Cummins v. Beavers

• Decision Date: 23 November 1904
• Citation: 48 S.E. 891,103 Va. 230
• Court: Virginia Supreme Court
• Parties: CUMMINS et al. v. BEAVERS.

48 S.E. 891

103 Va. 230

CUMMINS et al.

v.BEAVERS.

Supreme Court of Appeals of Virginia.

Nov. 23, 1904.

vendor and purchases—option—validity— extension—specific performance— purchaser with knowledge.

1. In a suit for specific performance of a contract to convey, a defendant claiming to have purchased under a prior option, which had in fact expired before defendant purchased, cannot object that the consideration for plaintiff's contract was not paid when the contract was executed.

2. That an option to purchase land is taken by the purchaser as a speculation does not render it fraudulent

3. An option to purchase land, based on a valuable consideration, may be specifically enforced by the holder of the option.

4. An option to purchase land is valid and specifically enforceable, though the consideration is not paid until some time after the option is given.

5. Where, on the date an option for the purchase of land expired, the purchaser stated that he would not take the land, but refused to give up the written contract, stating that he would give up the contract if he did not buy within the two weeks, the statement of the vendor that he would return in two weeks was not an extension of the option.

6. An option to purchase land cannot be extended by parol and without consideration, so as to prevent withdrawal at any time before acceptance.

7. A person purchasing land with knowledge that another has an enforceable option to purchase may be required to convey to the holder of the option.

Appeal from Circuit Court Tazewell County.

Action by James M. Beavers against E. Barnett and others. From a judgment for plaintiff, A. Cummins and others, defendants, appeal. Affirmed.

H. C. Alderson and Chapman & Gillespie, for appellants.

Henry Braham, for appellee.

CARDWELL, J. In May, 1901, E. Barnett and wife executed to Stephen Effler a contract known as an option, by which they gave to Effler or his assigns the exclusive right, until the 10th day of November, 1901, to purchase a certain tract of land therein described as lying in McDowell county, W. Va., at the price of $22.50 per acre. This option was, on the 13th day of August, 1901, assigned by Effler, for a valuable consideration, to A. Cummins.

On the 3d day of September, 1901, during the existence of the Effler option, then held by Cummins, Barnett and wife executed to one James M. Beavers an option contract on the same tract of land, by which they gave to Beavers the exclusive right to purchase the land at any time within 45 days from the 11th day of November, 1901, at the same price per acre named in the Effler option, provided the land was not taken under the Effler option. This contract to Beavers, under seal, purports to have been executed for the consideration of $1, which was not paid, however, on the day of the execution of the contract, but was paid by Beavers on the 13th day of November, 1901, at which time the contract was acknowledged by Barnett and wife before a notary public.

Up to the 11th day of November, 1901, Cummins had failed to exercise the Effler option, and on that day Barnett went to Cummins' place of business in the town of Tazewell and called bis attention to the fact that the Effler option had expired the day before (which was Sunday), and asked Cummins if he was going to take the land, at the same time offering him data by which the deed, as Barnett thought, might be prepared, and upon Cummins positively stating that he would not take the land at the price named In the option, as he considered the price too high, Barnett asked for the Effler option, which Cummins refused to surrender. After some discussion of the matter, Cummins said he would like to have two weeks to investigate the land; that he hadn't had time to do so; and that If Barnett would give him two weeks, if he did not take the land on that day two weeks, he would give up the contract he held. To this Barnett replied, "I will be back this day two weeks, " having previously said to Cummins that he could not get the land for less than the price named.

On the 13th of November, 1901, two days after the conversation between Barnett and Cummins at the office of the latter, Barnett and wife acknowledged the Beavers option before a notary public, as above stated, and thereupon Barnett signed and delivered to Beavers a written notice to Cummins, as follows:

"You are hereby notified that I have made arrangements for the sale of my land, so you will please deliver to Mr. James Beavers the John Effler option which expired on November 10th, 1901, and which you still hold."

