Myers v. J.J. Stone & Son

• Decision Date: 13 February 1905
• Citation: 102 N.W. 507,128 Iowa 10
• Parties: W. T. MYERS, Appellant, v. J. J. STONE & SON, J. J. STONE and ARTHUR STONE
• Court: Iowa Supreme Court

102 N.W. 507

128 Iowa 10

W. T. MYERS, Appellant, v. J. J. STONE & SON, J. J. STONE and ARTHUR STONE

Supreme Court of Iowa, Des Moines

February 13, 1905

Appeal from Appanoose District Court.--HON. O. W. VERMILLION, Judge.

THE plaintiff executed two leases of land to McDonald for farming and the mining of coal for a term of three years beginning October 1, 1901, and on the 5th of March, 1902, the latter assigned his interest therein to the defendants. This action was begun in February, 1903, and raises the issues discussed in the opinion. The court found that plaintiff had waived the strict performance of the contracts, and was estopped from objecting to the assignment of the leases, and from saying defendants were not entitled to exercise the option of purchasing the premises. The plaintiff appeals.

Reversed.

C. F Howell, L. C. Mechem, and W. R. C. Kendrick, for appellant.

H. E Valentine, for appellees.

LADD J. DEEMER, J., dissenting.

OPINION

LADD, J.

The term of plaintiff's leases of the land in controversy to McDonald, subsequently assigned by him to defendants, expired October 1, 1904. Prior to the beginning of this action, performance had not been in strict compliance with the conditions of the contracts, but a careful examination of the record has convinced us that the breaches, such as might have entitled plaintiff to a forfeiture, were waived, and that plaintiff is estopped from objecting to the assignment. No doubtful proposition of law is involved in these issues, and a review of the evidence bearing thereon would serve no useful purpose.

II. Aside from claiming the benefits of the leasehold, the defendants insist that they also acquired the privilege to exercise the option of purchasing the premises. Among other things, the principal lease provided that "If the party of the second part shall fully comply with each and every covenant and agreement contained in this lease and the coal lease as aforesaid named, the said second party, but no other person, shall then at the time of the expiration of this lease, and not thereafter, have the option of purchasing the land herein leased including all the coal thereunder and the coal underlying the north 10 acres of the northwest 1/4 of the northwest 1/4," describing it, and fixed the price to be paid. Generally an option may be defined as a contract by which an owner agrees with another person that he shall have the privilege of buying his property at a fixed price within a specified time. Ide v. Leiser, 10 Mont. 5 (24 P. 695, 24 Am. St. Rep. 17). It is neither a sale of land nor an agreement to sell, but merely the disposal of the privilege of electing to buy at a fixed price within the time limited. The other party acquires no land, nor interest in land, not even a chose in action, prior to his election, but he does obtain, what is often of much value, the privilege, at his election, to demand and receive the conveyances of land. The nature of such a contract was pointed out in Sweezy v. Jones, 65 Iowa 272, 21 N.W. 603, where the court, speaking through Adams, J., said: "The person holding the right of option is not a purchaser. He becomes such only by exercising his right of option, and not until he becomes a purchaser does he acquire anything which a court of law or equity can recognize. We do not think, indeed if Jones had had nothing more than a mere right of option not exercised, that it would have been claimed that he had anything that could have been sold upon execution." This was followed in Conn v. Tonner, 86 Iowa 577, 53 N.W. 320, in holding that a mortgage of the leasehold did not cover the lessee's option to purchase. See, also, Newton v. Newton, 11 R.I. 390 (23 Am. Rep. 476). In its very nature an option is subject to such limitations as the owner may impose. He may make its exercise dependent upon the performance of conditions precedent contained in the same contract, as of a lease; or, for reasons...