Paul and Bonnie Swaims v. Samuel and Liana Greenway

ca03-031

ARKANSAS COURT OF APPEALS
NOT DESIGNATED FOR PUBLICATION
DIVISION II

CA03-31

November 5, 2003

PAUL and BONNIE SWAIMS AN APPEAL FROM INDEPENDENCE

APPELLANTS COUNTY CIRCUIT COURT

[E2001-530-4]

v.

HONORABLE KEITH RUTLEDGE,

SAMUEL and LIANA GREENWAY CIRCUIT JUDGE

APPELLEES

REVERSED

Robert J. Gladwin, Judge

This is an appeal from an order of the Independence County Circuit Court granting specific performance of a land-sale contract to the purchasers, appellees Liana and Samuel Greenway. Appellants Paul Swaims and Bonnie Swaims argue that the trial court erred in ordering specific performance of an unenforceable contract, in denying their motion to set aside and reconsider the decree, and in denying their motion to recuse. We agree that the trial court abused its discretion in refusing to set aside the decree, and we reverse.

On September 21, 2001, appellant Paul Swaims signed a partially typed and partially handwritten document prepared by Mrs. Greenway. This document, which was also signed by the Greenways, stated:

OFFER AND ACCEPTANCE

I Paul Swaims agree to sell this house and five acres at Bert Barnes home place on Collie Town Rd for $8,500 to Samuel T. Greenway.

This agreement is accepted by Sam & Lianna Greenway, with the understanding that there are no back taxes, or liens against the house and acreage above mentioned.

Deed & possession upon full payment.

The Swaimses refused to go through with the sale, and the Greenways sued them for specific performance. In their complaint, the Greenways alleged that the land's legal description was as follows:

The part of the following-described parcel of land containing a house and Five (5) acres known as "The Bert Barnes Homeplace On Collietown Road":

All that part of the SE 1/4 of the NE 1/4 of Section 18, Township 14 North, Range 7 West, lying and being North of Collietown Road, as presently located, LESS AND EXCEPT a strip of land one and one-half rods wide off the East side thereof.

In his answer, Mr. Swaims asserted that the document was unenforceable, that it did not contain the essential elements of a binding contract, and that it was never intended to be binding. He stated that Mrs. Greenway had told him that it was to be used by the Greenways to obtain a loan from Mrs. Greenway's brother. He also alleged that no consideration was received. Mrs. Swaims raised the statute of frauds as a defense and pointed out that she had not signed the document. In their amended complaint, the Greenways asserted sufficient performance on their part to take the agreement out of the statute of frauds and raised the issue of promissory estoppel. They filed a second amended complaint that included a request for damages for breach of contract.

After trial, the circuit court ordered specific performance of a contract to convey the following property:

All that part of the SE 1/4 of the NE 1/4 of Section 18, Township 14 North, Range 7 West, lying and being North of Collietown Road, as presently located, LESS AND EXCEPT a strip of land one and one-half rods wide off the East side thereof, containing 5 acres more or less.

The Swaimses filed a timely motion to set aside the order and for reconsideration, arguing that the description of the land set forth in the order differed from that contained in the document. They asserted that the land described in the order actually contains twenty-seven acres, not the five referred to in the document, and that it would be unconscionable to order them to convey twenty-seven acres for only $8,500. The Swaimses also pointed out that the document did not provide a means by which to identify the land. In response, the Greenways argued that the Swaimses had failed to object to the land's description before or during trial, and had therefore waived that argument. They also contended that the Swaimses had defrauded them at trial by introducing into evidence a copy of their deed, which described their property as:

All that part of the SE 1/4 of the NE 1/4 of Section 18, Township 14 North, Range 7 West, lying and being North of Collietown Road, as presently located, LESS AND EXCEPT a strip of land one and one-half rods wide off the East side thereof.

After a hearing, the trial court issued an order denying the Swaimses' motion. In a letter, the court directed the parties to conduct a survey to determine the five acres to be transferred. The Swaimses filed a timely notice of appeal and a motion to stay the judgment. Two days later, they filed a motion asking the trial judge to recuse on the ground that he was not impartial. After a hearing was held on the motion to recuse, the circuit court entered an order finding that the Swaimses' witnesses (two attorneys who witnessed the hearing on the motion to set aside the decree) were not credible.

The Swaimses argue on appeal that the trial court erred in ordering specific performance of an unenforceable contract, in denying their motion to set aside and reconsider the decree, and in denying their motion to recuse.

Although we review traditional equity cases de novo on appeal, we will not reverse the circuit court's findings of fact unless they are clearly erroneous. McNamara v. Bohn, 69 Ark. App. 337, 13 S.W.3d 185 (2000). A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed. Campbell v. Campbell, 336 Ark. 379, 985 S.W.2d 724 (1999). We are left with such a conviction in this case.

In our view, the trial court's description of the tract to be conveyed is clearly erroneous. The error was made clear in appellants' motion to set aside and reconsider the order awarding specific performance. We will not reverse a trial court's decision regarding the setting aside of an order unless it has abused its discretion. See Carter v. Carter, 303 Ark. 70, 792 S.W.2d 597 (1990); Fazeli v. Barnes, 47 Ark. App. 99, 885 S.W.2d 908 (1994). We agree with the Swaimses' argument that the trial court abused its discretion in denying their motion to set aside and reconsider the order awarding specific performance to the Greenways because the order included a description of all twenty-seven of the acres in the tract owned by the Swaimses, instead of the five acres referred to in the document and at trial, and which the Greenways sought in their complaint.

