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Click here for the full text of this decision FACTS:Harold Dwayne Kirby Jr. leased commercial property from Probus Properties under a three-year lease. Started in 2001, Kirby had a one-year option to buy the property for $200,000. Under the lease, Kirby was allowed to extend the option for 2002 and 2003 by paying $10,000 on or before Jan. 1 of each year, respectively. Kirby made the option payment as required at the beginning of 2001 and 2002. On Jan. 1, 2003, Kirby wrote a $10,000 personal check from his North Dallas Bank account and dropped it in Probus’ office mail slot. Probus deposited the check at its bank the next day, but on Jan. 6, North Dallas Bank returned the check unpaid for being drawn against uncollected funds. Kirby explained that he deposited funds to cover the check at the wrong bank. When he realized his mistake on Jan. 2, a Friday, he drove to North Dallas Bank but, because of car trouble, he arrived after closing. On Jan. 3, a Friday, he deposited the funds in the North Dallas Bank account, but because of inactivity on that account and the size of the deposit, the bank put a two-day business hold on access to the deposit. When the check deposited by Probus arrived at North Dallas Bank to be honored on Jan. 6, a Monday, the hold was still in place and the check was returned as unpaid. Probus notified Kirby that the option had expired due to non-payment of fee. Kirby sued for breach of contract, specific performance of the purchase option and a declaratory judgment. He argued he performed the condition precedent for the option by placing the $10,000 check in Probus’ mail slot. Alternatively, he said the equities should favor him. A jury ruled for Kirby, granting him specific performance of the option contract. HOLDING:Reversed and remanded. The court points out that, unless otherwise agreed to, an uncertified check is merely a conditional payment for an obligation. Payment is made absolute when the check is presented and honored. Though the lease Kirby and Probus had did not specify the method of payment, but by tendering a personal check, Kirby essentially suspended his obligation to pay until the check was either paid or dishonored. Once the check was dishonored, it no longer served to suspend the obligation and the time for payment of the extension fee had expired and Kirby failed to meet the condition precedent. The court then reviews whether equity excuses Kirby’s non-performance. Kirby says that Jones v. Gibbs, 130 S.W.2d 265 (1939), excuses his non-performance because it was the result of an honest, justifiable mistake. The court distinguishes Jones, however, in part because the Jones case involved an unusual type of option where the entire purchase price (not mere consideration) was paid before the option was exercised. This case involved a traditional option where Kirby paid certain sums to keep up his right to exercise the option at the end of the term. The court acknowledges the theory of “disproportionate forfeiture” articulated in Jones, but ultimately concludes it does not apply here, where Kirby did not pay the full purchase price prior to his exercise of the option. Finally, the court confirms that Kirby was not entitled to attorneys’ fees but that Probus is. OPINION:Jim Moseley, J.; Whittington, Moseley and Lang-Miers, J.J.

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