Breen v. Mayne

118 N.W. 441, 141 Iowa 399

• Court: Supreme Court of Iowa
• Decided: November 24, 1908
• Status: Published

Opinion

Deemer, J. —

Defendants were tbe owners of an undivided one-balf of tbe property in controversy, and in October of tbe year 1906 plaintiff, through bis agent Knapp, attempted to procure from J.’ J. Mayne an option upon this property. Knapp was referred to one Mc-Nider as being an agent to sell the land, and be so informed his principal. Plaintiff then went to McNider, and after some negotiations tbe following option was obtained by bim:

For and in consideration of one hundred seventeen dollars in hand paid, and other good and valuable considerations rendered by E. J. Breen of Fort Dodge, Iowa, the receipt of which is hereby acknowledged, I, L. A. Mayne, of Cerro Gordo County, State of Iowa, agree to sell to said E. J. Breen, at his option, at any time on or before October 17, 1906, the following described premises situated in the county of Cerro Gordo and State of Iowa (here follows a description of the property), containing 117 2%oo acres at the agreed price of one hundred and fifty dollars per acre and upon tbe terms as follows: Seventeen thousand five hundred and fifty dollars on delivery of deed. All of the deferred payments to draw interest at the rate ■ — ■— percent from the date of deed, payable annually. And said L. A. Mayne expressly agrees that in case that E. J". ’ Breen sells said herein above described land at any time within the term of his contract, that he will at the request of said E. J. Breen, execute and deliver to the purchaser, that may be named by said E. J. Breen, a good and sufficient warranty deed, with full covenants, conveying and assuring the fee simple of said premises, together with an abstract showing perfect title in giver of deed, and agrees to accept the purchaser’s notes for the deferred payments, said notes being in amount, and time of payment as above set forth, and secured by ■ — —■ mortgage on above described premises. In witness of which said parties have hereto caused these presents in duplicate to be executed on this 17th day of April A. D., 1906. J. J. Mayne. L. A. Mayne. Witness, C. II. McNider.

The payment under this contract was made directly to McNider. Plaintiff then lived at Ft. Dodge, and was obtaining options upon this and other land for himself and others, thinking that they might prove profitable to a cement plant which they were then constructing in Mason City, Iowa. Soon after securing the option, plaintiff and his associates set men to work drilling upon the land, and it is contended that the results were satisfactory, that defendants were notified of that fact, and informed that he, Breen, would take the land under the option. There is no conflict in the testimony regarding some of the matters; but upon the determinative issues, or rather upon the inferences to be drawn from the testimony, there are serious disputes both of fact and law. The option was obtained in April of the year 1906, and it expired on October 17th of the same year. On September 20th, plaintiff wrote one of the defendants asking for an abstract to the land, saying that he would like a little time before the option expired to examine it and to get matters fixed up. Mayne did not answer in person, but on October 3d, Mc-Nider wrote, sending an abstract and saying, “We are ready to furnish deed.” October 4th Breen wrote McNider acknowledging the receipt of the abstract, and saying he would have his attorneys examine it in the near future. On October 15tk Breen returned tbe abstracts to McNider by mail; calling bis attention to tbe defects pointed out by bis attorney, and saying, “I take it that these matters can be fixed up.” Breen went to Mason City on tbe 16tb, going to tbe abstractor’s office to see if tbe defects pointed out in tbe abstract bad been corrected, and learned they bad not been. He then went to tbe bank where McNider bad bis office, and found that be (McNider) bad gone away (to St. Louis as reported), and that be- would not be back for a few days. He also learned that bis letter to McNider- inclosing tbe abstracts bad not been opened. He then, it is claimed, drove to tbe Mayne borne and found no one there. ■ He endeavored to find one of the Maynes in Mason City, but was unable to do so. Returning to bis borne without seeing either McNider or tbe defendants, he again came to Mason City on tbe 19th or 20th day of October, and called upon McNider. He (McNider) returned tbe abstracts to Breen, and Breen then went in search of tbe Maynes. He finally found them, and Mr. Mayne, so it is claimed, pursuant to bis previous request, promised to go to Mason City to try to get tbe title adjusted and tbe matter of tbe sale fixed up. Whatever tbe truth about this, Mayne did not' come to Mason City to see plaintiff, but according to bis, plaintiff’s, testimony, he, Mayne, avoided him. It appears without dispute that after midnight on October 17th tbe Maynes gave another option upon tbe land to some other parties representing a rival cement plant, in which tbe optionees agreed to bold tbe Maynes harmless for refusing to carry out tbe one theretofore given the plaintiff. It seems that' after tbe option was given plaintiff, tbe Maynes indicated a desire to reserve a part of tbe lands covered by their option, and that they continued thus to talk down to about October 20th. McNider returned to Mason City on October 19th, and on October 20th be wrote plaintiff acknowledging tbe receipt of tbe abstracts and saying that he would have the corrections made as indicated in Breen’s letter.

