Bandy v. Myers, 20309

• Decision Date: 14 June 1967
• Docket Number: No. 20309,No. 2,20309,2
• Citation: 227 N.E.2d 183,141 Ind.App. 220
• Parties: Emmett O. BANDY, Appellant, v. Mabel E. MYERS, Albert C. Layton and Frances L. Layton, Appellees
• Court: Indiana Appellate Court

Page 183

227 N.E.2d 183

141 Ind.App. 220

Emmett O. BANDY, Appellant, v. Mabel E. MYERS, Albert C. Layton and Frances L. Layton, Appellees.

No. 20309.

Appellate Court of Indiana, Division No. 2.

June 14, 1967.

Vercil O. Springer, Owen S. Kern, Indianapolis, for appellant.

Smith & Jones, Harold W. Jones, Robert W. Geddes, Keith L. Andrews, William R. Richards and John A. Stanek, Indianapolis, for appellees.

PFAFF, Chief Justice.

Appellant, Emmett O. Bandy, brought this action for specific performance of an option to purchase real estate from the appellee, Mabel E. Myers. The appellees, Albert C. Layton and Frances L. Layton, were also made defendants. Appellant alleged that appellee Myers had conveyed a portion of the real estate to appellees Albert C. Layton and Frances L. Layton subsequent to the execution of the option and that they were at all times fully informed of appellant's rights in the real estate. Appellant prayed that the appellees, and each of them, be compelled to convey to appellant by warranty deed any and all interest which they had in the real estate. Appellee Myers filed an answer in admission and denial and six paragraphs of answer. Appellees Layton an Layton filed an answer in admission and denial and also sought to quiet title in the portion conveyed to them.

Trial resulted in a judgment for all appellees.

It appears that appellee Myers executed a written option on July 13, 1963, reciting that in consideration of $1.00, receipt of which was acknowledged, she gave appellant an exclusive right for a period of time (the exact period being in dispute here) to purchase the real estate for $19,000.00. Under its terms a written acceptance served upon appellee Myers by mailing the same on or before the termination of the option was to be sufficient notice of the election of appellant to exercise the option. In the event it was exercised, appellee Myers was to furnish an abstract of title within a reasonable period of time. Upon payment in full of the net purchase price, appellee Myers was to execute and deliver a warranty deed. This instrument was never recorded.

In October, 1963, appellees Albert C. Layton and Frances L. Layton negotiated with appellee Mabel E. Myers for the purchase of a part of the land involved herein. They agreed upon the purchase price, which was paid in full on October 11, 1963. Appellee Myers then gave her receipt for the purchase price of $2500.00, which receipt stated that it was 'for lot located 625.56 from property line of Guion Rd. west to his east property line 82 ft. frontage, 289.35 deep, which is the property of the undersigned.' The deed was to be made as soon as a proper legal description could be obtained, based upon a survey which had been started. The appellees Albert C. Layton and Frances L. Layton proceeded to put a well down, and had a foundation prepared for a house. On October 19, 1963 they had a house moved onto the foundation.

On November 23, 1963, appellant saw the house and learned that the Laytons were claiming as purchasers of a part of the land. Appellant sent a letter to appellee Myers, dated four days later, saying that he had the money in hand and was ready to exercise the option, and that a survey would be required. A day or two later appellant went to the home of appellee Myers and was told that she did not wish to discuss the matter and that if he had anything further to say that he could discuss it with her attorney, Mr. Andrews. No tender of the purchase price was ever made.

Thereafter, on December 2, 1963, appellant sent a telegram to appellees Albert C. Layton and Frances L. Layton stating that he had an option on the property owned by appellee Myers. Prior to the receipt of this telegram the Laytons had never heard of the appellant and knew nothing of his claims and did not have notice of any facts which would put an ordinarily prudent person on inquiry.

Appellee Myers prepared a deed, dated two days subsequent to the telegram, which apparently contained a faulty description, conveying said real estate to Albert C. and Frances L. Layton. Various deeds, plats and descriptions were introduced in evidence and are referred to by appellant in his argument, but are not contained in the briefs. It is well settled that this court will not search the record to find reversible error. Wabash Township v. Cooper (1943), 221 Ind. 304, 47 N.E.2d 611; Home Owners' Loan Corp. v. Hornyak (1942), 220 Ind. 487, 44 N.E.2d 89; Credit Bureau etc. v. Faulstitch (1964), 135 Ind.App. 511, 195 N.E.2d 359.

As stated in 25 I.L.E. Sales of Realty, § 2, p. 290:

'An option to purchase real estate is a contract by which the owner thereof agrees with another person that the latter shall have the power to purchase such property at a fixed price within a certain period. It gives no right of property in, and to, the thing which is the subject of the option, since it is not a sale, nor even an agreement for a sale and at most it is but a right of election in the party receiving the same to exercise a privilege, and only when that privilege has been exercised by an acceptance does it become a contract to sell. By an option the owner does not sell his property, but he does subject himself to the liability of having to convey the property if the option is exercised within the time and in the manner stipulated.' Tyler v. Tyler (1942), 111 Ind.App. 607, 40 N.E.2d 983; Smith v. Tomlin (1936), 102 Ind.App. 103, 1 N.E.2d 297; Butsch v. Swallow (1922), 78 Ind.App. 101, 134 N.E. 877; Hilker v. Curdes (1922), 77 Ind.App. 466, 133 N.E. 851; In re Aurora Gaslight, etc. Co. (1917), 64 Ind.App. 690, 133 N.E. 1012.

Therefore, appellant had no right in the real estate involved herein or in the contract to purchase the same at the time the Laytons orally contracted for the purchase of a part, paid the full purchase price, received the receipt, took possession, placed a house on the real estate and made improvements thereon or at the time when appellant saw the Laytons' improvements and learned of their claims. Appellant argues, however, that he must prevail over the Laytons because they had notice of the existence of his option at the time they received their deeds.

Assuming that appellant's attempted exercise of the option was valid and made within the time specified therein (although this is disputed) and it thereby became a contract to sell, such contract was subsequent in date to the contract of the Laytons. A second purchaser under a real estate contract, even though bona fide, is not protected against the equitable interest of the first purchaser. Gallion v....