Rease v. Kittle.

• Decision Date: 22 November 1904
• Citation: 56 W.Va. 269
• Court: West Virginia Supreme Court
• Parties: Rease v. Kittle.

56 W.Va. 269

Rease

v.Kittle.

Supreme Court of Appeals of West Virginia.

Submitted June 17, 1904

Decided November 22, 1904.

1. Contract Continuing Offer.

A contract in writing by which one party, for a valuable consideration, agrees to sell and convey to the other, a tract of land for a specified price within a certain time thereafter, the whole amount of the purchase money to be paid in cash within such time, and, on failure to take and pay for the land within the time stipulated, the contract to be void, is a continuing offer to sell, and not revocable within the time limited. (p. 278).

2. Contract Option Assignment.

Before payment or tender of the purchase money within the time stipulated, such contract does not vest in the person to whom the offer of sale is made any title to the land, either legal or equitable, and his assignment of his rights under the contract passes no title to the assignee. (p. 279).

3. Contract Contract not Assignable.

When such offer is made to a particular person, and not to the party and his assigns, it; can be accepted and enforced by him alone, and an assignment thereof to a third party bestows no right upon the assignee to convert the offer into a contract of sale by tender, or payment, of the purchase money. (p. 279).

4. Contract Verbal Acceptance of Contract.

Verbal acceptance of such contract without payment or tender of the purchase money, within the time limited, is not sufficient to convert the offer into a contract of sale. (p. 280).

Appeal from Circuit Court, Barbour County. Action by F. p. Rease against C. B. Kittle and others. Decree for plaintiff, and defendant 0. C. Womelsdorf appeals.

Reversed.

W. B. Maxwell, for appellant.

J. B. Ware and Fred 0. Blue, for appellee.

poefenberger, president:

The principal inquiry in this case is whether a continuing offer in writing under seal, to sell land, irrevocable because based upon a valuable consideration, and made to a particular person, vests in that person an equitable title to the land which he can convey to a third person or is capable of assignment to such third person.

C. B. Kittle executed and delivered to J. E. Howell such a contract which reads as follows, omitting formal parts and descriptions of the land: "That the aforesaid C. B. Kittle has this day agreed to give the aforesaid J. E. Howell, an option on a certain tract of land hereinafter described and bounded, containing fifty acres for the sum of $17.50-100 per acre, of which $1.00 cash in hand is paid the recipt of which is hereby acknowledged. Now is the aforesaid J. E. Howell pays the aforesaid C. B. Kittle the aforesaid sum of money before the exposition of 5 yrs. from this date, the aforesaid C. B. Kittle binds himself to make the aforesaid J. E. Howell a general warranty deed for the aforesaid tract of land hereinafter described. And it is further agreed that in case the aforesaid J. E. Howell fail to pay the aforesaid C. B. Kittle, the aforesaid sum of money before the expiration of five years from this date, then this contract is to be void."

Before the expiration of the time limit fixed by this paper Kittle conveyed the land to O. C. Womelsdorf by deed dated September 2, 1809, reciting a cash consideration of one thousand dollars. On. the l2th day of February, 1900, Howell executed and delivered to F. P. Rease, a paper purporting to assign all his right to purchase said land, and all rights pertaining to said option, and further stipulating that whenever Howell should settle with Kittle, the amount due Kittle, about ninety dollars, should be paid Howell by Eease. On or about the 16th of November, 1900, Eease sent his agent to Kittle to close the option and pay the purchase price of the land, but the latter refused to accept the money or to make a deed, and Eease caused a written notice of his claim under the assignment from Howell, his own acceptance of the option according to its terms and his readiness and willingness to make payment of the purchase money, to be served on Kittle on the 16th day of November, 1900. Immediately afterwards, Rease brought this suit in equity to compel specific performance of the alleged contract, making Kittle, Womelsdorf, Howell and certain creditors of Kittle defendants, and the court granted the relief prayed for.

Some other features of the ease, based upon facts not yet stated, will be noticed later on, as upon mature consideration they arc considered insufficient to change the case as stated. They are postponed to avoid possibility of confusion in the discussion of the main question which is one of great importance in this State where so much valuable property is constantly changing hands under instruments similar in character and form to the one above described.

