Tate v. Wood
| Decision Date | 19 March 1982 |
| Docket Number | No. 14914,14914 |
| Citation | 169 W.Va. 584,289 S.E.2d 432 |
| Court | West Virginia Supreme Court |
| Parties | Delmer TATE, et al. v. W. Austin WOOD. |
Syllabus by the Court
An option to purchase is not a sale nor agreement to sell: it becomes an executory contract only when properly accepted within the stipulated time.
J. M. Tully, Summersville, for appellants.
Donald K. Bischoff, Summersville, for appellee.
Delmer and Thelma Tate rented a Nicholas County house and lot from W. Austin Wood in August, 1977, agreeing to a one-year lease that required $200 monthly payments and contained an option to purchase at anytime during the year for $29,500, with credit on the purchase price for half of the rental payments. If the Tates did not purchase, Wood was to pay them half the cost of property improvements they made. They were to insure the premises with loss payable to Wood.
During the lease term Delmer and Thelma made substantial improvements and paid $2,400 rent. They failed to obtain insurance, but Wood did, and when the lease expired in September, 1978, he wrote them asking for reimbursement.
That letter, dated September 19, 1978, included:
I will be willing to extend this Lease & Option for another 30 days under the folling [sic] conditions.
B. (1) 1 months rent in advance 200.00
(2) Payment on note due Sept
15, 1978 k100.00
(3) Payment for insurance
(1 yr. $30,000.00 coverage) 178.00
(4) Payment for county taxes
(1 year) 351.26
-------
Total 829.26
The insurance and county taxes was a part of the original lease & option.
W. Austin Wood
Items 2, 3 & 4 are not due unless loan is approved and papers signed.
Tate did not secure financing by mid-October, so Wood's lawyer sent him an eviction notice. On November 17, 1978, Wood, through his lawyer, again wrote Tate:
In any event, I have gotten Mr. Wood to agree to give you another 30 days to apply for and get your loan, and if you are successful in getting the loan, then he will not require you to pay Items 3 and 4 in the letter which he sent you of September 19, but does require that you pay the other items listed above within the 30 day period.
That day the house burned. Three days later Tate received this letter. Wood settled his insurance claim for $30,045.10.
The Tates sued Wood for $12,578.80, being the cost of improvements plus $2,400 in rent payments, or alternatively $1,200, half the rental payments; and to compel transfer of the property and for the difference between the option price and the insurance proceeds. Wood counterclaimed for holdover rent ($400), taxes ($351.26), and furniture he sold Tate ($500), totaling $1,251.26. The trial judge determined that the Tates had not exercised their option and were limited to recovering one-half of their improvement costs; and although they were not by his ruling prevented from proving their improvement expenditures, they refused to do so. He granted summary judgment for Wood for $900, who chose not to present evidence about the taxes owed.
The Tates' option to purchase was extended for thirty days by the November 17th letter. 1 But "[a] mere option to purchase vests no right until accepted." Dyer v. Duffy, 39 W.Va. 148, 19 S.E. 540, 543 (1894), and Syllabus Point 2. An option to purchase is not a sale nor agreement to sell: it becomes an executory contract only when properly accepted within the stipulated time. Pollock v. Brookover, 60 W.Va. 75, 53 S.E. 795 (1906), Syllabus Points 1 and 2. We explained in Pollock, supra 53 S.E.2d, at 796:
It is not a contract to sell, nor an agreement to sell, real estate, because there is no mutuality of obligation and remedy; but it is a contract by which the owner agrees with another person that he shall have the right to buy, within a certain time, at a stipulated price. It is a continuing offer to sell, which may, or may not, within the time specified, at the election of the optionee, be accepted. The owner parts with his right to sell to another for such time, and gives to the optionee this exclusive privilege. It is the right of election to purchase, which has been bought and paid for, and which forms the basis of the contract between the parties. Upon the payment of the consideration, and the signing of the option, it becomes an executed contract--not, however, an executed contract selling the land, but the sale of the option, which is irrevocable by the optionor, and which is capable of being converted into a valid executory contract for the sale of land by the tender of the purchase money, or his performance of its conditions, whatever they may be,...
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...agreement to sell: it becomes an executory contract only when properly accepted within the stipulated time." Syllabus, Tate v. Wood, 169 W.Va. 584, 289 S.E.2d 432 (1982). 5. A right of first refusal becomes an option once the holder of such right is notified by the property owner of the ter......
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...has been exercised by acceptance does it become a contract to sell") (emphasis supplied) (citation omitted); Tate v. Wood, 169 W. Va. 584, 289 S.E.2d 432, 434 (1982) ("An option to purchase is not a sale nor an agreement to sell: it becomes an executory contract only when properly accepted ......
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...S.E. 612, 161 S.E. at 613. Another case involving property subject to an option contract which was destroyed by fire is Tate v. Wood, 169 W.Va. 584, 289 S.E.2d 432 (1982). As the holders of the option had not exercised their option, the Court in Tate observed that without an executory contr......