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Johnston v. Curtis

Arkansas Court of Appeals
70 Ark. App. 195, 16 S.W.3d 283 (2000)


On October 9, 1997, Glen and Deanna Curtis entered an agreement to sell their home in Cabot to Gerald and Bebe Dare Johnston for $114,000. The transaction was subject to the Johnstons’ ability to procure a home loan in the amount of $102,600, which constituted 90 percent of the purchase price. According to Deanna Curtis, the Curtises purchased a home in Searcy upon learning that the Johnstons had been pre-approved for their loan. However, the Johnstons were ultimately denied the loan because the house was only appraised for $110,000. The parties then orally agreed to lower the price to $110,000. Deanna Curtis states that the Curtises allowed the Johnstons to take possession of the home before closing, but only after the Johnstons gave them a $500 check to hold as a demonstration of good faith. On November 17, the Curtises were informed that the Johnstons refused to close. The Curtises told the Johnstons to vacate and listed the home with a realtor. In March 1998, the Curtises sold the home for $100,000. After the realtor’s commission and closing costs were subtracted, the Curtises received $94,000. Gerald Johnston testified that the parties agreed the Johnstons would purchase the home only if they received an acceptable rate of interest and acceptable closing costs. Gerald Johnston did not learn of the final interest rate until November 17, and found it to be too high. He also testified that he did not learn until trial that his wife’s name would not be on the title of the house, and that he would not have agreed to purchase the home on such a condition. He also stated that the $500 check was not earnest money, but was provided in case the Johnstons caused damage to the home. The trial court ruled that the parties orally modified the original agreement to reduce the purchase price; that the modification was subject to all other terms of the original contract; that the oral modification was not within the statute of frauds; and that the Johnstons breached the contract by refusing to close. The trial court granted damages to the Curtises in the amount of $10,000.

Rule of Law


Holding and Reasoning (Bird, J.)

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