At the hearing on the motion to set aside the order, the trial court stated that the Swaimses had failed to establish that the legal description of their deed contained more than five acres. We disagree. We also find no merit in the Greenways' contention that the Swaimses failed to adequately develop this issue below to preserve it for appeal. At trial, Mr. Swaims consistently denied knowing the description of the Bert Barnes home place and testified that he and his wife owned land around the property in dispute.

The Greenways also assert that the Swaimses admitted in their answers that the description of the five acres in dispute is the same as that set forth in the complaint. We disagree. In their complaint, the Greenways asserted that the parties had entered into an agreement to purchase "[t]he part of the following-described parcel of land containing a house and Five (5) acres known as `The Bert Barnes Homeplace On Collietown Road...'" and then set forth the legal description that appears in appellants' deed. [Emphasis added.] Therefore, it is apparent that the Greenways sought only a conveyance of that part of the tract described in the Swaimses' deed that constituted the Bert Barnes home place, and the Swaimses were not required to admit or deny that the description in their deed is the description of the five acres.

The Greenways further contend that Mr. Swaims admitted at trial that the legal description of the property in dispute is the same as that provided in the deed, and cite his testimony at page seventy-three of the record. A review of that testimony, however, demonstrates that he did not make such an admission.

Indeed, nothing in the record supports the trial court's direction to the Swaimses to convey all of the land described in their deed. In the order, the trial court awarded the Greenways far more acreage than they sought or that the evidence might support. Accordingly, we reverse the denial of the Swaimses' motion to set aside the decree.

As discussed above, our standard of review in equity cases is de novo. All of the issues raised in the court below are before the appellate court for decision and trial de novo on appeal in equity cases involves the determination of fact questions as well as legal issues. Tyson Foods, Inc. v. ConAgra, Inc., 349 Ark. 469, 79 S.W.3d 326 (2002). The appellate court reviews both law and fact and, acting as judges of both law and fact as if no decision had been made in the trial court, sifts the evidence to determine what the findings of the trial court should have been and renders a decree upon the record made in the trial court. Id. The appellate court may always enter such judgment as the trial court should have entered upon the undisputed facts in the record. Id. Accord Weigh Sys. S., Inc. v. Mark's Scales & Equip., Inc., 347 Ark. 868, 68 S.W.3d 299 (2002).

The Swaimses argued at trial that the document did not embody a binding contract. In their answers, they asserted that there was not an enforceable contract. Mr. Swaims asserted no consideration, and Mrs. Swaims raised the statute of frauds. The Swaimses asserted at trial that they had not intended to enter into a binding contract and that the document in question was not intended to represent one. The denial of a valid contract is sufficient to raise the defense of the statute of frauds. Sossamon v. Davis, 271 Ark. 156, 607 S.W.2d 405 (Ark. App. 1980).

The statute of frauds, which is set forth in Ark. Code Ann. § 4-59-101(a)(4) (Repl. 2001), provides:

Unless the agreement, promise, or contract, or some memorandum or note thereof, upon which an action is brought is made in writing and signed by the party to be charged therewith, or signed by some other person properly authorized by the person sought to be charged, no action shall be brought to charge any ... [p]erson upon any contract for the sale of lands, tenements, or hereditaments, or any interest in or concerning them ....

Specific performance is an equitable remedy that compels performance of a contract on the precise terms agreed upon by the parties or such a substantial performance as will do justice between the parties under the circumstances. Dossey v. Hanover, Inc., 48 Ark. App. 108, 891 S.W.2d 67 (1995). Because it is an equitable remedy, courts are allowed some latitude in granting or withholding that relief, depending upon the equities of a particular case. Id. In order to be enforceable, a contract for the sale of land must comply with the statute of frauds. Boensch v. Cornett, 267 Ark. 671, 590 S.W.2d 55 (Ark. App. 1979). Unless the essential terms of the sale can be ascertained from the writing itself, or by reference in it to something else, the writing does not comply with the statute of frauds, and parol evidence cannot supply the missing terms. Van Dyke v. Glover, 326 Ark. 736, 934 S.W.2d 204 (1996). A sufficient description of the land is an essential term. Id. The description in the contract must be as definite and certain as that required in a deed of conveyance. Fordyce Lumber Co. v. Wallace, 85 Ark. 1, 107 S.W. 160 (1907). If a conveyance does not describe the land with such particularity as to render identification possible, the conveyance is nugatory, unless the deed contains a reference to another instrument that does include a sufficient description. Sorrells v. Bailey Cattle Co., 268 Ark. 800, 595 S.W.2d 950 (Ark. App. 1980). See also James v. Medford, 256 Ark. 1002, 512 S.W.2d 545 (1974); Turrentine v. Thompson, 193 Ark. 253, 99 S.W.2d 585 (1936); Richardson v. Stuberfield, 168 Ark. 713, 271 S.W. 345 (1925).

In this case, the property is described as the Bert Barnes home place, containing five acres, on Collietown Road. The document does not provide the state, county, township, section, or range, nor does it refer to a particular town. It also provides no key by which to definitely determine the exact location of that home place. Therefore, it does not satisfy the statute of frauds, and the Greenways are not entitled to specific performance.

In light of our decision to reverse, we need not decide the recusal issue.

Reversed.

Robbins and Bird, JJ., agree.