Ide v. Leiser

10 Mont. 5

• Court: Montana Supreme Court
• Decided: July 15, 1890
• Status: Published

Opinion

De Witt, J.

For convenience of terms we will designate the original document pleaded as the first instrument, and the option therein as the first option, and the indorsement extending the time as the second instrument and option. We will not discuss the validity of the first instrument as a foundation for an action for specific performance. We will assume, for the purpose of this decision, that it is good. The option assumed to be granted therein was not exercised within the time limited, and expired October 4th. The consideration for this option was one dollar; whether paid by Ide to Leiser, or still a debt owing from Ide to Leiser, is immaterial. That consideration was exhausted by the expiration of the option on October 4th. Ide paid his money, the one dollar, and received his goods, the option. Leiser took the one dollar, and delivered a consideration therefor, viz., the option. The transaction was complete, and the terms performed by each party to the agreement.

We come to the second instrument and option. No consideration is named therein, specifically or by reference. The consideration for the first option cannot do service for the second. That consideration was functus officio in the first instrument. A consideration determined by the parties to be the consideration for the sale of one article on one day, and so declared in writing, cannot, in the face of such declaration, be construed by the court as a consideration for the sale of another article on another day. The first ten days’ option was a thing of value, and paid for as such. The second was another separate valuable article. Was there any consideration for its sale?

We believe some definitions and distinctions will aid this discussion. There may be first, a sale of lands; second, an agreement to sell land; and third, what is popularly called an option. The first is the actual transfer of title from grantor to grantee, by appropriate instrument of conveyance. The second is a contract to be performed in the future, and, if fulfilled, results in a sale. It is a preliminary to a sale,'and is not the sale. Breaches, rescission, or release may occur, by which the contemplated sale never takes place. The third, an option, originally, is neither a sale, nor an agreement to sell. It is simply a contract, by which the owner of property (real estate being the species we are now discussing) agrees with another person that he shall have the right to buy his property, at a fixed price, within a time certain. He does not sell his land; he does not then agree to sell it; but he does then sell something, viz., the right or privilege to buy at the election, or option, of the other party. The second party gets in prcesenti, not lands, or an agreement that he shall have lands, but he does get something of value, that is the right to call for and receive lands if he elects. The owner parts with his right to sell his lands (except to the second party) for a limited period. The second party receives this right, or rather, from his point of view he receives the right to elect to buy. That which the second party receives is of value, and in times of rapid inflations of prices, perhaps of great value. A contract must be supported by a consideration, whether it be the actual sale of lands, an agreement to sell lands, or the actual sale of the right to demand the conveyance of lands. A present conveyance of lands is an executed contract. An agreement to sell is an executory contract. The sale of an option is an executed contract. That is to say, the lands are not sold. The contract is not executed as to them, but the option is as completely sold and transferred in presentí as a piece of personal property instantly delivered on payment of the price. Now this option, this article of value and of commerce, must have a consideration to support its sale. As it is distinct from a sale of lands, or an agreement to sell lands, so its consideration must be distinct; although if a sale of the lands afterwards follows the option, the consideration for the option may be agreed to be applied, and often is as a part payment on the price of the lands. But there must be some consideration upon which the finger may be placed, and of which it may be said, this was given by the proposed vendee to the proposed vendor of the lands, as the price for the option, or privilege to purchase. We have been led into this endeavor to make clear our views of these distinctions, because, in the argument, counsel did not seem to give them as much weight, as they seem to us to demand. We refer to the following authorities: Gordon v. Darnell, 5 Colo. 302; Bradford v. Foster, 87 Tenn. 4; Boston & M. R. R. Co. v. Bartlett, 3 Cush. 224; Bean v. Burbank, 16 Me. 458; 33 Am. Dec. 681; De Rutte v. Muldrow, 16 Cal. 505; Johnston v. Trippe, 33 Fed. Rep. 530; Thompson v. Dill, 30 Ala. 444; Mers v. Franklin Ins. Co. 68 Mo. 127; Thorne v. Deas, 4 Johns. 84; Burnet v. Bisco, 4 Johns. 235; Lees v. Whitcomb, 5 Bing. 34; Bishop on Contracts, §§ 77, 78; McDonald v. Bewick, 51 Mich. 79; Schroeder v. Gemeinder, 10 Nev. 355; Woodruff v. Woodruff, 44 N. J. Eq. 855; Perkins v. Hadsell, 50 Ill. 216; Waterman on Specific Performance, § 200.

