Opinion
HAYS, Judge, dissenting.
I am unable to comprehend how the majority could arrive at the conclusion that there is substantial evidence that the offer and acceptance agreement was rescinded by mutual consent. Neither party urges this point on appeal, and nothing in the language of the trial court provides a foundation for such a contention.
Each side argues strenuously the opposing party breached the contract and the trial court's finding that neither side met the burden of proof as to damages cannot be reconciled with the evidence.
The real issue is, as I see it, which party failed to meet the obligations of the offer and acceptance agreement. A careful reading of this record leads me to the conclusion that it was the Sellers who breached the contract by failing to provide evidence of merchantable title as required by the agreement.
The appellant offered substantial evidence as to damages, and the appellees offered rebuttal evidence on damages. The court should have made a finding based on the preponderance of the evidence as to the party responsible for breach of the contract and the amount of damages, if any, sustained by reason of the breach.
I concede the Buyers equivocated on the January 1 payment to Northwestern Mutual Life Insurance Company, but this was not fatal to the agreement. If it was fatal breach, when did it become so, on January 2, or February 1, or March 1? Time was not of the essence and as I read the provision, it was simply that Buyers were responsible for that payment in connection with the closing together with any interest accruing by reason of late payment. It is clear the parties contemplated closing by the end of the year when they executed the offer and acceptance agreement on November 24. However, the abstracts which Sellers contracted to furnish were not delivered to the Buyers until January 10 and Buyers had a reasonable time from that point to examine the abstracts. To hold the Buyers breached this provision by failing to pay the January 1 payment when they did not even receive the abstracts until January 10 is going further than I am able to go in upholding the trial court. Moreover, how could it be said the Buyers should have risked payment of $22,500.00 in the face of abstracts containing as many clouds and encumbrances as were admittedly present here? In short, I interpret this provision as contemplating the Buyers would make the payment as soon as the transaction was closed.
If Sellers had moved with greater punctuality or had shown greater interest in moving to a closing, this January 1 mortgage payment would not have been a stumbling block as Sellers later contended. Sellers never made categorical demand that the payment be made. Sellers say they considered Buyers to have forfeited by the later part of January because of the non-payment, but their actions belie that attitude. In February they accepted the return of the abstracts for the issuance of title insurance, and after March 1, they forwarded to Sellers a title commitment reflecting numerous encumbrances on the title and no evidence of patents for some of the lands. Even Seller's letter of April 4, raising the suggestion of a breach by the Buyers (written after Sellers had contracted with another buyer), makes no mention of the alleged breach by failure to pay the January 1 payment. Moreover, when Sellers wrote Buyers on April 13, well after Sellers had contracted to sell to Collier, Sellers wrote the Buyers as though the contract was still in effect, saying: "and we are still considering General Mortgage bound to the original contract and expect them to complete said contract ..."
The real stumbling block in this transaction, as I see it, was Seller's failure to provide evidence of certain patents and to remove numerous encumbrances in favor of White River Production Credit Association. It is undisputed these encumbrances were outstanding and totaled in excess of $400,000.00, but Sellers' only explanation for their failure to remove or to satisfy them was that, "we also agreed at the same time that PCA would either be assumed (by the Buyers) or be paid off but that wasn't part of the written contract." However, they were not included in the agreement and Buyers had every right to stand upon the agreement as signed.
I would reverse the case and remand to the trial court for a new trial. De Vazier v. Whit Davis Lumber Company, 257 Ark. 371, 516 S.W.2d 610; Hinton v. Bryant, 232 Ark. 688, 339 S.W.2d 621.
I am authorized to say that WRIGHT, C. J., concurs in this dissent.