Shull v. Lawrence

• Decision Date: 05 December 1919
• Citation: 186 P. 246,32 Idaho 527
• Parties: JOHN SHULL, Respondent, v. ANDREW T. LAWRENCE and GEORGE H. LAWRENCE, Appellants
• Court: Idaho Supreme Court

186 P. 246

32 Idaho 527

JOHN SHULL, Respondent, v. ANDREW T. LAWRENCE and GEORGE H. LAWRENCE, Appellants

Supreme Court of Idaho

December 5, 1919

VENDOR AND PURCHASER-OPTION CONTRACT-TENDER.

1. Where a vendor grants an option for the purchase of certain lands, the purchase price to be paid in instalments, and after giving the option the vendor encumbers the land with a mortgage and agrees with the holders of the option that the assumption of the mortgage indebtedness shall be considered a part payment of the purchase price of the land, without specifying in the agreement upon which of the instalments of the purchase price it shall be applied, the holders of the option, upon electing to purchase the property, may make application of the payment made by the assumption of the mortgage indebtedness upon such instalments of the purchase price as they may direct.

[As to rights of parties under optional contract for purchase of land where land is subject to encumbrance not provided for in contract, see note in Ann.Cas. 1913E, 923.]

2. A formal tender of performance by a purchaser is unnecessary and an offer, together with readiness and ability on his part to perform, is sufficient where the obligations of the vendor and purchaser are mutual and concurrent, and the vendor refuses to perform his part of the contract except upon a condition which is repugnant to the terms thereof.

APPEAL from the District Court of the Sixth Judicial District, for Bingham County. Hon. Robert M. Terrell, Presiding Judge.

Action for possession of real property. Judgment for plaintiff. Reversed.

Reversed and remanded. Costs awarded to appellants.

Wm. A Lee and Holden & Holden, for Appellants.

If respondent drew said option contract with the intention of having appellants understand by its terms that the money which he was to receive from the Devereaux Mortgage Co., was to be applied as a first payment on the purchase price of the land in question and it is capable of such construction, appellants are entitled to have it so construed, even though respondent intended that the language he employed should mean that said money was not to be applied on appellants' first payment. (Case note to Inman Mfg. Co. v. American Cereal Co. (Iowa), 8 L. R. A., N. S., 1140, and authorities cited; Laidlaw v. Marye, 133 Cal. 170, 65 P. 391; Blankenship v. Decker, 34 Mont. 292, 85 P. 1035; Schroeder v. Nielson, 39 Neb. 335, 57 N.W. 993; People's Bldg. etc. Assn. v. Klauber, 1 Neb. (Unof.) 676, 95 N.W. 1072; Patterson v. Humboldt First Nat. Bank, 78 Neb. 228, 110 N.W. 721; Carlson & Hanson v. Holm, 2 Neb. (Unof.) 38, 95 N.W. 1125; Portland Iron Works v. Willett, 49 Ore. 245, 89 P. 421, 90 P. 1000.)

D. E. Rathbun and J. M. Stevens, for Respondent, cite no authorities.

RICE, J. Morgan, C. J., and Budge, J., concur.

OPINION

RICE, J.

This is an action to obtain possession of real property. On May 17, 1915, respondent John Shull, by a contract in writing, granted to appellants, Andrew T. Lawrence and George H. Lawrence, an option to purchase the land in question, the right to purchase under the option to be exercised within one year from the date of the instrument. The option contained the following paragraphs:

"It is further understood and agreed that if all or any portion of the land are purchased under this option that the said John Shull will carry three-fourths of the average price per acre as a loan upon the said tract so purchased for one, two or three years to accommodate the said second party, and shall let and lease the said land for the present crop season under terms to be agreed upon and expressed therein in the lease drawn for the purpose. . . .

"Second parties now being in possession of and cultivating the said lands, it is agreed that they shall continue the cultivation and raising of the said crop and enjoy the proceeds thereof providing, that said second parties shall give to said first party a crop mortgage to secure the payment of the taxes and water assessments for the year 1915, which amount is to be represented by note due December 1, 1915."

