Chapman v. Breeze

• Decision Date: 09 December 1946
• Docket Number: 39788
• Parties: L. J. Chapman v. W. H. Breeze and Bernice W. Breeze, Appellants
• Court: Missouri Supreme Court

198 S.W.2d 717

355 Mo. 873

L. J. Chapman v. W. H. Breeze and Bernice W. Breeze, Appellants

No. 39788

Supreme Court of Missouri

December 9, 1946

Rehearing Denied January 13, 1947.

Appeal from Jackson Circuit Court; Hon. John R. James Judge.

Affirmed.

Rufus Burrus and Charles V. Garnett for appellants.

(1) The degree of proof required to establish the right to specific performance is that the evidence of all facts essential to recovery must be clear, cogent and convincing, and the proof must be such as to leave no room for reasonable doubt. Mo. Pac. Ry. Co. v. McCarty, 97 Mo. 214; Buck v Myer, 195 Mo.App. 287, 190 S.W. 997; Hinkle v. Hinkle, 236 S.W. 30; Mason v. Mason, 153 S.W.2d 27. (2) The finding of the trial court that plaintiff verbally notified defendants of his acceptance of the purchase option within the one year period is wholly without evidentiary support. (3) The finding of the trial court that plaintiff is indebted to defendants for rent to October 31, 1942, from which finding and decree plaintiff has not appealed, completely destroys the court's finding that plaintiff exercised the option to purchase. 39 C.J. 1367; Stith v. Newberry Co., 326 Mo. 467, 79 S.W.2d 447. (4) The option to purchase was not exercised because no attempt was made to comply with the terms of the option, which required payment of the purchase price within one year. Hollmann v. Conlon, 143 Mo. 369; Suhre v. Busch, 343 Mo. 170, 120 S.W.2d 47; Lively v. Tabor, 341 Mo. 352, 107 S.W.2d 62; Lockman v. Anderson, 116 Iowa 236, 89 N.W. 1072; Bras v. Sheffield, 49 Kan. 702, 31 P. 306; Case Note, 101 A.L.R. 432. (5) The acts and conduct of plaintiff disprove his claim that he exercised his option to purchase. (6) The findings of the trial court that any delay on plaintiff's part in accepting the option or paying the purchase price was waived by defendants and that defendants are estopped from denying that plaintiff became the purchaser of the property, are wholly without evidentiary support. (7) Plaintiff cannot now have specific performance because of his unreasonable delay in demanding it, the property having greatly increased in value. Suhre v. Busch, supra, and authorities there cited. (8) Decree of specific performance should not, in any event, have been awarded against defendant, Bernice W. Breeze, because no notice of exercise of the option was given to her, nor did plaintiff ever pay her any part of the purchase price. There was no proof of her husband's agency, and neither ratification nor estoppel were pleaded or proved. Missouri Cattle Loan Co. v. Insurance Co., 330 Mo. 988, 52 S.W.2d 1; State v. Arkansas-Missouri Power Co., 339 Mo. 15, 93 S.W.2d 887; Badger Lumber & Coal Co. v. Pugsley, 227 Mo.App. 1203, 61 S.W.2d 425. (9) The trial court erred in failing to allow defendants' claim for rent.

W. H. Carr and Frank P. Barker for respondent; Winger, Barker & Winger of counsel.

(1) Chapman made payments to Breezes which Chapman directed them to apply on the purchase price of the property. These payments Breezes retained. Bammert v. Kenefick, 262 S.W. 78. (2) Chapman's acceptance of the option was manifested by his acts and conduct done with the knowledge and consent of the optioners. Rice v. Griffith, 144 S.W.2d 837; Austin v. Burge, 156 Mo.App. 286, 137 S.W. 618; W.W. Kendall Boot & Shoe Co. v. Bain, 46 Mo.App. 581; Lee v. Dodd, 20 Mo.App. 271; State ex rel. Board of Commissioners v. Bruce, 97 P.2d 403; 66 C.J. 501; 1 Restatement of the Law of Contracts, sec. 72 (2); Industrial Bank & Trust Co. v. Hesselberg, 195 S.W.2d 470. (3) Breezes cannot now deprive Chapman of his right to this property without giving him an opportunity to pay the balance due on the purchase price. Henion v. Bacon, 91 N.Y.S. 399, 100 A.D. 99. (4) In this action the Breezes make claims for the costs of the improvements which they put upon the property. Chapman promised to pay these costs, in addition to the purchase price, only upon his purchase of the property. Thereby Breezes have confirmed Chapman's acceptance of the option and his purchase of the property. (5) Mrs. Bernice W. Breeze is bound by Chapman's acceptance of the option. Badger Lumber & Coal Co. v. Pugsley, 61 S.W.2d 425; Tevis v. Ryan, 233 U.S. 273, 34 S.Ct. 481; Niel Coal Corp. v. Cryder, 361 Ill. 274, 197 N.E. 750. (6) Kirkpatrick v. Pease, 202 Mo. 471, 101 S.W. 651.

