Stockton v. Sowerwine

690 P.2d 1202 (1984)

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Nature of the Case

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Facts

Appellee’s father, Sowerwine Jr., owned property. In order to save the ranch, he got $300,000 from Stockton. Jr. then deeded 1,510 acres with a one-year option to repurchase 1,505 acres set forth in an Agreement and Option to Repurchase. It was agreed that upon exercise of the option, Stockton could keep five acres of his choice. Eventually, Sowerwine had to sue Stockton alleging that Stockton wrongfully hindered the exercise of the option. The option ran for one year and required the appellee’s father to tender to Stockton $303,000, together with interest at 19% in addition to all expenses Stockton incurred relating to his ownership of the land, plus $20,000. The property’s value was in excess of $1,000,000. The option ran until June 22, 1982. On June 10, 1982, Jr. wrote Stockton of his intent to exercise the option. Stockton got that letter two days later. On the 11^th Jr. requested a list of the expenses incurred by Stockton and Stockton refused to provide that list or with the selection of the five acres he was keeping. Stockton claimed he did not know which 5 acres he wanted to keep but independent third party evidence showed that he knew exactly which ones he wanted. Jr. sought interim financing at a bank. However, one day before the bank’s committee looked at the loan, Stockton, wrote a letter to the president of that bank, informed it of restrictive covenants, and averred that he could not see how the Federal Land Bank would give a primary loan on such property. This letter to the bank was hand delivered, and Stockton drove 90 miles to do so. In addition, Stockton was a president of another bank. The bank considered the application and then rejected it on the 15^th based in large part on Stockton’s letter. The Federal Land Bank was ready to close the loan on the last day of the option just as soon as a legal description of the property had been obtained. Stockton refused to cooperate. The trial court found that Stockton had intentionally violated the implied covenant of good faith. The court awarded specific performance. Stockton appealed.