Kay v. Spencer

• Decision Date: 27 March 1923
• Docket Number: 1043
• Citation: 29 Wyo. 382,213 P. 571
• Parties: KAY v. SPENCER
• Court: Wyoming Supreme Court

213 P. 571

29 Wyo. 382

KAY v. SPENCER

No. 1043

Supreme Court of Wyoming

March 27, 1923

APPEAL from the District Court, Big Horn County; HON. P. W. METZ Judge.

Action by Apollos W. Kay against Grace A. Spencer and another for specific performance of an agreement to lease certain realty. There was judgment for defendants and plaintiff appeals.

Affirmed.

Brome &amp Hyde, for appellant.

It was conceded at the trial that defendant Spencer signed the memorandum agreement to lease the premises to plaintiff; this agreement recited a consideration of $ 1.00 in hand paid. Granting that the consideration of $ 1.00 was not actually paid, by reason of her inability to make change, the law implies a binding promise on the part of plaintiff to pay her the sum of $ 1.00 which is a legal obligation enforcible at law. (Cummins v. Beaver, 103 Va. 230; Tucker v Woods, 12th Johns, (N. Y.) 190; Simpson v. Saunders, 130 Ga. 265; Seyferth v. Groves & L. R. R. Co., 217 Ill. 483.)

E. E. Lonabaugh, C. A. Zaring, for respondent.

The action was for specific performance of an option agreement to lease premises; defendant's answer denied payment of a consideration therefor, alleged a revocation of the option and her inability to gain possession of the premises. The evidence upon the trial shows a failure of consideration; revocation of the option; inability to gain possession from a bankrupt firm holding under a former lease.

The authorities cited by appellant do not support his contention that, even though the consideration of $ 1.00 was not paid, the law implied a promise on the part of appellant to pay it, which promise was sufficient to support the agreement; none of appellant's authorities cover the question of an entire failure of consideration. In this case the option was without consideration; it was cancelled before its acceptance; the condition in the option as to the possibility of defendant gaining possession was never capable of being fulfilled and appellant's cause is without equity. The foregoing propositions were established by the evidence, and defeat the action (Frank v. Stratford, Handcock, 13 Wyo. 37; Dickinson v. Dodds, L. R. 2 Ch. Div. 463; Litz v. Goosling, 21 L. R. A. 127; Graybill v. Brugh, 21 L. R. A. 133; 1. Elliott, Contracts, 14.) Contracts of this class differ from contracts under seal or negotiable instruments in the hands of innocent holders, where a consideration is conclusively presumed; the option was revoked before acceptance; defendant was unable to gain possession of the premises which were held under a former lease; appellant is not entitled to specific performance (3 Elliott, Contracts, 2327), since he had not complied with his part of the contract (Frank v. Stratford, supra.)

KIMBALL, Justice. POTTER, Ch. J., and BLUME, J., concur.

OPINION

KIMBALL, Justice.

Grace A. Spencer, one of the defendants, owning a lot improved by a building used in the retail mercantile business, in January, 1919, leased the property to the Pratt-Mann Company for the term of five years, the lease containing a stipulation that it should not be assigned without the written consent of the lessor. In November, 1919, the Pratt-Mann Company assigned the lease to the Onken Brothers Company, the other defendant, who did not take possession of the leased premises until some time later, as will presently be stated. In March or April, 1920, the Pratt-Mann Company was adjudged bankrupt, and on June 12, following, the premises, together with the bankrupt stock of merchandise contained in the building, were in possession of the trustee in bankruptcy. On that date Mrs. Spencer signed and gave the plaintiff the following instrument which describes the lot in question:

"Greybull, Wyoming,

June 12, 1920.

In consideration of the sum of $ 1.00 in hand paid I hereby agree to lease to A. W. Kay, for five years with the privilege of ten at a monthly rental of Two Hundred Dollars ($ 200.00) per month payable monthly in advance, the following described premises, to-wit: Lot Seven (7) in Block Four (4) in the original town of Greybull, Big Horn County, Wyoming, subject to the condition that possession of said premises can be obtained and the said possession delivered to the said A. W. Kay as soon as the same can be obtained, it being understood that the bankrupt firm of Pratt-Mann Company have an unexpired lease, and this option is given subject to any rights they may have.

Grace A. Spencer, Owner."

It was shown at the trial that the consideration of one dollar mentioned in this writing was not in fact paid, and the plaintiff did not claim that it was. The testimony of Mrs. Spencer, which may be accepted on this point, was to the effect that Kay produced a five or ten dollar bill and asked her if she had any change, and on her replying that she did not, he retained the money and took away the paper. There was no attempt on the part of the plaintiff to prove any other consideration, or that it was intended that he pay the dollar at a later date.

At this time Mrs. Spencer had not consented to the assignment of the lease by the Pratt-Mann Company to the Onken Brothers Company, and probably had no knowledge of it. Later, the latter company, intending to buy the bankrupt stock, and the trustee, desiring to make the sale, became anxious to have Mrs. Spencer accept this company as her tenant. Being importuned to that end, she seems to have become convinced that either the trustee or the Onken Brothers Company would resist any effort on her part to regain possession of the leased premises, and in August, 1920, being then unwilling to make a lease to the plaintiff and convinced that she was not bound to do so by the writing of June 12, she informed him that she considered that writing null and void.

The sale of the bankrupt stock of merchandise by the trustee to Onken Brothers Company was consummated about September 18, 1920, and then or shortly thereafter the purchaser took possession of the leased premises with the consent of Mrs. Spencer. A few days later the plaintiff demanded of her a lease in accordance with the writing of June 12, which she refused to give, and tendered her the first month's rent which she declined to accept. Thereupon the plaintiff brought this suit for the specific performance of a claimed contract to lease and for damages caused by the delay. The judgment was for the defendants and the plaintiff appeals.

The most that is claimed for the writing of June 12 is that it gave the plaintiff an option to lease. It is conceded that it was at least an offer to lease. If there was a consideration for holding the offer open for a time, and the offer was accepted before the expiration of that time, there was then a contract to lease. If, on the other hand, the offer was without any consideration which bound the defendant to hold it open, it could be withdrawn by her by notice to the plaintiff at any time before it was accepted. (Weaver v. Burr, 31 W.Va. 736, 8 S.E. 743; Frank v. Stratford-Handcock, 13 Wyo. 37, 77 P. 134.) There are a few cases holding that a nominal consideration for the giving of an option will not prevent the withdrawal of the offer before acceptance. (Murphy v. Reid, 125 Ky. 585, 101 S.W. 964; Bryant Lumber Co. v. Wilson, 151 N.C. 154, 65 S.E. 932.) It is not necessary to decide that question at this time, and for the purposes of the case at hand we assume that the consideration of $ 1.00, if paid or promised, was sufficient to support the option contract.

The plaintiff contends that the option was given for a consideration and therefore was a contract whereby Mrs. Spencer was bound to keep her offer open until the termination of the tenancy of the Pratt-Mann Company, and that by his demand for a lease and tender of rent at that time the offer was accepted by him and a contract thus perfected by which Mrs. Spencer became bound to give him a lease according to the terms of the writing. The defendants contend that there was no consideration for the option and it was therefore merely a revocable offer, which was withdrawn before acceptance by notice from Mrs. Spencer to plaintiff that she was unwilling to contract with him and considered the option null and void.

The plaintiff's argument here is confined to the point raised by the conflict in these...