Ide v. Leiser
| Decision Date | 23 July 1890 |
| Citation | 24 P. 695,10 Mont. 5 |
| Parties | IDE v. LEISER. |
| Court | Montana Supreme Court |
Appeal from district court, Lewis and Clarke county; WILLIAM H HUNT, Judge.
The plaintiff pleads the following instrument in writing The complaint further sets forth that on October 11, 1889, the plaintiff tendered defendant $1,000, and demanded a conveyance of the property. That defendant refused to give the conveyance and still refuses. That plaintiff is still willing to pay said $1,000. Plaintiff demands judgment that defendant make conveyance to him of the real estate described. The defendant demurred to the complaint on the ground that it did not set forth facts sufficient to constitute a cause of action. Demurrer was sustained, and judgment entered for the defendant. Plaintiff appeals from the judgment. The question raised by the record, and discussed by counsel, is whether the instrument in writing pleaded, and the tender of $1,000 by plaintiff to defendant October 11, 1889, are sufficient to entitle plaintiff to a conveyance as demanded. No tender of money or demand for a deed was made during the 10 days limited in the original instrument; but were made during the period defined in the extension indorsed on the instrument.
A. C. Botkin, for appellant.
McCutcheon & McIntire, for respondent.
DE WITT, J., (after stating the facts as above)
For convenience of terms we will designate the original document pleaded as the first instrument, and the option therein as the first option, and the indorsement extending the time as the second instrument and option. We will not discuss the validity of the first instrument as a foundation for an action for specific performance. We will assume, for the purpose of this decision, that it is good. The option assumed to be granted therein was not exercised within the time limited, and expired October 4. The consideration for this option was one dollar, whether paid by Ide to Leiser, or still a debt owing from Ide to Leiser, is immaterial. That consideration was exhausted by the expiration of the option on October 4. Ide paid his money, the one dollar, and received his goods, the option. Leiser took the one dollar and delivered a consideration therefor, viz., the option. The transaction was complete, and the terms performed by each party to the agreement.
We come to the second instrument and option. No consideration is named therein, specifically or by reference. The consideration for the first option cannot do service for the second. That consideration was functus officio in the first instrument. A consideration determined by the parties to be the consideration for the sale of one article on one day, and so declared in writing, cannot, in the face of such declaration, be construed by the court as a consideration for the sale of another article on another day. The first 10 days' option was a thing of value, and paid for as such. The second was another separate valuable article. Was there any consideration for its sale? We believe the same definitions and distinctions will aid this discussion. There may be (1) a sale of lands; (2) an agreement to sell lands; and (3) what is popularly called an "option." The first is the actual transfer of title from grantor to grantee by appropriate instrument of conveyance. The second is a contract to be performed in the future, and if fulfilled results in a sale. It is a preliminary to a sale, and is not the sale. Breaches, rescission, or release may occur by which the contemplated sale never takes place. The third, an option, originally is neither a sale nor an agreement to sell. It is simply a contract by which the owner of property (real estate being the species we are now discussing) agrees with another person that he shall have the right to buy his property, at a fixed price, within a time certain. He does not sell his land; he does not then agree to sell it; but he does then sell something, viz., the right or privilege to buy at the election or option of the other party. The second party gets, in præsenti, not lands, or an agreement that he shall have lands, but he does get something of value; that is, the right to call for and receive lands if he elects. The owner parts with his right to sell his lands, except to the second party, for a limited period. The second party receives this right, or rather, from his point of view, he receives the right to elect to buy. That which the second party receives is of value, and in times of rapid inflations of prices, perhaps of great value. A contract must be supported by a consideration, whether it be the actual sale of lands, an agreement to sell lands, or the actual sale of the right to demand the conveyance of lands. A present conveyance of lands is an executed contract. An agreement to sell is an executory contract. The sale of an option is an executed contract; that is to say, the lands are not sold; the contract is not executed as to them; but the option is as completely sold and transferred in præsenti as a piece of personal property instantly delivered on payment of the price. Now this option, this article of value and of commerce, must have a consideration to support its sale. As it is distinct from a sale of lands, or an agreement to sell lands, so its consideration must be distinct; although, if a sale of the lands afterwards follows the option, the consideration for the option may be agreed to be applied, and often is, as a part payment on the price of the land. But there must be some consideration upon which the finger may be placed, and of which it may be said, "This was given by the proposed vendee to the proposed vendor of the lands as the price for the option, or privilege to purchase." We have been led into this endeavor to make clear our views of these distinctions, because, in the argument, counsel did not seem to give them as much weight as they seem to us to demand. We refer to the following authorities: Gordon v. Darnell, 5 Colo. 302; Bradford v. Foster, 87 Tenn. 4, 9 S.W. 195; Railroad Co. v. Bartlett, 3 Cush. 224; Bean v. Burbank, 16 Me. 458; De Rutte v. Muldrow, 16 Cal. 505; Johnston v. Trippe, 33 F. Rep. 530; Thomason v. Dill, 30 Ala. 444; Mers v. Insurance Co., 68 Mo. 127; Thorne v. Deas, 4 Johns. 84; Burnet v. Biscoe, Id. 235; Lees v. Whitcomb, 5 Bing. 34; Bish. Cont. §§ 77, 78; McDonald v. Bewick, 51 Mich. 79, 16 N.W. 240; Schroeder v. Gemeinder, 10 Nev. 356; Woodruff v. Woodruff, 44 N. J. Eq. 355, 16 A. 4; Perkins v. Hadsell, 50 Ill. 216; Wat. Spec. Perf. § 200.
Examine the two options granted in the case before us. L. sold I. an option for 10 days from September 24th for one dollar. He then gives an option for another 10 days from October 3d, for what? For nothing. L. transfers this option, this incorporeal valuable something, for nothing. The transfer of the option was nudum pactum, and void. But, the point just discussed being conceded, appellant still contends that this second instrument or option was a continuing offer to sell, at a given price, and was accepted by respondent before retracted, and that such acceptance, evidenced by, and accompanied with, the tender of the price, and demand for a deed, constitute an agreement to sell land, which may be enforced in equity. We leave behind now our views of options, and consideration therefor, and meet a wholly different proposition.
Reading the two instruments together we find that on October 3d L. extended to I. an offer to sell his lands at the price for $1,000. There was no consideration for the offer, and it could have been nullified by L. at any time by withdrawal. But it was accepted by I., while outstanding, the price tendered, and deed demanded. It must be plain from the previous discussion that we do not hold that the offer, when made, or at any moment before acceptance, was a sale of lands, an agreement to sell lands, or an option. But upon acceptance and tender was not a contract completed? If one person offers to another to sell his property for a named price, and while the offer is unretracted the other accepts tenders the money, and demands the property, that is a sale. The proposition is elementary. The property belongs to the vendee, and the money to the vendor. Such is precisely the situation of the parties herein. L. offered to sell for $1,000, I. accepted, tendered the price, and demanded the property. Every element of a contract was present, parties, subject-matter, consideration, meeting of the minds, and mutuality. And as to the matter of mutuality we are now beyond the defective option. We have simply an offer at a price, acceptance, payment or tender, and demand. That this was a valid contract we cannot for a moment doubt. In discussing a transaction of this nature, in Gordon v. Darnell, 5 Colo. 304, BECK, C.J., in one of his clear opinions, says: "Its legal effect is that of a continuing offer to sell, which is capable of being converted into a valid contract by a tender of the purchase money, or performance of its conditions, whatever they may be, within the time stated, and before the seller withdraws the offer to sell." LURTON, J., in Bradford v. Foster, 87 Tenn. 8, 9 S.W. 195, says: ...
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