On Sept. 7, 1915, respondent being desirous of obtaining a loan upon the lands to be secured by a mortgage thereon, two agreements in writing were executed by respondent, appellants and the Devereaux Mortgage Company, an Oregon corporation, which recited the existence of the option above referred to, and by which appellants authorized and consented to the execution of the mortgage. The agreements were identical, except as to the description of the land, and each contained the following provisions:

"It is further understood and agreed by and between the parties hereto that in event the parties of the second part [appellants] exercise the privilege granted them in the option as aforesaid, and purchase from party of the first part [respondent] the above described property, or any part thereof, or in event they acquire title to said property or any part thereof, they will buy or acquire title to said property subject to said mortgage lien, and the conditions therein set forth, assuming and agreeing to pay the said loan. . . .

"And it is further understood and agreed that in event parties of the second part exercise their option as aforesaid, the party of the first part will take and consider the assumption of the parties of the second part of said mortgage indebtedness, or so much thereof as may remain unpaid, interest included, at the time said option is exercised, as part payment on the purchase price as provided in said option."

Appellants occupied the premises during the season of 1915 under a lease as provided for in the option, which lease expired March 1, 1916. Prior to the said date, respondent served notice on appellants that he would require possession of the land at the expiration of the lease. Appellants, however, continued in possession, and on May 13, 1916, notified respondent in writing that they elected to exercise the right to purchase granted them by the option. This notice contained the following:

"You are hereby notified that the undersigned, Andrew T. Lawrence and George H. Lawrence, have heretofore elected and do now elect to exercise a certain option given them in writing on or about the 17th day of May 1915, by you the said John Shull as first party, and the said Andrew T. Lawrence and George H. Lawrence as second parties, to purchase from you, the said John Shull, the following described lands, and the whole thereof, to-wit: (Here follows description of the land).

"And said Andrew T. Lawrence and George H. Lawrence hereby further notify you that they are ready and willing to meet all of the terms and conditions of said option contract, that is to say, they are ready to execute all contracts and agreements required on their part by said option contract.

"And you are further notified that said undersigned parties, and each of them, having heretofore, to-wit, on or about the 7th day of September, 1915, paid, or caused to be paid to you the said John Shull upon the purchase price of said first above described premises, the same being the premises commonly known as the Andrew T. Lawrence farm, the sum of $ 9900, by reason of a certain loan made upon said premises by the Devereaux Mortgage Company, a corporation; and also paying, or causing to be paid to you, the said John Shull upon the purchase price of said second above described premises, the same being the premises commonly known as the George T. Lawrence farm, the sum of $ 6600 by reason of a certain loan made upon the said second above described premises, the same being furnished by the said Devereaux Mortgage Company, aforesaid.

"Said contract, among other things, provides that in the event the parties of the second part (they being Andrew T. Lawrence and George H. Lawrence) exercise the privilege granted them in the option aforesaid (that is the option of May 17th, 1915) and purchase from party of the first part (that being the said John Shull) the above described property, or any part thereof, or in event they acquire title to said property or any part thereof, they will buy or acquire title to said property subject to said mortgage lien and the conditions therein set forth, assuming and agreeing to pay the said loan, and aggregating the sum of $ 9900 on the first described premises and $ 6600 on the second tract, together with the interest due and to grow due thereon;

"And it is further understood and agreed that in the event parties of the second part exercise their option as aforesaid, the party of the first part will take and consider the assumption of the parties of the second part of said mortgage indebtedness, or so much thereof as may remain unpaid, interest included, at the time said option is exercised, as part payment on the purchase price as provided in said option, etc.

"And that the said Andrew T. Lawrence and George H. Lawrence do hereby tender a full performance on our part of all of the additional terms, conditions and requirements on our part to be kept and performed, as expressed in said option contract of May 17th, 1915, and said supplemental agreements made and entered into by each of us severally on or about the 17th [7th] day of September, 1915, said last mentioned contracts being made in triplicate and entered into between you the said John Shull as party of the first part, and we the said Andrew T. Lawrence and George H. Lawrence as parties of the second part, and the Devereaux Mortgage Company as party of the third part,...