Cattle Feeders, Inc. v. Jordan
In Cattle Feeders, Inc. v. Jordan, 549 S.W.2d 29 (Tex. Civ. App.--Corpus Christi 1977, no writ), Cattle Feeders, Inc., as lessee, and the Jordans, the lessors/landowners, entered into a five-year lease with an option to purchase the land. 549 S.W.2d at 31.
The agreement required that the cattle company give a ninety-day written notice of its intent to exercise the option to purchase.
At the expiration of the lease period, Cattle Feeders sent a letter to the Jordans in which it tendered the first purchase payment for the land pursuant to the terms set out in the option agreement, a payment which the Jordans refused. Id.
Cattle Feeders then brought an action against the Jordans, seeking specific performance of the option agreement.
The Jordans filed a motion in limine to exclude from the jury all of the evidence that pertained to waiver or estoppel on the part of the Jordans, and the trial court granted the motion.
Cattle Feeders contended that the Jordans engaged in conduct that excused strict compliance with the terms of the option agreement and that the trial court erred in refusing to allow Cattle Feeders to present this evidence to the jury.
This evidence, argued Cattle Feeders, would entitle it to equitable relief under Jones.
The excluded evidence included testimony from an individual who sought to testify that he had cleared some of the land for Cattle Feeders, charging between $ 3,670.00 and $ 3,850.00 for those services. Id. at 31-32. Cattle Feeders's president also testified that the original lease agreement was entered into to gain a tax advantage for the Jordans. Id. at 32.
The same witness further testified that Cattle Feeders cleared the land, graded the land for the appropriate slope for a feed yard, built ponds on the land, constructed a mobile home park for its employees, and made substantial expenditures on fences, fertilizer, and seed. Id.
He, similarly to the testimony of Pitcock in this case, testified that the company would not have made such expenditures if it was not "under the impression" that Cattle Feeders would acquire the land. Id. Mrs. Jordan also testified, explaining that she had observed all the improvements made and that she always thought Cattle Feeders would purchase the land, but never knew with certainty. Id.
She testified that she had received no communication from Cattle Feeders indicating its intent to exercise its option to purchase the land. Id.
After briefly summarizing the principles outlined by Jones, the Corpus Christi court affirmed the trial court's order, concluding that there was no evidence in the record that Cattle Feeders's failure to provide timely notice of its intent to exercise the option was the result of an honest and justifiable mistake. Id. at 32-33.
The Cattle Feeders case does add by dictum another thing to consider, that being "An optionee will be excused from strict compliance where his conduct in failing to comply was not due to willful or gross negligence on the part of the optionee but was rather the result of an honest and justifiable mistake. In addition, equity will also excuse strict compliance where the strict compliance was prevented by some act of the optionor such as waiver or misleading representations or conduct." Id. at 33.