Van Osdol, C. Bradley and Dalton, CC., concur.

OPINION

VAN OSDOL

Action in equity for specific performance of a contract alleged as resultant to the exercise of an option to purchase provision in a contract of lease of real property (Lots Nine and Ten, Block One, Lee's Summit), and for an accounting. The trial court found for plaintiff and entered a decree requiring plaintiff to pay into the hands of the clerk of the court the amount due as determined by the accounting, and directed defendants to deposit deed with the clerk within ten days thereafter; or upon the payment and the failure of defendants to convey by deed, the title was decreed to pass to plaintiff. Defendants, husband and wife, have appealed.

Defendants, appellants, Breeze and wife, acquired title to Lots Nine and Ten, and an additional Lot Eight, in March 1940, by purchase from the Chapman Dairy Company for a consideration of $ 1850. Defendants went into possession of Lot Eight, which was a residence property; and entered into a contract leasing Lots Nine and Ten to plaintiff, respondent, for a term of five years beginning March 25, 1940, at the monthly rental of $ 30. A dairy pasteurizing plant was situate on Lots Nine and Ten. The contract of lease provided the lessee, plaintiff, should accept the premises in their "present condition" and the lessee, plaintiff, covenanted to keep the premises in "good and sufficient repair." An option to purchase provision was contained in the written lease, as follows,

"Party of the second part (lessee) to have an option to purchase all of said real estate at the price of $ 1,600.00 provided said option if not taken shall cease and be of no effect after one year from date hereof; and provided further, that party of the second part, if he does purchase within said one year, shall pay parties of the first part all the costs of all improvements made by parties of the first part during the time before option taken, and that in addition to the said price of $ 1,600.00."

The main issue presented in the case is whether plaintiff has exercised the option provided in the option to purchase provision. The trial court's accounting is not questioned on this appeal, except the inclusion in the account of the item of $ 1600 (purchase price of the property as stipulated in the option provision); more particularly it is here said, the decree in accounting may be affected by the answers to the questions whether plaintiff exercised the option and became the equitable owner of the land, and when; and, if he did not, then the result of the accounting should be modified to exclude the $ 1600 purchase price item and to include the item of the accrued rent due and unpaid under the contract of lease.

Plaintiff's petition contained the allegations that the relation existing between plaintiff and defendant Breeze was one of trust and confidence; and that plaintiff and defendant Breeze had, until a few days before the instant action was instituted, treated the "contract as in existence, and part of the consideration was paid from time to time by plaintiff . . ."

As stated, upon acquiring the properties, defendants went into the occupancy of the residence building on Lot Eight and, sometime later, defendant Breeze proceeded to effect "the rehabilitation, repair, remodeling, and reconditioning" of the dairy plant which was "run down" and in a "dilapidated condition." Sometime in 1941, plaintiff moved heavy machinery and equipment into the building and built some inside walls or partitions.

Now admittedly plaintiff did not exercise the option within the year, that is, before March 25, 1941, by the payment or tender of the agreed price, $ 1600, unto defendants and by a demand for a deed. And the tender was never made by plaintiff of any unpaid balance of that sum until the institution of the instant action. So plaintiff did not comply with the strict rule of payment or tender of the purchase price as was held is required of an optionee as a prerequisite for specific performance in a case involving an option for the purchase of land (Hollmann v. Conlon, 143 Mo. 369, 45 S.W. 275) and in a case involving an option for the purchase of certificates of corporate stock (Suhre v. Busch, 343 Mo. 170, 120 S.W. 2d 47). But, of course, the strict compliance with an option requiring the payment of purchase price within the time stipulated for the exercise of the option may be waived by the acceptance of the purchase price subsequent to the stipulated time. Bammert v. Kenefick, Mo. Sup., 261 S.W. 78.

Where there is a valid bilateral written contract of sale of land it has been said the payment of the purchase price within the stipulated time may be waived, although the payment of the purchase price within the stipulated time was of the essence of the contract. Kyner v. Bryant, 353 Mo. 1212, 187 S.W. 2d 202; 58 C.J., Specific Performance, sec. 373, p. 1099. An option is a complete bilateral contract with mutuality of obligation upon the optionee's election to accept the option. Until the optionee so elects there is no enforcible contract, the option being in effect but an offer, although an offer binding on the optionor until the time stipulated for the election has expired by virtue of the consideration paid for the option, as was the optionor bound in the case at bar wherein we have a contract of lease containing, as an integral part thereof, an option to...