Frey v. Yust, 35542

• Decision Date: 19 November 1974
• Docket Number: No. 35542,35542
• Citation: 516 S.W.2d 321
• Parties: Antoinette M. FREY, Plaintiff-Respondent, v. Milton S. YUST, Defendant-Appellant. . Louis District, Division One
• Court: Missouri Court of Appeals

Page 321

516 S.W.2d 321

Antoinette M. FREY, Plaintiff-Respondent, v. Milton S. YUST, Defendant-Appellant.

No. 35542.

Missouri Court of Appeals, St. Louis District, Division One.

Nov. 19, 1974.

W. W. Sleater, St. Louis, for defendant-appellant.

Ziercher, Tzinberg, Human & Michenfelder, George J. Bude, Clayton, for plaintiff-respondent.

WEIER, Judge.

Plaintiff Antoinette M. Frey filed suit for specific performance of a contract to convey real estate. Defendant Milton S. Yust denied plaintiff's allegations, and raised three counterclaims: (1) for rent due; (2) in the alternative, damages for holding over; and (3) damages for slander of title. The trial court ordered specific performance, denied relief on all of the counterclaims, and defendant appealed.

We review the facts. Defendant is the owner of certain real estate in St. Louis County, described as Lot 164 of Lynn Meadows Plat No. 3, according to the plat recorded in Plat Book 68, pages 40 and 41 of the St. Louis County Records. The street address of the premises in question is No. 1 Montclair Court, Florissant, Missouri. On September 1, 1965, defendant and his then wife, Mary P. Yust, as lessors, entered into a 5-year lease agreement with plaintiff, as lessee, for these premises. This lease included a purchase option which could be exercised by lessee at any time prior to the expiration date of the lease. ¹

In July, 1970 plaintiff went to Community Federal Savings and Loan Association to secure a twelve thousand dollar ($12,000.00) loan to purchase the leased premises. A loan commitment for the entire amount sought was approved on August 5, 1970. But the loan commitment charged two points to the seller who here is defendant. There had been no agreement between the parties that defendant pay the two points.

In an attempt to exercise the purchase option, plaintiff, through her attorney, sent defendant a letter, dated August 17, 1970, which stated in part: 'This letter is to serve as notice to you of our client's desire to execute said option at the expiration of the lease term, September 1, 1970.' Defendant received this letter but did not reply to it. A 'notice to terminate tenancy', either delivered to plaintiff at her place of employment by defendant or received by her in the mail on September 24, 1970 from defendant, consisted of the next communication between the parties. By letter dated October 7, 1970, plaintiff, again through her attorney, responded that she was ignoring the notice to vacate, and further alleged that she was ready and able to perform her obligations under the option contract, and threatened legal action if defendant refused to comply. However, this letter was never received by defendant, and was returned to plaintiff's attorney marked 'unclaimed'. No further communication passed between these parties until this lawsuit was instituted in May, 1972.

After August 31, 1970 (the lease expiration date) plaintiff continued to occupy the premises, making monthly rental payments of $100.00 by check payable to Mary Patricia Yust and Milton Yust. The checks were delivered to Mrs. Yust. Plaintiff continued to reside on the premises until the end of May, 1972. She made no rental payments for April or May of 1972, and vacated the premises without giving notice to defendant.

Defendant has raised several assignments of error on appeal, claiming, among other things, that plaintiff did not tender the option purchase price and that she did not properly exercise the option contract. He has also challenged the trial court's denial of his three counterclaims.

It is undisputed that the lease agreement contained an option contract to purchase, which plaintiff could exercise at any time before the termination of the written lease agreement. An option is a privilege, a right of election to exercise a privilege. As such, an option constitutes a continuing offer on the part of the vendor or owner until accepted within the time and on the terms limited in the option. When accepted, a valid agreement arises supported by mutual promises. Suhre v. Busch, 343 Mo. 170, 120 S.W.2d 47, 53(1) (1938); Lively v. Tabor, 341 Mo. 352, 107 S.W.2d 62, 66(4) (1937). Stated more specifically, when the offer is seasonably accepted, a new bilateral contract arises, and it is this contract which is specifically enforceable. Suhre v. Busch, supra, 120 S.W.2d at 53(1); Starr v. Crenshaw, 279 Mo. 344, 213 S.W. 811, 813(1) (1919).

It is also fundamental that acceptance of the option must be in accordance with the terms of the option and cannot be made in some manner contrary to the method provided. Suhre v. Busch, supra 120 S.W.2d at 54(2--5). However, if, as in the case under consideration, there is no stipulation as to the mode, manner, or way the optionee should give notice of acceptance, any manifestation of the determination to accept will suffice, with a resultant contract of purchase and sale. Lusco v. Tavitian, 296 S.W.2d 14, 16(4) (Mo.1956). When, as here, an option contract to purchase involves real estate, the exercise of that option creates an enforceable bilateral contract, and time is not ordinarily of the essence; i.e., completion of the sale prior to the termination of the option date is not required. Gulf Oil Corporation v. Ferguson, 509 S.W.2d 1, 5(2) (Mo.1974). Nothing in the terms of the option contract under consideration expressly or impliedly required payment of the purchase price as a condition to its complete exercise. Real estate option contracts similar to the one at issue have been interpreted as containing no requirement of purchase price payment to effectuate a valid option exercise. Such payment may be made within a reasonable time. See Gulf Oil Corporation v. Ferguson, supra at 2, 5(1).

However, while plaintiff in the instant case was not required to complete the sale in order to exercise the option, nonetheless she was required to manifest an acceptance of this option privilege within the time specified; i.e., prior to September 1, 1970. It is fundamental contract law that acceptance of an offer must be unequivocal and certain. Keith v. Tucker,483 S.W.2d 430, 435(7) (Mo.App.1972); Brown v. Childers, 254 S.W.2d 275, 280(2) (Mo.App.1953). Since an option, as described above, is but a continuing offer, it must be accepted in the same manner as any offer in order to create an enforceable contract.

We turn again to the language of plaintiff's letter of August 17, 1970, which allegedly constituted an exercise of the purchase option. This correspondence contained the following: 'This letter is to serve as notice to you of our client's desire to execute said option at the expiration of the lease term, September 1, 1970.' Plaintiff contends that these words comprise a valid exercise of her purchase option. She asserts that...