Pearson v. Millard

150 N.C. 303

Opinion

Connor, J.,

after Stating the case: Plaintiffs except and assign as error bis Honor’s refusal to submit the issue, “Did defendant offer to comply witb all of the conditions of the written contract mentioned in the pleadings, as alleged in the answer ?” His Honor submitted separate issues directed to the several conditions in the lease, and tbis, we think, was proper. Every controverted question of the fact was settled by the verdict upon the issues submitted. Tbe exception cannot be sustained.

Plaintiffs assign as error the admission of the-assignment by Lasater to defendant." It was certainly relevant and competent. Its admission did not affect its effect upon the rights of the parties, but was necessary to enable the court to pass upon tbat question. We are unable to perceive bow it could prejudice the plaintiffs.

Tbe next -assignment of error is in tbe admission of Mr. Pearson’s letter of 23 February, 1906, to Mr. Whitson. This letter was written from Teheran, Persia, in response to the letter notifying plaintiffs tbat defendant bad accepted tbe option and was ready to make tbe purchase “under its terms.” Mrs. Pearson insists tbat Mr. Pearson was not her agent, and that she was not bound by bis letter. Conceding tbis to be true, we do not see bow the letter affected her rights. Mr. Pearson simply placed his construction upon the option, which, if correct, deprived defendant of any right under it. He insists that the option entitled the’lessees to purchase, provided no one else would give more, and said that he had been offered a larger price. There is no suggestion that the acceptance was not in accordance with its terms, but that, under the terms, defendant had no right to call for a deed. Certainly there is nothing in the letter prejudicial to Mrs. Pearson. There was some evidence that Mr. Pearson was her agent. In any point of view, there is no prejudicial error in his Honor’s ruling. The jury having found that none of the conditions in the lease — payment of rent and for repairs — had been broken, and having further found that Mr. Whitson was the authorized agent of the plaintiff, with power to accept or reject the offer made by defendant, and that he was notified of the acceptance by defendant, and the cash payment of $1,000 ivas tendered within the time fixed in the lease, we are brought to a consideration of the pivotal questions argued by counsel.

The option was simply an offer by plaintiffs to .permit the lessees to purchase upon the terms stated, “on or before the third day of July, 1907.” Until accepted by the lessees, it was a unilateral contract, binding only the lessors. We had occasion to consider the subject in Trogden v. Williams, 144 N. C., 192, and examined the authorities bearing upon the relative rights and duties of the parties to a contract of this character. The option was in this case based upon a sufficient consideration, “When an option is given the lessee to purchase the leased premises, the lease is a sufficient consideration to support the option, and the lessor cannot withdraw -it before' the time in which' to accept it has expired.” Tilton v. Coal Co., 77 Pac. (Utah), 758. “The doctrine of the earlier English and American cases, in which it is held that the want of mutuality of obligations and remedy would render the contract incapable of specific enforcement, has, by the more modern cases, been so modified that optional agreements to convey, without any corresponding obligation or covenant to purchase, will now be specifically enforced in equity, if made upon sufficient and valuable consideration; and so, when the agreement to convey is a part of a lease, or other contract between the parties, for which the agreement to convey forms the true consideration, the want of mutuality will not avoid the contract.” Hayes v. O'Brien, 149 Ill., 403; 23 L. R. A., 555. “Such .a contract is a continuing obligation on the part of the lessor, running with the lease, which the lessee may accept at his option, within the time limited.” Ib. Until accepted, it is an offer of the lessor; but, as said by Mr. Justice Field (Willard v. Tayloe, 8 Wall., 557), by notice of the acceptance “a contract of sale is completed.” The contract becomes bilateral, binding both parties. Trogden v. Williams, supra. It is, of course, 'elementary, and sustained by a uniform current of authorities that, as in any other proposition to sell, the acceptance must be in accordance with the terms of the option, that is, unconditional.' Weaver v. Burr, 31 W. Va., 736; 3 L. R. A., 94; Smelting Co. v. Belden Co., 127 U. S., 379; Kelsey v. Crowther, 162 U. S., 404; Trogden v. Williams, supra.

