M & R Investment, Inc. v. Long

Stolz, Judge. On March 2, 1971, the plaintiff-purchaser and the defendants-sellers executed an option agreement for the purchase-sale of real estate for which option the plaintiff-purchaser paid the defendants-sellers an option payment of $2,000. Said option agreement was for a period of 90 days and further provided that the plaintiff-purchaser could extend said period for three successive 30-day periods by paying $500 per 30-day period, and the plaintiff-purchaser did in fact exercise his extension rights as aforesaid. The sixth paragraph of the aforesaid option provided: "It is stipulated that during the original term of the said ninety (90) day option, beginning with the date of this instrument and/or during the thirty (30) day renewal extensions of this Option Agreement, as set forth in paragraph numbered Fourth, that the failure of the Federal Housing Administration to approve the property [177] and to issue its firm commitment for the insurance of the mortgage acceptable to the Purchaser, that upon notice to the Owner of such fact, the Owner and/or the Escrow Agent shall forthwith, or in all events, within ten (10) days after such notice, return to the Purchaser the Two Thousand and no/100 ($2,000.00) Dollars delivered for the ninety (90) day option period as described in the paragraph numbered Third.” Argued May 21, 1975 Decided October 17, 1975. On October 28, 1971, the acting area director of the Department of Housing and Urban Development wrote the plaintiff that the site for the proposed construction was unacceptable. On November 24, 1971, a letter was sent from the plaintiff to Mr. William Plunkett, the defendants’ real estate agent, enclosing a copy of the letter from H.U.D. to the plaintiff of October 28, 1971, and requesting a refund of the $2,000 referred to in the option agreement executed by the parties. The defendants’ refusal to comply precipitated this litigation. The trial court overruled the defendants’ motion for summary judgment, and sustained the plaintiffs motion for summary judgment. The defendants appeal. 1. The trial judge was correct. There was "a failure of the F. H. A. to approve the property” within the period contemplated in the option and extensions. Consequently, upon the purchaser-plaintiffs notice to the sellers’ agent thereof, the $2,000 should have been refunded to the purchaser-plaintiff. 2. The plaintiff’s claim to the money is not defeated by reason of the time interval between receipt of the notice from F.H.A. (October 28,1971) and the plaintiff’s request for refund sent to the defendant’s agent (November 24, 1971). The 10 days referred to in paragraph 6 of the option applies to the notice that the plaintiff-purchaser gave to the defendants-sellers of the F.H.A. refusal to approve the property. Judgment affirmed. Bell, C. J., Panned, P. J., Deen, P. J., Quillian, Clark and Marshall, JJ., concur. Evans and Webb, JJ., dissent. Pierce, Ranitz, Berry, Mahoney & Forbes, John M. Ranitz, for appellant. Bouhan, Williams & Levy, B. H. Levy, Jr., for appellee.