Examine the two options granted in the case before us. L. sold I. an option for ten days from September 24th, for one dollar. He then gives an option for another ten days from October 3d, for what? For nothing. L. transfers this option, this incorporeal valuable something, for nothing. The transfer of the option was nudum pactum, and void. But the point just discussed, being conceded, appellant still contends that this second instrument, or option, was a continuing offer to sell, at a given price, and was accepted by respondent before retracted, and that such acceptance evidenced by, and accompanied with, the tender of the price and demand for a deed, constitute an agreement to sell land, which may be enforced in equity. We leave behind now our views of options, and consideration therefor, and meet a wholly different proposition.

Heading the two instruments together, we find that on October 3d, L. extended to I. an offer to sell his lands at the price of one thousand dollars. There was no consideration for the offer, and it could have been nullified by L. at any time by withdrawal. But it was accepted by. I., while outstanding, the price tendered, and deed demanded. It must be plain, from the previous discussion, that we do not hold that the offer, when made, or at any moment before acceptance, was a sale of lands, an agreement to sell lands, or an option. But upon acceptance and tender, was not a contract completed? If one person offei’s to another to sell his property for a named price, and while the offer is unretracted, the other accept, tenders the money, and demands the property, that is a sale. The proposition is elementary. The property belongs to the vendee, and the money to the vendor. Such is precisely the situation of the parties herein. L. offered to sell for one thousand dollars. I. accepted, tendered the price, and demanded the property. Every element of a contract was present, parties, subject-matter, consideration, meeting of the minds, and mutuality. And as to the matter of mutuality, we are now beyond the defective option. We have simply an offer at a price, acceptance, payment, or tender, and demand. That this was a valid contract we cannot for a moment doubt.

In discussing a transaction of this nature, in Gordon v. Darnell, 5 Colo. 304, Beck, C. J., in a clear opinion, saysi “Its legal effect is that of a continuing offer to sell, which is capable of being converted into a valid contract by a tender of the purchase money, or performance of its conditions, whatever they may be, within the time stated, and before the seller withdraws the offer to sell.” . Lurton, J., in Bradford v. Foster, 87 Tenn. 8, says: “Before acceptance, such an agreement can be regarded only as an offer in writing to sell upon specified terms the lands referred to. Such an offer if based upon no consider-at ion, could be withdrawn by the seller at any time before •acceptance. It is the acceptance while outstanding, which gives an option not given upon a consideration vitality.” In Boston & M. R. R. Co. v. Bartlett, 3 Cush. 227, we find the following by Fletcher, J.: “ In the present case, though the writing signed by the defendants was but an offer, and an offer that might be revoked, yet while it remained in force, and unrevoked, it was a continuing offer during the time limited for acceptance; and, during the whole of that time, it was an offer every instant, but as soon as it was accepted, it ceased to be an offer merely, and then ripened into a contract.” This case readily distinguishes Bean v. Burbank, 16 Me. 458, which may seem to hold a contrary doctrine. It also repudiates Cooke v. Oxley, 3 Term Rep. 653, and claims that the English case is said to be inaccurately reported, and, in any event, entirely disregarded in the later decisions. (See, also, De Rutte v. Muldrow, 16 Cal. 505; Thompson v. Dill, 30 Ala. 444; Goodpaster v. Porter, 11 Iowa, 161; Vassault v. Edwards, 43 Cal. 458; Black v. Woodrow, 39 Md. 194; Bishop on Contracts, §§ 77, 78; Woodruff v. Woodruff, 44 N. J. Eq. 355; Shirley v. Shirley, 7 Blackf. 451; Perkins v. Hadsell, 50 Ill. 216; Lowber v. Connit, 36 Wis. 176; Pomeroy on Contracts, § 169, n. 1.) We cannot but conclude that the transaction in the case at bar constituted a valid contract, upon which specific performance may be had.

But, conceding that the contract is per se good, it is urged that it is void under the Statute of Frauds. The statute is as follows: “ Every contract for the leasing for a longer term than one year, or for the sale of any lands, or interest in lands, shall be void, unless the contract, or some note or memorandum thereof expressing the consideration, be in writing, and be subscribed by the party by whom the lease or sale is to be made.” (Comp. Stats. § 210, p. 652.)

It is argued that the contract could not be enforced against the plaintiff, if he were the party sought to be charged, as he has not signed the instrument in writing, and that if it cannot be invoked against the plaintiff, by reason of the Statute of Frauds, it also cannot be urged against the defendant. But our statute does not require the writing to be signed by the party sought to be charged, but only by the party by whom the sale is to be made. We have these facts: the party by whom the sale was to be made, L., signed the memorandum expressing the consideration; the buyer accepted. Not only was the contract complete, but the statute was satisfied. (Bean v. Burbank, 16 Me. 458; 33 Am. Dec. 681; Vassault v. Edwards, 43 Cal. 458; Shirley v. Shirley, 7 Blackf. 452; Champlin v. Parish, 11 Paige, 405; Clason v. Bailey, 14 Johns. 484; Lowber v. Connit, 36 Wis. 176.) We believe that this discussion leaves it clear that these views are not in conflict with Ryan v. Dunphy, 4 Mont. 342; Mayger v. Cruse, 5 Mont. 485; Ducie v. Ford, 8 Mont. 233. The demurrer on the point just investigated should have been overruled.

