Guyer v. Warren

51 N.E. 580, 175 Ill. 328
CourtIllinois Supreme Court
DecidedOctober 24, 1898
StatusPublished
Cited by49 cases

This text of 51 N.E. 580 (Guyer v. Warren) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Guyer v. Warren, 51 N.E. 580, 175 Ill. 328 (Ill. 1898).

Opinion

Mr. Justice Magruder

delivered the opinion of the court:

The first objection made to the bill is, that the contract, which it seeks to specifically perform, lacks mutuality of obligation. The contention is that, by the terms of the contract, there is no obligation on the part of Bemis, or his assignee, the appellant, to buy the land, and that Warren and his wife cannot compel Bemis or his assignee to purchase the land. In other words, it is claimed that Bemis did not purchase the land or any interest therein, but merely secured the rig'ht to an option to purchase in the future.

It was formerly held with some degree of strictness that the want of mutuality would render a contract for the sale of land incapable of specific enforcement. But the doctrine of the earlier cases upon this subject has been considerably modified. There are well established exceptions to the doctrine of mutuality. It is not necessary here to specify all these exceptions. It is sufficient to say, that, under the later decisions of the courts, optional agreements to convey without any corresponding obligation or covenant to purchase will be specifically enforced in equity, if made upon sufficient and valuable consideration. “A written agreement to convey land at the option of the proposed vendee within a given time and at a certain price, if made upon a sufficient consideration with full knowledge on the part of the person extending the option that he is bound and the other is not, is such a contract as, though lacking mutuality of remedy, will be enforced in equity at the instance of the proposed vendee. Where the party holding an option signifies his acceptance within the time limited, and upon the terms stated, -the obligation of the contract becomes mutual and capable of enforcement at the instance of either party.” (Johnston v. Trippe, 33 Fed. Rep. 530; Watts v. Kellar, 56 id. 1; Waterman v. Waterman, 27 id. 827; Willard v. Tayloe, 8 Wall. 557; Brown v. Slee, 103 U. S. 828; Estes v. Furlong, 59 Ill. 298; Perkins v. Hadsell, 50 id. 216; Hayes v. O’Brien, 149 id. 403; Smith & Fleek’s Appeal, 69 Pa. St. 474; Houghwout v. Boisaubin, 18 N. J. Eq. 318; Hawralty v. Warren, 18 id. 124; Schroeder v. Franklin, 10 Nev. 255).

In Estes v. Furlong, supra, it was held, that a unilateral contract, as an option to purchase, will not be regarded as invalid; and it was there said: “A party who has not signed an agreement relating to land may enforce it against one who has signed it, although he could not himself have been compelled to execute it.” A unilateral contract of this kind, in which one party confers an option upon the other, is in reality a conditional agreement; and, upon the happening of the condition, that is to say, when the option given is declared or the election provided for is made, the agreement becomes absolute and the obligations of th.e parties become mutual. (Pomeroy on Contracts, sec. 169).

We are of the opinion, that the case at bar does not come within the class - of cases where lack of mutuality will prevent the enforcement of the contract. The rule requiring mutuality has no application to an option contract like the one here under consideration. There is here an optional sale upon a fair consideration. The consideration named in the written agreement is one dollar. As the parties agree to sell an option to buy for the sum of one dollar, there is no reason why such an express consideration is not an adequate one. (Waterman v. Waterman, supra). Again, when the option was extended to May 1, 1896, $50.00 was paid in cash to the appellees for such extension, and was received by the appellees. By the terms of the contract these $50.00 became a part of the purchase money when the vendee in the contract exercised his election to buy. When the notice was given of such election on April 30, 1896, the instrument became eo instanti a contract of purchase mutually binding on both parties. The contract was also definite in its terms as to the amount to be paid for the land. In case of an election to purchase under the option mentioned in the contract, Bemis on his assigns were to pay for the 83.31 acres $100.00 per acre, one-fourth in cash upon the delivery of the deed, and the balance on or before five years after the date of the deed, such balance being" secured by mortgage on the property. We see no reason why the sum of $50.00 was not an ample consideration for the right of the option to purchase the farm at the agreed price per acre. “Where one holding a buyer’s option makes his election to purchase and tenders the amount agreed to according" to the terms of the contract, it is the duty of the seller to accept the price and execute a deed to thepurchaser for the property. * * * Such contracts are perfectly valid and it is now well settled that a court of equity may decree a specific performance of them. ” (Watts v. Kellar, supra). The covenant in the present contract, giving an option to purchase, was in the nature of a continuing offer to sell. It was made under seal, and hence must be regarded as having been made upon a sufficient consideration. When the offer to sell was accepted by the appellant by his notice to the appellees, the contract of sale between the parties was completed; and the appellees were not at liberty to recede from it. Our conclusion is, that the bill was not demurrable by reason of the optional feature of the contract sought to be enforced.

The next ground, upon which the bill is claimed to be demurrable is based upon the following provision in the contract, to-wit: “On receipt of seven days’ notice in writing at any time before the expiration of this option of the election of said Bemis to complete said purchase, the undersigned agree to execute a warranty deed for said land, and convey thereby a clear title for said land, free from all encumbrances except those above stated.” Counsel for appellees claim, that the last of the seven days’ notice should have expired on April 30, 1896, while counsel for appellant contend, that the notice could be given at any time before the expiration of the year, or before the expiration of the last day of the year, which the agreement had to run; this was all day of May 1, 1896. It is conceded, that the notice of the election to complete the purchase was not given until April 30, 1896. In interpreting contracts courts will look to the entire instrument, and give a meaning to each clause of the contract. Such construction will be adopted, if possible, as will render the whole contract operative. (Hayes v. O'Brien, supra). Here, Bemis, his representatives or assigns had until May 1, 1895, to exercise their election as to the purchase of the property. When the sum of $50.00 was paid, the option was extended until May 1, 1896. After the extension, Bemis and his representatives or assigns had the whole period up to May 1, 1896, for the exercise of the election provided for. The clause in question must be construed with reference to this provision of the contract, which extended the time for the full period, expiring on May 1, 1896. If the vendee in the contract was, obliged to give the notice of his election seven days before May 1, 1896, then he would not have the full period, expiring on May 1, 1896, for the exercise of his option, but would have a period seven days less than that provided for in the earlier part of the contract. Such a construction as this would make the separate provisions of the contract contradictory of each other.

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Bluebook (online)
51 N.E. 580, 175 Ill. 328, Counsel Stack Legal Research, https://law.counselstack.com/opinion/guyer-v-warren-ill-1898.