Was the acceptance by defendant unconditional and in accordance with the terms of the contract? Mr. Whitson said that defendant’s exact words were: “That he wanted to avail himself of the right to purchase under his contract with. Mr. Pearson, and that he was ready to pay me the $1,000 on the purchase price.” Defendant says that he notified Whitson that “he was going to pay-under the option, and wanted Whitson to write for the deed.” The jury finds that the defendant notified Whit-son that “it was his purpose to purchase the projterty under the terms of the contract,” and Mr. Whitson says that he wrote plaintiff, or, rather, Mr. Pearson, of the acceptance; he further says he supposes that Mrs. Pearson was in Persia, with her husband, who was resident Minister at Teheran. There is no suggestion in the testimony that any condition was attached to the acceptance. Excluding Mr. Pearson’s letter as not binding on Mrs. Pearson,' she makes no response whatever to the notice. If we consider the letter as the response of her agent, no suggestion is made that the accej)tance is not in accordance with the terms of the option; but an entirely different reason is assigned for refusing to make the deed, that he has been offered a larger price and is under no obligation, by the terms of the option, to convey. Eejecting this construction, what duty devolved upon the plaintiffs upon receipt of the notice of accept- anee of tbe option? Clearly, to accept tbe $1,000 casb and prepare a deed to Millard & Lasater, and tender it; whereupon it was tbeir duty to prepare and tender notes and a trust deed' for tbe balance of tbe purchase money. At tbe time of tbe notice of acceptance by defendant nothing was said about any assignment by Lasater. As is said by Mr. Justice Field, in Willard v. Tayloe, 8 Wall., 557 (75 U. S.), “Until tbe purchase money was accepted, there was no occasion to prepare any instrujn&nt for execution. So long as that was refused, tbe preparation of a trust deed was a work of supererogation. Besides, tbe execution of tbe trust deed by tbe complainant was to be simultaneous with, tbe execution of tbe conveyance by tbe defendant. Tbe two were to be concurrent acts; and if tbe complainant was to prepare one of them, tbe defendant was to prepare tbe other, and it is not pretended that tbe defendant acted in tbe matter at all.” In that case tbe bill was filed by tbe purchaser. Here tbe purchaser, defendant, is asserting bis right by way of equitable counterclaim. Tbe plaintiffs, either by silence or Mr. Pearson’s letter, refused to comply with tbeir duty under tbe contract, and, of course, defendant could take no further step in the transaction. If plaintiffs bad prepared and tendered, a deed to Millard & Lasater and demanded tbeir notes and trust deed pursuant to tbe terms of tbe contract, it may well be that Lasater would have joined Millard in tbeir execution, or Millard may have •paid tbe entire purchase price in cash. It would be neither just nor equitable to permit plaintiffs to repudiate tbeir obligations, absolutely, at tbe inception of tbe transaction, and thereby prevent tbe defendant from complying further with bis offer to accept tbe terms of tbe contract and thereby destroy bis rights. There is nothing in tbe evidence to justify plaintiffs’ refusal to accept" tbe casb and tender tbe deed, “under the terms of tbe contract,” as made by them. But tbe learned counsel insists that tbe acceptance by defendant was for himself alone, and not for Millard & Lasater, and that( thus construed, plaintiffs were under no obligation to convey to him and accept bis notes and trust deed; that they contracted with both partners and were entitled to demand strict performance of tbe contract. It is undoubtedly true, as contended by plaintiffs, that when a person enters into a contract with another, involving personal services or personal confidence, tbe contract cannot be assigned, so as to bring one of tbe parties into contract relations witb a stranger. “Contracts involving tbe relation of personal confidence, and such that tbe party whose agreement conferred those rights must have intended them to be exercised only by him in whom be actually confided, are not transferable.” 4 Oyc., 22. It seems to be well settled that “when a lease contains an agreement that tbe lessee may purchase tbe land during tbe continuance of tbe lease, tbe assignment of tbe lease conveys to and vests in tbe assignee tbe same right.” Menger v. Ward, 30 S. W. (Tex.), 853. It would seem, therefore, that by Lasater’s assignment tbe defendant was entitled to tbe. benefit of his interest in tbe option — that is, by complying with its terms, to call for tbe conveyance.