That this contract, if such it may be termed, without acceptance in the manner therein prescribed, namely, payment of the whole amount of purchase money within the time limited, for it expressly says that if full payment is not made within that time, it shall be void, is a unilateral contract, binding only one party, and giving him no right of action in any event against the other party, seems to admit of no doubt. It is a mere offer on the part of Kittle to sell at a certain price at any time within five years, and it does not bind him to convey except upon payment of the entire purchase money. It contains no covenant on the part of Howell to take the land within the period of five years or at any other time. His failure to do so gives no right of action for damages nor can the contract be enforced against him in equity. It is well settled that ordinarily a court of equity will not compel specific performance of a contract when the agreement is of such nature that an action at law will not lie for damages for a breach of it. 5 Tern. Abr. 537. There are some exceptions to this rule in favor of contracts peculiar in their nature. Where the option is founded upon a valuable consideration, the holder of it may compel performance of the offer although there is no covenant on his part to take and pay for the property. Illustrations of this are found where a lease is taken which contains a stipulation providing that, at any time during the lease or at its expiration, the lessee shall have the right to purchase the property at a price named. By this, he is not bound to purchase and only has the privilege of doing so, but he may enforce specific performance of it by the lessor. And a purchaser of the land so leased, must take notice of this right of purchase in the optionee, for his possession is sufficient notice to put a stranger upon inquiry, and he is held to have knowledge of all rights on the part of the tenant which reasonable inquiry would have disclosed. Kerr v. Day, 14 Pa. St. 112, citing numerous English and American cases. "It is now well settled that an optional agreement to convey or renew a lease, without any covenant or obligation to purchase or accept, and without any mutuality of remedy will be enforced in equity, if made upon proper consideration, or forms part of a lease or other contract between the parties that may be the true con- sideration for it." Hawralty v. Warren, 3 C. E. Green (N. J.) 124, (90 Am. Dec. 613); Backhouse v. Mohlen, 3 Johns. 434; Seton v. Slade, 7 Ves. 265; Fowle v. Freeman, 9 Ves. 351; Western v. Russell, 3 Ves. & B. 192; Aormand v. Anderson, 2 Ball & B. 350; Cloason v. Bailey, 14 Johns. 484; Street Railway Co. v. Spenser, 156 Pa. St. 85, (36 Am. St. 22); House v. Jackson, 24 Ore. 89; Souffrain v. McDonald, 27 Ind. 269; Stansbury v. Fringer, 11 Grill & John. (Md.) 149; Maughlin v. Perry. 35 Md. 353.

This apparent exception to the rule, harmonizes with other principles of the law, concerning rights founded upon consideration. Thus, a license coupled with an interest is irrevocable, while one unconnected with any interest on the part of the licensee is always revocable. An agency coupled with an interest is also irrevocable, but if the agent has no interest in the business his powers may be cut off at any time. A man may be willing to take a lease with the privilege of the purchase of the property, or a renewal of the lease but unwilling to accept it in any other way. The option of purchase inserted in the lease is the inducement to the contract on both sides. Without it the owner is unable to procure a contract of lease, and but for it, the lessee would not take the property. His purpose may be to build up a mercantile or other kind of business with a view to permanent location, if he succeeds, and, with the intention to purchase, if he does succeed, and the wish to be free to abandon the property at the end of his term, if his experiment should prove to be unsuccessful. It is a partially executed contract so far as he is concerned, for by taking the lease, he has paid for that right of purchase and, having secured it, may exercise it or abandon it at his pleasure. In Stansbury v. Fringer, 11 Gill. & John. 149, the court say: "When a contract consists of several distinct and separate stipulations on one side, and a legal consideration is stated on the other, it must be considered that the entire contract was in the contemplation of the parties in each particular stipulation, and formed one of the inducements therefor, and no one stipulation can be supposed to result from, or compensate for the consideration, or any portion of it, exclusive of other stipulations, unless the parties have expressly so declared."

In Benedict v. Lynch, 1 John Ch. 370 (7 Am. Dec. 484,) Chan- cellor Kent said: "It has been ruled in several cases, Armiger v. Clarke, Bunb. Ill.; Bromley v. Jeffries, 2 Vern. 415, that a bill for specific performance will not be sustained, if the remedy be not mutual, or where one party only is bound by the agreement. This doctrine received a very clear illustration, and an explicit sanction in a late decision by Lord Redesdale, Lawren- son v. Butler, 1 Schoale & Lefroy 13. Though there are other cases in which an...