This notice was delivered to Cummins on the 13th day of November, 1901, by Beavers, who then also notified Cummins of his option contract, that it took effect on the 11th day of November, 1901, and that be had sent the contract to the clerk of the county court for recordation. Cummins again refused to surrender the Effler option, and refused to permit Beavers to see and examine it, and three days thereafter, to wit, on the I6th day of November, 1901, gave Barnett notice that he had elected to purchase the land, under the Effler option, upon the terms therein stated. This notice from Cummins was delivered to Barnett on the 19th or 20th of November, and on the 23d of November, before Cummins had received a deed from Barnett and wife, or had incurred any expense in furtherance of a purpose to take the land, Beavers addressed a letter to Cummins, and again notified him of his contract.

On the 20th of December following, Cummins instituted a chancery suit in the circuit court of Tazewell county against Barnett and wife, Effler, and Beavers, seeking to obtain title to the land in question, alleging that there had been a parol extension of the Effler option, and that, since he had given Barnett notice that he would take the land referred to, he had been informed that Beavers had persuaded Barnett to give him an option on the land, and praying that Beavers be enjoined from any further attempt to carry out his contract. This bill was dismissed by Cummins before there was any appearance by the defendants.

On the 25th day of December, 1901, Beavers gave Barnett and wife verbal notice that he would take their land under his option, and on the day following, which was within 45 days from November 11th next preceding, he gave them written notice of such election; that he was ready to comply with his contract; and made them a legal tender of the cash payment in accordance with the terms of the contract, which Barnett declined to receive.

On the 30th day of December, 1901, Barnett and wife, at the instance of Cummins, conveyed the land in question to the Faraday Coal & Coke Company, having at that time or previously obtained from Cummins a contract binding himself to bear all costs and expenses of any suit brought to vacate that deed, and giving Barnett the right to refund, without interest, the purchase money for the land which the grantee then paid, in the event the deed should be set aside.

At the February rules, 1902, this suit was instituted by Beavers against Barnett and wife, Cummins, and the Faraday Coal & Coke Company, for the specific execution of his contract with Barnett and wife, and to vacate the deed to the Faraday Coal & Coke Company, and to compel the defendants to convey title to the land to him, alleging a continued readiness to perform the contract fully on his part. Cummins and the Faraday Coal & Coke Company answered the bill, denying the right of the complainant to specific performance, on the ground that the contract sought to be enforced was unilateral and could not be enforced for want of mutuality, and that there had been a parol extension of the Effler option, within which extension Cummins had accepted the terms of the option.

Upon the hearing of the cause on the pleadings, the exhibits therewith, and depositions taken on behalf of the parties, the circuit court, by its decree, granted the relief prayed for in the bill, and from this decree Cummins and the Faraday Coal & Coke Company obtained an appeal to this court.

It will be observed from the foregoing state of facts that Cummins had a unilateral contract, or option, which by its terms expired on the 10th of November, 1901; and the appellee, Beavers, had a similar contract, running 45 days from the 11th of November, 1901. The first contention of appellants is tbat appellee's contract being a unilateral one and without a consideration to support it, it cannot be enforced in a court of equity for want of mutuality.

Appellee's contract expressly states a consideration of $1, and, whether the $1 was paid at the time the contract was signed by Barnett and wife or not, it was in fact paid when they acknowledged the contract for recordation on November 13, 1901; and therefore, if the contract under which the appellants claim in fact expired on the 11th day of November (the 10th being Sunday), it can make no difference whether the consideration stated in appellee's contract was paid on the 13th of November or prior.

There is some evidence that appellee's option was not taken in good faith, but was intended as a "sham" to force Cummins to take the land, and that appellee agreed verbally on November 13th to pay the Barnetts a $4,000 cash payment on the day of acceptance, instead of $500 as provided by the terms of the option, and for that reason it should not be enforced in a court of equity; but, as the learned judge of the circuit court, in his written opinion made a part of the record, says, there is nothing in the pleadings directly raising such issues. Conceding, however, that these issues are made by the pleadings, clearly evidence tending to show an oral agreement altering the terms of the written contract was inadmissible, and it was excepted to, and we do not find in the evidence support of the contention that there was a lack of good faith on the part of the appellee in the transaction between him and the Barnetts. The mere fact that his purpose in taking...