Lauderdale Power Co. v. Perry

• Decision Date: 28 November 1918
• Docket Number: 8 Div. 82
• Citation: 80 So. 476,202 Ala. 394
• Parties: LAUDERDALE POWER CO. v. PERRY.
• Court: Alabama Supreme Court

80 So. 476

202 Ala. 394

LAUDERDALE POWER CO. v. PERRY.

8 Div. 82

Supreme Court of Alabama

November 28, 1918

Appeal from Circuit Court, Lauderdale County; C.P. Almon, Judge.

Bill by the Lauderdale Power Company against F.M. Perry. Decree of dismissal, and complainant appeals. Affirmed.

R.T Simpson, of Florence, and John S. Stone, of Birmingham, for appellant.

Mitchell & Houghston, of Florence, for appellee.

THOMAS J.

The purpose of the bill is to secure specific performance of a contract, and damages for its breach.

We will not discuss assignments of error relating to the introduction of evidence, where not argued. Georgia Cotton Co. v. Lee, 196 Ala. 599, 603, 72 So. 158; Johnson v. State, 152 Ala. 93, 44 So. 671; Republic I. & S. Co. v. Quinton, 194 Ala. 126, 69 So. 604; W.U. Tel. Co. v. Benson, 159 Ala. 254, 264 273, 48 So. 712.

The original contract of July 3, 1914, related to a sale of the lands in question; and there were several modifications and extensions thereof, to and including that of February 16 1916, wherein is used the expression, "If this money is not paid within fifty days this proposition is void." Complainant insists that by this the parties entered into a contract of sale, and not one of mere option to purchase the lands; that under the pleading and the evidence specific performance of such modified contract may be compelled by a court of chancery, which, assuming jurisdiction for this purpose, will proceed to a decree for the damages shown to have proximately resulted to complainant by reason of respondent's breach.

There is no doubt of the jurisdiction and right to exercise such power by a court of equity, where the law and justice of the case require. Masberg v. Granville, 75 So. 154, 157; Hicks v. Meadows, 193 Ala. 246, 255, 69 So. 432; A., T. & N. Railway Co. v. Aliceville Lumber Co., 74 So. 441, 445; Whaley v. Wilson, 112 Ala. 627, 631, 20 So. 922; Hundley v. Harrison, 123 Ala. 292, 26 So. 294; Tygh v. Dolan, 95 Ala. 269, 10 So. 837; Marshall v. Marshall, 86 Ala. 383, 5 So. 475; Stow v. Bozeman's Ex'rs, 29 Ala. 397, 402, 403; Sims' Ch.Pr. §§ 20-24.

The original contract and its several modifications or extensions, photographs, plats, and profiles, are made exhibits to pleadings or to the depositions of witnesses.

This court has made a distinction between (1) a sale of lands where the present conveyance thereof becomes the executed contract, and (2) an agreement to sell lands by a contract to be performed in the future and if fulfilled results in a sale; and (3) what is generally called an "option"--which is originally neither a sale nor an agreement to sell--a contract by which the owner of property agrees with another that he will have the right to buy that property for a fixed and lawful consideration and within a certain time prescribed. Fulenwider v. Rowan, 136 Ala. 287, 303, 304, 34 So. 975; Bethea v. McCullough, 195 Ala. 480, 484, 487, 70 So. 680; Borst v. Simpson, 90 Ala. 373, 7 So. 814; T. & C.R. Co. v. East Ala. Ry. Co., 73 Ala. 426, 440.

In the Fulenwider Case, supra, it was quoted approvingly as follows (Ide v. Leiser, 10 Mont. 5, 11, 12, 24 P. 695, 24 Am.St.Rep. 17):

An agreement to sell lands 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. *** 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 praesenti, 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 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 praesenti as a piece of personal property instantly delivered on payment of the price."