In a general way the matters so far recited are undisputed, save defendants say that McNider was not at any time their agent in the matter, and that what he did in the way of addressing letters was simply an accommodation. The chief dispute arises over a claim on plaintiff’s part that he orally exercised his option within the time fixed, and that the option contract then and thereupon became a contract of sale. This is denied by defendants, and they further say that as a matter of .law there could be no binding acceptance except by a payment or tender of the purchase price within the period fixed by the option. The first is, of course, a question of fact, and the latter of law, or of mixed law and fact. We shall first take up the legal proposition, for if defendants’ contention in this respect be sustained the decree is correct, for the reason that it is not contended that plaintiff paid or offered to pay the purchase price before October 17th, the time when, by the broadest construction, the option expired.

1. Options: manner of exercise: how determined. The only fixed rule regarding the manner of the exercise of an option under a contract granting it, is to discover from the language of the instrument, construed in the light of competent parol testimony, the inteiLt of the parties with, reference there-†0< may ]je that under the terms of a given option the only proper and binding method of election or acceptance is by the payment or a tender of the purchase price. On the other hand, there are many cases where the option may be exercised in parol or by any other method indicating ah election to t.ake the land — the payment of the purchase price and the making of the deed being subsequent matters in performance of a binding contract. In the one ease, there is an election to sell, upon payment of the purchase price, which is a condition precedent to the foundation of the contract; and in the other there is an election to take tbe land upop tbe terms proposed, payment of tbe purchase price being a condition subsequent, or rather tbe performance of an executory contract theretofore entered into.

2. Same: acceptance. It is important in such cases to distinguish that which pertains to the performance of a contract from that which pertains to its making. To make any sort of a contract, there must be a meeting of minds upon a given subject. An offer without acceptance is not a contract, and as a rule the acceptance to be binding must be in accord with the terms of the offer, and not in some other manner. In other words, the party making the offer may prescribe the mode of acceptance, and to constitute a binding contract this method must be followed. The distinctions here noted are pointed out with great clearness in Watson v. Coast, 35 W. Va. 463 (14 S. E. 249). See, also, Pomeroy on Contracts, section 387; Minneapolis Co. v. Cox, 16 Iowa, 306; Bundy v. Dare, 62 Iowa, 295; Lockman v. Anderson, 116 Iowa, 236: Myers v. Stone, 128 Iowa, 10; Page on Contracts, sections 48 and 49.

