Ballenger v. Castle Rock Building Corp.

904 S.W.2d 62, 1995 Mo. App. LEXIS 1391, 1995 WL 450847
CourtMissouri Court of Appeals
DecidedAugust 1, 1995
DocketWD 49901
StatusPublished
Cited by10 cases

This text of 904 S.W.2d 62 (Ballenger v. Castle Rock Building Corp.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ballenger v. Castle Rock Building Corp., 904 S.W.2d 62, 1995 Mo. App. LEXIS 1391, 1995 WL 450847 (Mo. Ct. App. 1995).

Opinion

HANNA, Judge.

This appeal arises out of the alleged breach of a real estate contract entered into between the appellants, Phillip and Raylene Ballenger, and the respondent, Castle Rock Building Corporation, d/b/a Eagle Bay Resort (Castle Rock). Castle Rock owns a subdivision known as Eagle Bay in Benton County. On July 13, 1992, the appellants entered into a “Real Estate Agreement” with Castle Rock for the purchase of a lot at the Eagle Bay Resort. The purchase price of the lot was $4995. The appellants made a down payment of $500 with the balance to be paid in accordance with a promissory note, with monthly installments of $78.11 payable to Castle Rock beginning on August 13,1992, for a period of eight years. They made all of the required monthly payments through April 1993, as well as a payment on the annual assessment on the property in the amount of $72.

Pursuant to the terms of the agreement, Castle Rock was required to deliver a recorded warranty deed to the appellants within sixty days of the signing of the agreement, but no later than September 13, 1992. The agreement also provided that if the appellants did not receive the warranty deed within the specified time period, they were “requested” to notify Castle Rock in writing.

The appellants did not receive the original recorded warranty deed until May 1993. There was conflicting testimony as to when Castle Rock was first notified that the appellants had not received their warranty deed. Mrs. Ballenger testified that she wrote to Castle Rock in October 1992, notifying the company that they had not received the deed. Castle Rock’s president, Daniel Spurck, testified that the company had not received Mrs. Ballenger’s letter. He further testified that Castle Rock did not receive written notification until May 1993.

In a letter sent by the appellants’ attorney, Castle Rock was advised that the appellants were rescinding the real estate agreement because they had not received the warranty deed within the time specified in the agreement. The appellants also requested a return of all sums paid under the agreement. The appellants stopped making payments on *64 the property after April 1993. Upon receipt of the letter from appellants’ attorney, Castle Rock sent a letter to the appellants explaining that the deed had not been delivered because of “unavoidable delays” in obtaining property titles and that the deed would be recorded and delivered within fourteen days. A warranty deed was sent to the appellants on May 25, 1993, over nine months after the agreed upon deadline. Having already elected to rescind the agreement, the appellants refused to accept the untimely deed. In response, Castle Rock accelerated the debt and declared the entire balance due on the note.

In March 1994, the appellants filed a first amended petition alleging that Castle Rock’s failure to provide the warranty deed within the period of time specified in the real estate agreement constituted a breach of the agreement, entitling appellants to a rescission of the agreement and a refund of all amounts paid to Castle Rock. In its responsive pleading, Castle Rock counterclaimed for the balance due on the promissory note. The case was tried to the court on July 7, 1994. The court found in favor of Castle Rock on appellants’ petition and on Castle Rock’s counterclaim, awarding damages in the amount of $4,252.90, plus costs. This appeal followed.

For their sole point on appeal, appellants contend the trial court erred and misapplied the law in determining that appellants were not entitled to rescission of the agreement and recovery of all sums paid to Castle Rock because Castle Rock breached the agreement by failing to deliver the warranty deed within the time period specified in the agreement. Our standard of review is governed by Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976), in that we will sustain the trial court’s judgment unless it erroneously declares or misapplies the law. Id. at 32.

“A party to a contract may, in certain instances, elect to rescind upon a breach by the other party.” McCullough v. Newton, 348 S.W.2d 138, 142 (Mo.1961). “Rescission of a contract extinguishes it as effectually as if it had never been made, and restores the parties to the positions they occupied before the contract was executed.” Phillips v. Bradshaw, 859 S.W.2d 232, 235 (Mo.App.1993). To justify a rescission, the breach “must relate to a vital provision going to the very substance or root of the agreement, and cannot relate simply to a subordinate or incidental matter.” B & B Equip. Co. v. Bowen, 581 S.W.2d 80, 85-86 (Mo.App.1979).

The purpose of the agreement in this ease was the sale and purchase of real estate. Pursuant to the terms of the agreement, the property was to be conveyed when Castle Rock delivered the warranty deed within sixty days of the signing of the agreement, but no later than September 13, 1992. The recording and delivery of the warranty deed was essential to complete the transfer and conveyance of the property. Accordingly, we find that the delivery of a recorded warranty deed went to the very substance and root of the agreement.

Castle Rock argues that since the agreement did not contain a “time is of the essence” provision, the mere delay in delivery of the warranty deed did not constitute a material breach justifying rescission of the agreement. In support of this argument, Castle Rock relies on Mills v. Keasler, 395 S.W.2d 111 (Mo.1965). Mills is factually distinguishable. At issue in Mills was a contract for the exchange of real estate whereby the defendant agreed to transfer 640 acres of farm property with encumbrances not to exceed $82,500 in exchange for a motel owned by the plaintiff. Pursuant to the agreement, the defendant had until December 15, 1961, to take appropriate steps to ensure that the encumbrances on the property did not exceed $82,500. At the time of the execution of the contract in October 1961, the plaintiff knew that the encumbrances exceeded $82,-500. However, two days after the contract was executed, the plaintiff prematurely recorded the deed rather than waiting until the time specified in the contract. As a result, the completion of the conveyance was delayed several months beyond the December 15 deadline. The court determined that the plaintiff could not rescind the agreement on the ground of untimely performance because the plaintiff had contributed to the delay in performance and extended the time for the defendant to complete his obligations under *65 the agreement. Id. at 117. After determining that the plaintiff had contributed to the delay, the court found that the plaintiff was in no position to complain of the delay and, therefore, the defendant was entitled to a reasonable time beyond the date specified in the agreement within which to comply. Id.

In this case, the court made no finding that the appellants contributed to the delay in delivery of the warranty deed.

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Bluebook (online)
904 S.W.2d 62, 1995 Mo. App. LEXIS 1391, 1995 WL 450847, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ballenger-v-castle-rock-building-corp-moctapp-1995.