Kennedy v. Embry
1888 Tex. LEXIS 1304, 72 Tex. 387, 10 S.W. 88 (1888)
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Rule of Law:
In an executory contract for the sale of land, if the vendee completely fails to perform any part of the contract and their actions create a reasonable belief that they have abandoned it, the vendor may rescind the contract and sell the property to a third party without providing notice of rescission to the original vendee.
Facts:
- On July 2, 1878, J. P. Smith conveyed a block of land to W. C. Dismukes for $250, for which Dismukes gave promissory notes secured by a mortgage on the land.
- Dismukes never paid any part of the purchase money, never took possession of the land, and never paid any taxes on it.
- Sometime in 1879 or 1880, Dismukes left the State of Texas and did not return.
- Throughout this period, Smith continued to pay the taxes on the land.
- On January 27, 1882, Smith conveyed the same land by warranty deed to W. C. Parker and his wife.
- On June 1, 1883, Dismukes conveyed his interest in the land to Kennedy for $10 and Kennedy's assumption of the original notes owed to Smith.
- Kennedy tendered the amount due on the notes and taxes to Smith, but Smith refused to accept the payment.
- By the time of the legal dispute, the land's value had increased from $250 to $2,000.
Procedural Posture:
- Kennedy (appellant) brought a suit in trespass to try title against Parker and his wife (appellees) in a Texas trial court.
- The appellees answered with a plea of not guilty.
- The case was tried by the court without a jury.
- The trial court rendered a judgment in favor of the appellees (Parker and wife).
- Kennedy appealed the trial court's judgment to the appellate court.
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Issue:
Does a vendor in an executory land sale contract have the right to rescind the contract and sell the property to another buyer without providing notice to the original vendee, when the original vendee has made no payments, has not taken possession, and has otherwise demonstrated an intent to abandon the contract?
Opinions:
Majority - Acker, Presiding Judge
Yes. A vendor may rescind an executory land contract without notice where the vendee has totally failed to perform and has abandoned the contract. The court reasoned that the contract between Smith and Dismukes was executory, meaning the superior title to the land remained with Smith until Dismukes fulfilled his payment obligations. The court distinguished between cases of partial performance, where a vendee would be entitled to reasonable notice of a vendor's intent to rescind to protect their equity, and cases of total non-performance. Here, Dismukes's complete failure to pay the purchase price, take possession, or pay taxes, combined with his departure from the state for several years, justified Smith's reasonable belief that Dismukes had abandoned the contract. Therefore, Smith was entitled to rescind without notice and convey the superior title to Parker, leaving Kennedy with no valid claim to the property.
Analysis:
This decision clarifies the rights and remedies of a vendor in an executory land sale contract under Texas law. It establishes a clear demarcation between situations requiring notice of rescission (where there is partial performance) and those that do not (where there is total non-performance and abandonment). The ruling protects vendors from being indefinitely bound to a contract that a vendee has clearly abandoned, allowing them to resell the property and mitigate losses. This precedent reinforces the strength of the vendor's 'superior title' and provides a powerful, non-judicial remedy of rescission in cases of complete default.
