Couch v. McCoy

• Decision Date: 21 June 1905
• Parties: COUCH v. McCOY et al.
• Court: U.S. Court of Appeals — Fourth Circuit

138 F. 696

COUCH v. McCOY et al.

United States Circuit Court, S.D. West Virginia.

June 21, 1905

Mollohan McClintic & Mathews and Geo. E. Price, for plaintiff.

Brown Jackson & Knight and W. J. McCoy, in pro. per., for defendants.

This is a suit for the specific performance of a contract for the sale of lands, alleged by the plaintiff to exist by reason of certain written and telegraphic correspondence between him and the defendant W. J. McCoy, which correspondence, it is asserted in the bill, amounted to a valid 60-days option to the plaintiff to purchase the lands described in the bill and which option the plaintiff duly accepted within said 60 days. The suit was originally brought by the plaintiff in the circuit court of Greenbrier county, W.Va., and was removed by the defendants to this court, after which removal an amended bill was filed in the cause. The material facts set up in the amended bill as showing grounds for the relief prayed in the bill are as follows:

That in the winter of 1903 plaintiff became interested in the possible development of certain lands in Greenbrier county W. Va., and the construction of railways to said lands, all of which, if successfully carried out, would require the expenditure of a large sum of money. That, to secure such a body of land as would render such expenditure desirable, it was necessary that plaintiff acquire many small tracts of land lying practically contiguous to each other. That, in his examination of a tract of 275 acres owned by J. C. McCoy and W. A. Brown, he ascertained that the defendant W. J. McCoy and others jointly interested with him owned three tracts of land adjacent to said 275-acre tract, and containing respectively 429, 336, and 943 acres, which tracts are known as the James McCoy lands. That about January 1, 1904, he entered into correspondence with defendant W. J. McCoy, as part owner of said lands and as agent for all of the other defendants, with a view to secure an option to purchase the said lands, and, as it required considerable time for said W. J. McCoy to communicate with his co-owners, 'your orator, being desirous of obtaining such option and closing up the same without loss of time, your orator instructed the president and cashier of the First National Bank of Ronceverte, West Virginia, that should a sixty-days option to the plaintiff for said land be mailed to the bank by said W. J. McCoy, fixing a price thereon which was at all reasonable, that said bank should, out of the funds of your orator deposited therein, which largely exceeded said sum, pay to the said W. J. McCoy or his order $50 for said option, and your orator wrote to said McCoy informing him of this arrangement, and that the money was deposited in said bank for said purpose, and requested him to send said option to said bank. ' That, no such option having been received at said bank, the plaintiff, about March 2, 1904, caused J. C. McCoy, who is a cousin of said W. J. McCoy, to send for plaintiff a telegram to W. J. McCoy to the effect that the plaintiff was then in Ronceverte, and that unless an option was secured promptly the chance of a sale to him would be lost. That on March 3, 1904, said W. J. McCoy telegraphed said J. C. McCoy as follows:

'For fifty dollars will give sixty day option at twenty-five thousand dollars.'

That on March 3, 1904 said W. J. McCoy also forwarded to said plaintiff two letters which read as follows:

'Dear Sir: I assume J. C. McCoy has shown you my telegram. I would explain delay by stating that not until after the receipt of his telegram did I succeed in getting consent of the last party interested, to name the figure mentioned,-- $25000.00.

'If the option on that basis is desired please inform me to that effect.

'Respectfully yours, W. J. McCoy.'

'Dear Sir: In my letter to you mailed this P.M., I should have added that the option referred to would mean one-third cash, balance, if desired, in one and two years, in equal installments, with 6% interest, payable annually, on the deferred payments.

'Resp'ly yours, W. J. McCoy.'

That upon seeing the telegram to said J. C. McCoy, plaintiff at once, on the 3d day of March, 1904, sent the following telegram to said W. J. McCoy:

'Your telegram just handed me, forward sixty day option to-day First National Bank, Ronceverte.

(Signed) C. B. Couch.'