This definition of an option on lands was again approved in the Bethea Case, supra, where the decision rested on the fact that the instrument there in question operated to pass title in praesenti and before the compliance with the future conditions therein provided. The court said:

"Considering the instrument now before us as an agreement to make such title as the instrument purports to pass in praesenti, the only ground of discrimination between the agreement and an option as thus defined is that, whereas an option contemplates the passing of title in futuro, this instrument witnessed an intention to vest in praesenti, an estate in fee subject to be defeated upon condition. *** Recurring then to the definition of an option in Fulenwider v. Rowan, and looking to the substance of things, rather than to mere form, we have been unable to settle upon any essential difference between the right of Bethea during the agreed life of his option and that of an optionee, commonly so called, whose contracts courts of equity are accustomed to enforce." Masberg v. Granville, supra.

General authorities on the subject are collected in Pollock v. Brookover, 60 W.Va. 75, 53 S.E. 795, 6 L.R.A. (N.S.) 403; Bowen v. Lansing, 57 L.R.A. 651, notes; Worthing Corporation v. Heather, 4 British Rul.Cas. 280-293.

On authority of the Fulenwider, and other cases, it was recently observed that whether parties to a contract have stipulated for dependent or independent covenants, in respect to the obligations assumed thereunder, is a matter of common intention of the parties to be collected from the instrument itself, "together with the circumstances surrounding the parties at the time and those attending the engagement they make, and in the light of the common sense of it." Jones v. Lanier, 73 So. 535; McCormick v. Badham, 191 Ala. 339, 343, 67 So. 609; First National Bank of New Brockton v. McIntosh, 79 So. 121. When the several written instruments in question are so considered, if the parties have made time the essence of the contract, in which payments are to be made or in which to commence actual operation in the development of the middle water power and to continue that development "until the same is completed," in order to make available to the power company the right secured by the contract, it is necessary that the acts on its part therein stipulated to be done should have been performed within the time required, or have been commenced and in good faith developed or prosecuted to the end that the contract be completed. Fulenwider v. Rowan, supra; Acker v. Bender, 33 Ala. 230; Larry v. Brown, 153 Ala. 452, 458, 44 So. 841; Lowy v. Rosengrant, 196 Ala. 337, 71 So. 439, 442, 443; Lysle Milling Co. v. North Ala. Grocery Co., 77 So. 748; Terrell v. Nelson, 177 Ala. 596, 58 So. 989. It has been held, of the time of payment and of the doing of the required acts, under the contract provided for the benefit of the party granting the option, that such conditions precedent are subject to waiver by the party for whose benefit they were inserted. Appellant's position as to this is that the contract here was not a mere option; but that, should it be held to be an option, its conditions precedent were waived by the party of the first part. Lowery v. Peterson, 75 Ala. 109, 113; Garrison v. Glass, 139 Ala. 512, 517, 36 So. 725; Larry v. Brown, supra.

The original contract (of July 3, 1914) recited a nominal consideration paid, and the further consideration that the said N.F. Thompson "will bring to the attention of capitalists the above-mentioned water power, and that he will proceed at once to develop the water power and get ready to subdivide said lands," and within four months from the date of the instrument "commence actual operations in developing the water power, that is the middle power, and to continue to develop until the same is completed."

The purchase price for the land was fixed at $40 per acre to be paid within three years from date of contract, with interest thereon until paid; said Perry agreeing "to make a deed with general warranty to the said lands when all the purchase money is paid." A stipulation as to time of payment was that--

"If within three years from this date, there has been paid on account of this purchase twenty-five thousand dollars, then the time of the payment of the balance shall be extended for two years, it being fully understood that the interest on this entire purchase is to be paid annually on the third day of July each year."

By way of an addendum to this contract, and of same date, a further provision is made for the release of certain of the lands when sold by Thompson at the rate of $40 per acre, and the significant provision added that--

"If actual work has not commenced on the development of the water power herein stipulated within the period of four months, then this contract shall be null and void and no damages shall accrue to the said N.F. Thompson and his associates."

On the 7th day of August, 1914, the parties executed a further instrument reciting omissions from the original contract together with desired changes, securing to Perry the right of removal from the flouring mill the machinery, engine, boiler and fixtures, and also the sawmill; with the provisions that if at the end of three years one-half of the purchase price, at the rate of $40 per acre, should be paid by the said Thompson and his associates,...