Durfee House Furnishing Company, Inc. v. the Great Atlantic And Pacific Tea Co.

• Decision Date: 18 February 1927
• Citation: 136 A. 379,100 Vt. 204
• Parties: DURFEE HOUSE FURNISHING COMPANY, INC. v. THE GREAT ATLANTIC AND PACIFIC TEA COMPANY
• Court: Vermont Supreme Court

136 A. 379

100 Vt. 204

DURFEE HOUSE FURNISHING COMPANY, INC. v. THE GREAT ATLANTIC AND PACIFIC TEA COMPANY

Supreme Court of Vermont

February 18, 1927

January Term, 1927.

ACTION OF JUSTICE EJECTMENT. Plea, general denial. Trial by Fair Haven municipal court, William H. Rowland, Municipal Judge on agreed statement of facts. Judgment for the defendant. The plaintiff excepted. The opinion states the case.

Judgment affirmed.

E D. Raymond and Lawrence, Stafford & Bloomer for the plaintiff.

Jones & Jones for the defendant.

Present WATSON, C. J., POWERS, SLACK, FISH, and MOULTON, JJ.

OPINION

MOULTON

This is an action of ejectment, under G. L. 2146, 2147, and 2152, and was tried by the court below upon an agreed statement of facts, upon which judgment was rendered for the defendant. The case is here upon exceptions by the plaintiff.

By the agreed statement, the following facts appear: On July 22, 1921, Marion E. Heald, a widow, by written instrument, duly executed, delivered, and recorded, leased to the Cahee House Furnishing Company, a corporation, its successors and assigns, the south half of a building owned by her, situated in Fair Haven and known as the "O. A. Peck Block," for the term of five years. This lease contained an agreement by the lessor "to sell and convey by good and sufficient deed in law the 'O. A. Peck Block' to the lessee (said Cahee House Furnishing Company) its successors and assigns, upon payment by lessee to the lessor of the sum of fifteen thousand ($ 15,000.) dollars at any time on or before the expiration of the term of five years provided for in this lease." On June 29, 1923, the Cahee House Furnishing Company, by written instrument, duly executed and recorded, assigned all its right, title and interest in and to the lease and option to Ralph E. Durfee. On August 28, 1924, Mrs. Heald leased to the defendant corporation a certain store and cellar, theretofore occupied by it, in the "O. A. Peck Block," but not a part of the south half previously leased to the Cahee House Furnishing Company, for the term of one year, with privilege of renewal at a fixed monthly rental. This lease was in writing, duly executed, delivered, and recorded. On November 4, 1925, Ralph E. Durfee exercised the option in the lease which had been assigned to him, and upon the payment of $ 15,000 received from Mrs. Heald a warranty deed of the entire block, without the reservation therein of any right of the defendant to occupy any part of the premises. On November 5, 1925, Ralph E. Durfee, by quitclaim deed, conveyed the property to the plaintiff. Both deeds were duly executed, delivered, and recorded.

On November 9, 1925, the plaintiff gave written notice to the defendant that it had purchased the Peck Block, and stated that it recognized no leases upon the property, but should be glad to grant a new lease. So far as appears the defendant did not answer this letter, but, on the appropriate date, mailed the plaintiff a check for the rent due under the lease from Mrs. Heald. The plaintiff returned the check, again stating that it refused to recognize the lease. Further checks for rent were forwarded by defendant to plaintiff and returned. It is not necessary to state the details of this procedure, further than to say that the rent due under the Heald lease has been tendered with interest thereon, and refused. On January 9, 1926, the plaintiff gave the defendant notice to vacate the store, and upon the refusal by the latter to do so commenced this action.

The plaintiff bases its claim to recover upon the ground that the record of the lease containing the option agreement was constructive notice of the existence of the latter, and that having taken its lease subsequent to such record, although before the option was exercised, the defendant's rights were subordinated to those of the optionee and its assignees.