The bill further avers that on the same day the plaintiff wrote said W. J. McCoy accepting the option at said price, ' and informing said McCoy that said sum was deposited at said bank and would be forwarded by it on receipt of option,' etc. The letter referred to is exhibited with the bill, but does not contain any part of the language above quoted from the bill, but reads as follows:

'Your telegram to Mr. J. C. McCoy was handed me this morning and I was surprised at the price you placed upon your property inasmuch as your cousin J. C. McCoy whose land adjoins this had priced me his property at $10 per acre. However as I have but a few days in which to make my decision I decided to wire you to forward option at the price named and as soon as said paper arrives I will make investigation of your property and write you immediately on my return to Ronceverte.

'If you have not already forwarded option please do so at once as I have to give answer to other parties very shortly.'

That on March 9, 1904, plaintiff received a telegram from said W. J. McCoy, stating that he could not send option at price named, to which he at once replied by wire as follows:

'Telegram to Charleston received. Have relied on your statements. Must hold you thereto. Am ready to take lands on terms mentioned.'

On the same day W. J. McCoy replied by telegraph:

'As heretofore notified you deal is off.'

On the 14th of March, 1904, Mr. Couch wrote the following letter to Mr. McCoy, which closes the correspondence exhibited with the bill:

'Dear Sir: Your telegram to me calling off trade between us was certainly a great surprise to me. I went into the matter in good faith and asked you for price on your and your co-owners' land in Greenbrier County, this State. Immediately upon receipt of your telegram to Mr. J. C. McCoy, which was sent at my request, I accepted the offer named in your telegram and went to considerable expense in sending engineers to survey and examine the property before I received your telegram declining to carry out your agreement. On March 8th I wired you that I was prepared to take the land upon the terms agreed upon, and I now write to confirm that telegram. I am prepared to take and pay you for the land upon the terms agreed upon, namely one-third cash and the balance in one and two years, and in justice to myself I shall have to insist upon your complying with your agreement. As a matter of protection to myself, I have instituted suit for the specific performance of your contract, and have filed a Lis Pendens on the records in Greenbrier County.

'I believe if you will give this matter your consideration that you will recognize both your moral and legal obligation to convey to me this land in compliance with your agreement, and you will thus save the expense of a litigation which I shall have to prosecute to enforce my rights in the matter.

'Trusting that you will take this view of the matter, I remain,' etc.

Before passing to a discussion of the case as the same is before me, I call attention to the fact that the above-quoted letter states that Mr. Couch wired acceptance of the land on March 8th. This is evidently an error, as his telegram was not sent until March 9th, and after the receipt of a telegram from McCoy withdrawing offer of option.

KELLER, District Judge (after making foregoing statement).

This case is now before me upon demurrer to the bill, and, as a matter of course, all the facts well pleaded in the bill are, for the purposes of the demurrer, to be taken as literally true; and I think these facts, relieved of certain minor contradictions appearing in the bill itself, are substantially set forth in the foregoing statement.

It is well at the outset to distinguish between an offer of option and an offer of sale. It is indisputable that had a 60-day option, upon the terms set forth in the telegram exhibited with the bill, been offered by Mr. McCoy without consideration, it might have been withdrawn by him at any time, provided such withdrawal had been communicated to the plaintiff prior to his acceptance of the same; and by this I mean the acceptance of the proffer to sell, for until such acceptance there is no contract, as the proposed vendee is not in any way bound, and unless both are bound, so that an action could be maintained after either for a breach, neither is bound. Mr. Bishop, in his work on Contracts, Sec. 325, says:

'Since an offer is not a contract, the party making it may withdraw it at any time before acceptance. Even though it is in writing, and by its terms is to stand open for a specified period, the result is the same. With no money consideration, and no corresponding promise from the person to whom it is made, the promise not to withdraw it has no binding force. If a consideration for the undertaking to leave the offer open is given and accepted, this of itself constitutes a contract, and the offer cannot be withdrawn.'

It is then manifest that an offer of an option, until accepted according to its terms, is no more binding than an offer of sale without consideration, and may be withdrawn unless prior to such withdrawal it be so accepted. There are then two elements in every option contract: First, the offer to sell which does not become a contract unless and until accepted according to its terms; and, second, the completed contract to leave the offer open for a specified...