3. Option contract for SALE OF LAND: exercise of option. Now, going to the option in this case, it appears that defendants agreed to sell to plaintiff at his option any time on or before October 11, 1906, one hundred and seventeen acres of land at an agreed price, and upon the following terms, “$11,550.00 on i i í * t~\ í» l delivery of the deed. Defendants also agreed that if Breen sold the land at any time within the option they would make deed to the purchaser and would make abstract, showing perfect title. They also agreed, to accept the purchaser’s notes for the deferred payments, and to take a mortgage securing the same. It will be noted that the payment of the purchase price was to be made on delivery of the deed; that Breen had authority to sell the land at any time covered by the option, and that defendants agreed to make deed to the purchaser and to make abstract showing perfect title. The agreement was to sell the land for $17,550 to plaintiff at his option exercised at any time before October 17th, payment to be made on delivery of the deed with abstract showing perfect title, and the deed was to run to Breen or to any person to whom he might sell. We are constrained to hold that payment of the purchase price was not essential to the completion of the contract. Plaintiff might make his election in any lawful method before the expiration of the time limit, and would be compelled in that event to make tender of the purchase price within a reasonable time and demand a deed either to himself ,, or to the party to whom he had sold. It was recognized that plaintiff had something to sell or transfer before making-payment for the land; and the delivery of the deed and the payment of the purchase price were simply dependent covenants which did not go to the formation of the contract but to its performance. These views find support in Gradle v. Warner, 140 Ill. 123 (29 N. E. 1118); Gibson v. Heating Co., 128 Ind. 240 (27 N. E. 612, 12 L. R. A. 502); Bogle v. Jarvis, 58 Kan. 76 (48 Pac. 558); Howe v. Watson, 179 Mass. 30 (60 N. E. 415); Mason v. Decker, 72 N. Y. 595 (28 Am. Rep. 190); Ellsworth v. R. R., 31 Minn. 543 (18 N. W. 822); Myers v. Stone, 128 Iowa, 10; Clark v. Gordon, 35 W. Va. 735 (14 S. E. 255); Peterson v. Chase, 115 Wis. 239 (91 N. W. 687); Boston Co. v. Rose, 194 Mass. 142 (80 N. E. 498); Primm v. Wise & Stern, 126 Iowa, 528; Webb v. Hancher, 127 Iowa, 269.

4. Same: statute of fauds. T/ith the law question settled, we go now to the controlling question of fact, Was there an acceptance of the option by the plaintiff, or such an.election on his part as bound him to perform the contract? In this connection we may say that the statute of frauds cuts no figure. Plaintiff is not the party sought to be charged, and to answer the requirements of that statute it is only necessary that the contract be signed by the party to be charged, etc. Of course, to make a valid and enforceable contract of an option there must be an unqualified acceptance thereof and a full performance of all conditions precedent; but the contract when completed need not be in writing unless required by statute. Perkins v. Hadsell, 50 Ill. 216; Yerkes v. Richards, 153 Pa. 646 (26 Atl. 221, 34 Am. St. Rep. 721).

5. Same: acceptance of option: evidence. This brings us to the disputed fact question in the case: Was there an unqualified election by plaintiff communicated to defendant to accept the option, and such a meeting of the minds as to make a valid and enforceable obligation against the defendants ? A reading of the correspondence which passed between the parties, and to which we have already referred, clearly shows that there is nothing in these letters which constitutes an unqualified election to accept the option and become bound to pay the purchase' price within the time limited. But appellant contends that there is testimony of an oral acceptance communicated to the defendant within the time limited by the option. This acceptance could only be made by plaintiff in person, or by someone having authority from him to do so. There is testimony from three or four people, who did not represent plaintiff in thq matter of the land deal, to the effect that they told defendants they thought Breen would take the land. But the only real testimony as to an acceptance by plaintiff is the following: Mr. Mayne was anxious to know whether plaintiff intended to exercise his option, and he requested one Hubbard to ask him, Breen, what he intended to do. In response Breen said: “I have been a good fellow so far, and I guess I will have to take the land.” This was said in defendant’s presence, but not to him, and plaintiff’s conduct thereafter shows that he did not intend this to be an election on his part to take the land, but rather an expression of his opinion as to what be would do in the future. It was not regarded by defendants as an election to take the land. The correspondence between the parties after that date indicates that they still regard the matter as an unaccepted offer. It will not do to establish a rule in these cases which will allow an optionee to “play fast and loose” as interest may dictate. The acceptance of the option, or -the election when made, must be unqualified and unequivocal, must be communicated to the party giving the option in no uncertain manner, and be such that after it is exercised it becomes binding upon the party exercising it. That is to say, it must assume the form of a contract proper as distinguished from a mere .option or offer. We do not think the testimony in this case shows such an election to take the land or to accept defendant’s offer as made a binding contract. -Moreover, we may say that we do not think defendants did anything to prevent plaintiff from indicating his election or acceptance of the offer of sale. Plaintiff attempts to make such a showing, but this is negatived by defendants’ testimony. The letter written by McNider after his return from St. Louis is not binding on defendants, and, even if it were, it would amount to nothing more than a waiver of the time for the payment of the purchase price.

We have gone over the record with care, and find no reason for disturbing the decree. It is therefore affirmed.

SheewiN, J., taking no part.