The only element of personal confidence involved in tbe option was that both Millard and Lasater were to execute their notes for tbe balance of tbe purchase money. As we have seen, tbe acceptance by defendant was “under tbe terms of the' option.” There was no suggestion that Lasater was not to sign the notes. In Menger v. Ward, 30 S. W., 853, relied upon by plaintiffs, tbe.option, superadded to tbe lease, gave tbe right to the lessee to purchase tbe property by paying a part of tbe purchase price cash and giving bis notes for balance. Tbe lessee mortgaged bis term. One of tbe questions involved in tbe litigation was whether tbe mortgage of tbe leasehold property carried tbe option. Tbe court held that, as credit was given for a part of tbe purchase price, tbe option'did not pass by tbe mortgage. This decision was based upon tbe principle that tbe lessor could not* be compelled to accept a stranger as bis debtor, and was unquestionably corr'eet. In the case before us no new party is attempted to-be brought into tbe contract, but one of them “drops out” by assigning bis interest to bis copartner. Tbe assignment of bis interest, of course, made no change in tbe right of tbe plaintiffs to have tbe contract accepted and executed according to its terms, but they made no such claim or demand. There is no evidence showing or tending to show that Lasater would not, as in good faith be should have done to make bis assignment effectual, have joined in tbe notes and trust deed. Tbe acceptance having been made in good faith, according to tbe terms of tbe contract, we can see no reason why defendant was not' entitled to bave bad an opportunity to either give tbe notes to Lasater or, as bis Honor bas directed, pay tbe full amount of tbe pur-cbase money down. A court of equity looks to tbe substance of tbe tbing; and while it will not vary tbe terms of tbe contract or deprive tbe plaintiffs of any of their legal rights, after tbe option by acceptance bas been merged into a contract, it will guard the rights of both parties and makd them do equity. Tbe only element of personal confidence involved in tbe contract was that tbe lessors were to bave four years’ credit. If this is waived and tbe amount is paid in cash, bow can tbe plaintiffs complain? If they desired tbe notes, they should bave put themselves in an attitude to call for them by tendering tbe deed; this they refused to do. “A party does not forfeit bis right to tbe interposition of a court of equity to enforce-specific performance of a contract if be, reasonably and in good faith, offers to comply and continues ready to comply with its stipulations on bis part, although be may err in estimating tbe extent of bis obligation.” Willard v. Tayloe, supra. While, as consistently held by this and all other courts administering equitable rights and remedies, specific performance is not a matter of absolute right, yet it will be granted when it is apparent, from a view of all tbe circumstances of tbe particular case, that it will subserve tbe ends of justice and work no hardship upon tbe party who bas 'entered into tbe contract.

Upon a review of tbe.entire evidence and tbe verdict of tbe jury, we think that defendant bas acted in entire good fáith and is entitled to tbe relief granted by bis Honor. Plaintiffs are not required to enter into any contract with a stranger or to release any security to which they were entitled under tbe contract. They agreed to sell tbe property for $9,000 if accepted on or before 2 July, 1901. Only $1,000 was to be paid cash, and credit of four years was given for tbe balance. Tbe option was accepted more than a year before tbe time fixed, and they, without assigning any valid reason, rejected it. They receive, under tbe provisions of tbe judgment, tbe whole amount of the purchase money, with interest from, tbe day of tbe tender.

Hpon a careful examination of tbe entire record, with tbe aid of excellent briefs and oral argument, we find no reversible error.

No Error.