender § 28.

In Aiken v. Andrews, 233 N.C. 303, 305, 63 S.E.2d 645, 646 (1951), Stacy, C. J., speaking of necessity of tender in a situation involving a contract of sale said:

"Speaking of its purpose and effect in Bateman v. Hopkins, 157 N.C. 470, 73 S.E. 133, 134, Walker, J., with his usual thoroughness, analyzed the authorities and drew from them the following epitome: ``Where the stipulations are mutual and dependent—that is, where the deed is to be delivered upon the payment of the price—an actual tender and demand by one party is necessary to put the other in default, and to cut off his right to treat the contract as still subsisting.'"

Here obviously actual tender and demand was necessary before defendants could be in default and plaintiff in a position to demand specific performance, assuming the performance he demands is in accordance with the terms of the contract. Here, however, the performance plaintiff demands is not in accordance with the terms of the contract. Had plaintiff tendered the $75,000 plus interest, it would have been entitled only to receive a warranty deed and have defendant accept its deed of trust for the balance of the purchase price. Then, and only after the payment of the $75,000 plus interest, could plaintiff be entitled to release of property from the operation of the deed of trust upon the payment of additional sums of money in multiples of $1,500.

In our view of the case, the court should have granted defendants' motion for summary judgment.

Reversed.

HEDRICK, J., concurs.

VAUGHN, J., dissents.

VAUGHN, Judge (dissenting):

I agree with the majority's view of the meaning of the contract as it relates to the release of land from the operation of the deed of trust upon the payment of additional sums by plaintiff.

I do not agree that the judge erred when he declined to grant summary judgment in favor of defendant and thereby dismiss plaintiff's action to enforce the contract "according to the terms thereof," damages or other relief. We are not dealing with an option to purchase but with a contract of purchase and sale where, ordinarily, time is not of the essence. Moreover, plaintiff, according to the affidavits, went into possession under the contract of sale shortly after its execution on 25 September 1972 and has expended over $160,000.00 in development of the property. Plaintiff's failure to pay the additional $75,000.00 on 1 March 1973, whether prompted by a dispute over the terms of the contract, the existence of unsatisfied liens against the property or other reasons, did not, as a matter of law, constitute an abandonment of the contract and did not entitle defendants, on 28 March 1973, to "cancel" the contract without reasonable and formal notice to plaintiff that if plaintiff did not fulfill its obligations, defendants would not consider themselves bound.