Purchase and Sales Agreement: Interpretation

摘要

Annette McCarty (McCarty) agrees to sell to Elton Montgomery (Montgomery) an undivided one-half interest in a tract of land in Texas. The parties utilize a modified form contract to document the agreement and Montgomery deposits earnest money with an abstract company. The contract requires McCarty to furnish Montgomery with a title policy and while preparing its commitment the abstract company discovers that the property is burdened by a federal tax lien and it does not issue a title commitment. McCarty refuses to pay the lien and offers to return the escrow money, but Montgomery insists upon proceeding with the closing and demands that the tax lien be discharged. McCarty subsequently executes an oil and gas lease with a third party that covers the same property she earlier had contracted to sell to Montgomery. Clinton T. Montgomery, as managing trustee of Trimont Irrevocable Trusts (Trimont), which is assigned Montgomery's interest in the contract, sues McCarty seeking specific performance.