Master Laboratories v. Chesnut

• Decision Date: 02 November 1951
• Docket Number: No. 32983,32983
• Citation: 49 N.W.2d 693,154 Neb. 749
• Parties: MASTER LABORATORIES, Inc. et al. v. CHESNUT et al.
• Court: Nebraska Supreme Court

Page 693

49 N.W.2d 693

154 Neb. 749

MASTER LABORATORIES, Inc. et al. v. CHESNUT et al.

No. 32983.

Supreme Court of Nebraska.

Nov. 2, 1951.

Syllabus by the Court.

1. It is implied in a contract to convey real estate, unless differently agreed, that a seller will convey a good or marketable title.

2. Options are strictly construed and are not extended beyond the express provisions thereof.

3. The acceptance of an offer to buy or sell real estate must be an unconditional acceptance of the offer as made; otherwise no contract is formed. There must be no substantial variation between the offer and the acceptance. If the acceptance differs from the offer or is coupled with any condition that varies or adds to the offer, it is not an acceptance, but is a counter proposition.

4. An offer contained in an option for the sale of real estate, in which nothing is said as to the character of the deed by which the property is to be conveyed, when legally accepted, entitles a purchaser to a conveyance which will vest in him a good or marketable title, but in order to convey such a title it is not necessary that the conveyance be by warranty deed.

5. If an option and its acceptance are relied upon as a contract to convey real estate, the burden is upon the optionee to establish that his acceptance was unconditional and met the provisions contained in the option, neither falling short of nor going beyond the terms proposed by it. If the acceptance demands a warranty deed when the character of the conveyance to be made is not specified in the option, it is insufficient as an acceptance of the offer contained in the option.

6. A general denial is available to a defendant to challenge one or more of the elements essential to a recovery by the plaintiff, and the effect of the denial is to put the burden on plaintiff to establish by evidence the matters denied.

7. The measure of damage for breach by the landlord of a covenant to make repairs to leased premises is generally the difference between the value of the use of the premises in the condition they were contracted to be and the rental value in their actual condition. If the contract is for a particular use by the lessee, the rental for that use is the standard by which damages may be awarded, and special losses properly pleaded and proved to have been directly and proximately caused by the default of the lessor may also be recovered.

Gray & Brumbaugh, Ben F. Shrier, Fischer, Fischer & Fischer, Omaha, for appellants.

Kennedy, Holland, DeLacy & Svoboda, L. J. Tierney, Omaha, for appellees.

Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE, and BOSLAUGH, JJ.

BOSLAUGH, Justice.

Appellees sought specific performance of an option for the purchase of real estate located in the city of Omaha as set forth in a lease of the premises made to Master Laboratories by the executors of the estate of William Pfeiffer, deceased. Appellants are his devisees and the owners of the real estate. There were incidentally involved in the litigation controversies concerning repair of the building on the premises, reduced rental because of damage to the building by fire during the term of the lease, and rental income from parts of the building collected by appellants after the date appellees claim they accepted or exercised the option.

The district court decreed performance of the option by appellants and conveyance by them to appellees of the premises by warranty deed upon payment by them to the clerk of that court the amount required by the option.

The option as expressed in the lease is as follows: 'And it is further agreed that party of the second part (Master Laboratories) has the option to purchase said premises within 5 years from date hereof for $14,000.00 cash.' Appellees claimed an unconditional acceptance and offer of performance of the option. They by letter to appellants within the term of the option stated: 'Please by advised that we are hereby exercising our option under the April 1942 lease to purchase the building * * * and we stand ready to pay you $14,000.00 in cash for the same, simultaneously with delivery to us by you of warranty deed to the premises.'

The conveyance to appellees of the premises by warranty deed made and delivered by appellants was a condition and requirement of each attempted acceptance and performance of the option by appellees. A necessary interpretation of their letters is that appellees exercised the option to purchase the real estate and would pay the consideration only when and if appellants executed and delivered a warranty deed conveying the premises to them. The effort to exercise the option by negotiation and conversation with Herbert W. Fischer, who had acted as attorney for appellants in certain matters, was an offer of appellees to give $14,000.00 for a warranty deed for the premises. They were willing to pay the stated amount when a warranty deed to the premises was furnished them by appellants. In their petition appellees asserted they had exercised the option, performed all of the conditions required of them by it, had been and were willing to pay the consideration in cash, and were 'willing to receive a conveyance' of the premises; but they asked the court to require that they be given a 'sufficient warranty deed' by appellants. The offer and the proof of appellees at the trial contradicted their pleading. During the trial counsel for appellees inquired of appellants if they 'would accept the $14,000.00 for a warranty deed, which they would execute' and followed this with a statement that 'We are still ready to pay it for a warranty deed pursuant to the terms of the lease.' The testimony of appellees on this subject was strictly and precisely confined to and within the narrow limits of the inquiry and the statement of their counsel.

The express terms of the option are only that the lessee could purchase the premises within five years for a stated consideration. It is silent as to the character of the conveyance in the event the holder of the option decided to buy the property. It was implied that if the option was accepted the sellers would furnish a good title, that is, as frequently defined, a marketable title. Richardson v. Greensboro Warehouse & Storage Co., 223 N.C. 344, 26 S.E.2d 897, 149 A.L.R. 201; 49 Am.Jur., Specific Performance, § 95, p. 111; 1 Warvelle on Vendors (2d ed.), § 351, p. 412.

The inquiry important to this phase of the case is whether or not it was implied that a part or condition of an acceptance of the offer of the option by the purchaser could be that the sellers convey the premises by deed with covenants of general warranty. The terms of an option should be precisely regarded and enforced without addition or alteration. This court has adopted and applied this view. In Wright v. Barclay, 151 Neb. 94, 36 N.W.2d 645, 647, it is said: 'Options should be strictly construed and not extended beyond the express provisions thereof. If the parties desire to extend an option in a lease beyond the term thereof they can easily use language expressly so providing but the law should not do so for them.'

The exercise of an option to buy or sell real estate must be absolute, unambiguous, without condition or reservation, and in accordance with the offer made. It must not vary in any material respect from the offer either by way of omission, addition, or alteration. There must be no lack of...