On behalf of the demurrer, it is again argued that the complaint is defective, in that it does not state that the plaintiff has no complete and adequate remedy at law in damages. It is undoubtedly the general rule that “ in suits for specific performance, the party complaining must not only show the acts relied on" as part performance, his willingness and ability to perform his part of the contract, but it must also appear that his position is such that an action at law for damages will not afford him an adequate relief.” (Ducie v. Ford, 8 Mont. 240.) But actions for the conveyance of real estate are an exception, or perhaps not an exception, but rather the presumption exists, from the nature of the case, that damages are not adequate relief. In Baumann v. Pinckney, 118 N. Y. 604, the court says (Vann, J.): “Thus it happened that the court directed that the complaint should be dismissed .... because the plaintiff had an adequate remedy at law. According to a long and unbroken line of decisions, the latter ground is clearly untenable. As early as 1835 it was said by Chancellor Walworth that a suit in equity against the vendee to compel a specific performance of a contract to purchase land had always been sustained as a part of the appropriate and acknowledged jurisdiction of a court of equity, although the vendor has in most cases another remedy, by an action at law upon the agreement to purchase;.... the right of the vendee to maintain specific performance is too well settled to require further discussion.” (And see cases there cited. See, also, Pomeroy’s Equity Jurisprudence, §§ 221, 1402; Story on Equity Jurisprudence, § 746.) We are of opinion that the demurrer on this ground also should have been overruled. "We are again asked to sustain the demurrer, for the reason that the complaint does not allege that it is within the power of the defendant to make the conveyance, in pursuance to a decree of the court so requiring him; that is to say, the complaint should allege that the defendant was still at the time of filing the complaint, the owner of the land. The incapacity of the defendant to perform, to be an excuse, must exist at the time of the hearing. If he did not possess the subject-matter at the time of making the contract, this does not constitute legal impossibility, if he acquired it subsequently, at or before the hearing. (Pomeroy’s Equity Jurisprudence, § 1405, n. 1, cases cited.) We do not now know what may be made to appear on the hearing. That is not reached. We examine now only a demurrer to the complaint, which confesses all the facts alleged in the complaint. The complaint alleges that the defendant was the owner on September 24th, when he executed the writing. He has never withdrawn his offer to sell. The offer ripened into a contract October 11th. The complaint was filed the same day. If a person having executed a contract for the sale of lands, knowingly executes any other agreement to sell or dispose of the same lands to another person, he is guilty of a felony. (§ 200, Crim. Laws.) Must the complaint allege that defendant has not committed a felony? If defendant has parted with the land ad interim, it is a fact peculiarly within his own knowledge; knowledge which it may well be impossible to come to the plaintiff.

“It must be that in an action of this kind the complaint must make a ease in which the defendant is at least able to perform.” (Joseph v. Holt, 37 Cal. 256.) Elliot, C. J., in Cottrell v. Cottrell, 81 Ind. 88, says: “The principal objection urged against it (the complaint) is that the first paragraph does not allege that the ancestor of the appellants had any title to the property which it is alleged he agreed to convey, and is therefore bad. There are facts stated which show title in the decedent. .... If the appellee is content with such title as a conveyance from the heirs of the deceased vendor will convey, the appellants should not be allowed to prevent him from securing it. The ancestor had bargained away all the title he had, and whether that was much or little, the appellee’s contract vested in him the right to have that for which he had contracted. It cannot be of importance to appellants whether that title was perfect or imperfect, for the appellee has a right to it, whatever its character may be. If he is satisfied they cannot complain, for it never descended to them, but had vested in the appellee, prior to the death of their ancestor.”

In the case before us the plaintiff could preserve the status in quo, against innocent purchasers from the defendant by filing a notice of lis pendens. It is not necessary to say what might be our views upon the question of the inability of the defendant to perform on the appearance of further facts at the hearing. We are of the opinion under all the circumstances of this case that the complaint shows a prima fade case as to this point, and that the demurrer in this behalf should be overruled. These views seem to us to be the exercise of a sound discretion. (Schroeder v. Gemeinder, 10 Nev. 369; Pomeroy’s Equity Jurisprudence, §§ 860, 1404.)

The judgment of the District Court is reversed, and the cause is remanded, with directions to that court to overrule the demurrer.

Blake, C. J., and Harwood, J., concur.