That the relationship of landlord and tenant existed between the parties after the conveyance of the entire property to the plaintiff is clear. The option agreement was assignable by the terms of the lease, as also by law (Hagar, Admr. v. Buck, 44 Vt. 285, 289, 8 A. R. 368, and see 18 Harvard Law Review, 457), and if, when Mrs. Heald leased to the defendant, she had, by the option agreement, parted with her title, the defendant had no right of possession, under such lease, as against the plaintiff.

This is an action of law, and the legal title to the property is alone to be considered. The question here is, did the option pass to the optionee any legal title to the premises later leased by the optioner to the defendant? The answer lies in a consideration of the nature of the option agreement.

An option is an agreement by which one binds himself to sell and convey to another party certain property at a stipulated price within a designated time, leaving it in the discretion of such other party to take and pay for the property. West Virginia Pulp & Paper Co. v. Cooper, 87 W.Va. 781, 106 S.E. 55, 59. Although usually described as a contract, it is evident that it is not such until accepted by the optionee, for, until that time it is only a continuing offer to sell and convey at the price and upon the conditions therein specified. The optioner is bound that the offer shall be kept open and available in accordance with its terms, but its acceptance rests wholly in the discretion of the optionee, and there is no obligation upon the latter with regard to it. Bras v. Sheffield, 49 Kan. 702, 31 P. 306, 307, 308, 33 Am. St. Rep. 386; Luigart v. Lexington Turf Club, 130 Ky. 473, 113 S.W. 814, 816, 817; Newton v. Newton, 11 R.I. 390, 23 Am. St. Rep. 476; The Boston & Maine Railroad v. Bartlett, 57 Mass. 224, 227; Caldwell v. Frazier, 65 Kan. 24, 68 P. 1076, 1077; Rease v. Kittle, 56 W.Va. 269, 49 S.E. 150, 153, 154; Sweezy v. Jones, 65 Iowa 272, 21 N.W. 603; Gustin v. School Dist., 94 Mich. 502, 54 N.W. 156, 157, 34 Am. St. Rep. 361; Cameron v. Shumway, 149 Mich. 634, 113 N.W. 287, 290; Womack v. Coleman, 92 Minn. 328, 100 N.W. 9, 11; Kadish v. Lyon, 229 Ill. 35, 82 N.E. 194, 196; Thacher v. Weston, 197 Mass. 143, 83 N.E. 360, 361; Phenix Ins. Co. v. Kerr (C.C.A.) 129 F. 723, 66 L.R.A. 569, 573.

It has sometimes been assumed that an option is an offer to make a bilateral contract, and that the acceptance completes such contract, but the late Professor C. C. Langdell (18 Harvard Law Review, 1, 11) points out that an option is a conditional unilateral contract, and that acceptance is the performance of the condition pure and simple. However, it does not matter which theory is adopted; the result is the same. There is no completed contract for the sale of the property until the optionee has accepted the offer according to its terms, or, to put it otherwise, has performed the condition contained in the offer. Barnes v. Rea, 219 Pa. 279, 68 A. 836, 838; Sirk v. Ela, 163 Mass. 394, 40 N.E. 183. Then, and then only, can the contract be specifically enforced. Hayes v. O'Brien, 149 Ill. 403, 37 N.E. 73, 75, 23 L.R.A. 555; Stembridge v. Stembridge's Estate, 87 Ky. 91, 7 S.W. 611, 612; Edwards v. West, 7 Ch. Div. 858, 862. And until then the optionee obtains no estate or title, legal or equitable, in the property. Stembridge v. Stembridge's Estate, supra; Caldwell v. Frazier, supra; Rease v. Kittle, supra; Sweezy v. Jones, supra; Gustin v. School Dist., supra; Cameron v. Shumway, supra; Womack v. Coleman, supra; Kadish v. Lyon, supra; Thatcher v. Weston, supra; Phoenix Ins. Co. v. Kerr, supra; Luigart v. Lexington Turf Club, supra; West Va. Pulp and Paper Co. v. Cooper, supra; Bras v. Sheffield, supra.

Nor does a timely election under the option and payment of the purchase price relate back to the date of option, and serve to cut off intervening...