Trogden v. . Williams

Connor, J., after stating the case: In the judgment rendered by his Honor he sets out, with his usual clearness, the question presented by the case agreed. First, does the will of Narcissa S. Fonville confer upon the executors the power to sell the lands in controversy? While the language of the will in regard to the disposition of the estate, endeavoring to anticipate possible or probable con *199 tingencies, is somewhat obscure, we concur with bis Honor that the executors bad the power,- under tbe will, to sell the lands. We do not attach importance to the suggested limit of three years within which they should exercise the power. In the view which we take of the case it is not material. The next question presented is: “If the power of sale is conferred by the will, does this power include the power to execute an option for ninety days? We concur with his Honor that it does not. There is a marked and well-defined distinction between a contract in which both parties are bound to sell and convey land, postponing the delivery of the deed and payment of the purchase-money until some fixed day, even when made dependent upon some condition, and a mere promise on the part of the promisor to permit the promisee to elect at the end of a fixed day whether he will at that time enter into a contract of purchase. The relative rights and obligations are entirely different and are governed by different principles. “An option is a right acquired by contract to accept or reject a present offer within a limited or reasonable time in the future.” 21 Am. and Eng. Enc. Law, 924; Silterding v. Grizzard, 114 N. C., 108; Hopwood v. McCausland, 120 Iowa, 218; Litz v. Gosling, 93 Ky., 185; 21 L. R. A., 127. The term is well defined in the case of Black v. Maddox, 104 Ga., 157, as “The obligation by which one binds himself to sell and leaves it discretionary with the other party to buy, which is simply a contract by which the owner of property agrees with another person that he shall have the right to buy the property at a fixed price within a certain time.” The agreement is, of course, invalid unless supported by a valuable consideration. We tak' it that there can be no doubt that such is the legal definition of the agreement executed by the defendants’ executors with plaintiffs on 16 January, 1905. The consideration is snffi- *200 cient to support the promise. Does the power to sell include the power to enter into an agreement not to sell to any one save the plaintiffs for ninety days, and at the end of that time to sell to no one else, provided they pay the purchase-price ? As is correctly said by his Honor, an option is easily distinguished from a contract to sell, coupled with one to buy, “and is at least temporarily destructive of the power which is said to include it. During the ninety days, if the option is valid, the power to sell is suspended and the executors have no right to accept an offer to buy the land, however advantageous it may be.” The learned counsel for plaintiffs insist that, conceding this to be true, an option, when accepted, merges into a contract. That “after the continuing offer or the option is accepted any difference between the two disappears, and the resulting contract is not affected by the nature of the antecedent offer.” 21 Am. and Eng. Enc. Law., 926. This is undoubtedly true, and this contention presents the next question stated by his Honor: “Was it sufficient within the ninety days to give notice of acceptance without tender or payment of the purchase-money?” The answer depends upon the terms of the option. The contract to purchase, by which the relation of vendor and'vendee should be established, is not to be completed by notifying the executors of acceptance of the continuing^ offer; but that if “they shall, within the time hereinafter specified, elect to purchase said land, then and in that event they shall pay” the purchase-price, etc. Instances may be found in the books wherein the option is converted into a contract by giving notice of acceptance, and it seems, answering one of the questions discussed, it is not necessary that such notice should be in writing. In tiie option before us, as we have seen, payment of one-lialf the purchase-money and securing the other half con *201 stitute the method of electing to purchase. In Weaver v. Burr, 31 W. Va., 736, the material facts are singularly similar to the case before ns. Woods, J., states and discusses the question in the same order adopted by his Honor. AYhen he reaches this question, the learned justice says: “The period of sixty days from 7 June, 1883, mentioned in the option, within which plaintiffs had the privilege of buying the land, * * * expired on the 6th day of August, 1883. During the whole of that period and during the whole of the 6th of August plaintiffs had the privilege of converting the offer of John Burr into a valid and binding contract by an unconditional acceptance of and compliance with the terms thereof. They could not do so by any other acceptance, nor could they comply with the terms in any other manner than by actual payment or tender of the whole price of the land before the sixty days expired. Neither could they withhold the payment, or tender of payment, until a proper deed was executed or survey could be made and the excess number of acres ascertained. It was their privilege to accept unconditionally the terms offered and comply with them by paying or tendering the cash within the sixty days, and thus secure to themselves the right to compel Burr to perform his contract. The delivery of the deed and the payment of the price of the land were intended to be contemporaneous acts, and it was not intended that the delivery of the deed should be a condition precedent to the tender of the price.” The case is easily distinguished from Paddock v. Davenport, 107 N. C., 710. Shepherd, C. J., in Cozart v. Herndon, 114 N. C., 252, says: “It is well settled that in order to constitute a contract there must be ‘a. proposal squarely assented to.’ If the proposal be assented to with a qualification, then the qualification must go back to the proposer for his adoption, rejection or amendment.” Clark on Cont., 369; Cyc., 265. *202 Applying these elementary principles to the facts before ns, we cannot sustain the plaintiffs’ contention that there was an acceptance of the option. Assuming, as we hold, that a tender was necessary on the day or within the time fixed by the option, it is conceded that none was made; therefore, unless there was a valid waiver, the option, with all of its incidents, ended on 16 April, 1905. The effect of a waiver is to release one of the parties from the terms of the original proposition and substitute for it other terms. If this be done by language, the terms of the new proposition are to be ascertained by the words used; if by conduct, the law gives to such conduct a construction which secures a fair and just result. The defendant Williams, executor, waived, by the language used, the tender of the money according to the terms of the option. No time was then fixed for the payment — the matter in that respect was at large. An option, with other terms, so far as Williams was concerned, was given. Assuming, for the purpose of plaintiffs’ argument, that both executors .were bound by the language used by Williams, and eliminating any question of the statute of frauds upon the principle upon which Alston v. Connell, 140 N. C., 485, and Lumber Co. v. Corey, 140 N. C., 462, are based, we have an option, without any limit as to time of acceptance or payment of the money. If it be doubtful whether the power to give an option for ninety days is included in the power to sell, certainly an option without limit cannot be sustained. Of course, if there had been an acceptance of the original option and a payment or tender of the money, the status of the parties would change from that of a proposal by the executors to a contract between them and the plaintiffs for sale; but, as we have seen, in the most favorable view of the transaction for plaintiffs, the option never merged into a contract, and the relation of vendor and vendee was never established. The *203 executors, by waiving the tender, had no right to demand that the plaintiffs purchase the land — it remained an unaccepted proposal to sell whenever the plaintiffs paid the purchase-money. The question whether, if they had done so within a reasonable time, the relation of vendor and vendee would have been established is not presented because they have never tendered the money. The only fact in that connection, found in the case agreed, is that “subsequently thereto the plaintiffs tendered a deed to the executors, in the execution of which the devisees and heirs at law were required to join. The plaintiffs encounter, in this aspect of the case, two difficulties: The executors never promised that the devisees and heirs at law would join in the execution of the deed. It is time that' they did promise to convey by “good and sufficient deeds.” It is evident that all parties had in view the power of sale conferred upon the executors by the will, which, as we have seen, was sufficient to enable the executors to convey, and whose deed plaintiffs now say they are willing to accept. Therefore, in demanding the execution of the deed by the devisees, they were not accepting the proposal as made, but imposing a condition upon their acceptance. It may have been desirable to have the signatures of the devisees to the deed, but it was not so-“nominated in the bond.” Again, the acceptance was not to be manifested by tendering a deed, but by paying “a part of the purchase-money and securing the balance” under the option as changed by the waiver within a reasonable time. This they have never done. The fact that they were willing and able to do so is not sufficient. There are a class of cases wherein this averment is sufficient. This is not one of them. There had been no refusal on the part of the executors to perform their part of the contract, which relieved the plaintiffs of the duty of an offer to pay the money. Grandy v. Small, 50 N. C., 50. *204 While we agree with the learned counsel for the plaintiffs that a tender of the purchase-money to one of the executors on the day or within the time fixed in the option would have been sufficient, we are of the opinion that a change in the terms of the option, or giving a new option by one executor, did not bind the other. It is true, as insisted by counsel, that in respect to the personal estate of a testator, the title to which vests in the executors jointly, one of them may sell or dispose of it, collect, compromise and release debts, cancel mortgages and do any other acts necessary and proper in the discharge of their duties. 17 Am. and Eng. Enc. Law, 620; Hoke v. Fleming, 32 N. C., 263. The rule is different, however, when a power to sell land is conferred upon two executors. The power must be' executed by them jointly; they must join in the sale and execution of the deed. 22 Am. and Eng. Enc. Law, 1099; Debow v. Hodge, 4 N. C., 368; Wasson v. King, 19 N. C., 262; Smith v. McCrary, 38 N. C., 204. Provision is made by statute to meet cases of death, etc. Kevisal, sec. 82. We are of the opinion that the waiver of Williams did not bind his co-executor Eoscue. Therefore the option of 16 January, 1905, was not accepted according to its terms. The plaintiffs’ counsel insist that, conceding that the executor Eoscue was not bound by the waiver of his co-executor, he ratified it by his letter of 28 July, 1905. Without analyzing the letter, which we think falls far short of the legal effect sought to be given it by the plaintiffs, it would seem to be sufficient to say that it was not written until a month after the devisees of Mrs. Eonville had elected to take the land in its unconverted form and so notified the executors. This they were entitled to do. The power of sale was conferred for their benefit; after the expiration of the option on 16 April, 1905, their right to put an end to it by an election could not be prevented by any action on the part of the executors after they had been notified of the election. *205 Tbe defendants’ devisees bad given tbe defendant Remick an option and be bad placed tbe amount of tbe purchase-money in tbe bank for their benefit. Whatever may be tbe retroactive effect of a ratification of a contract made by one dealing with bis own property, it would be difficult to find any sound principle upon which to sustain tbe right of an executor, with a naked power of sale, to ratify a void option to tbe prejudice of tbe beneficial owners of property more than ninety days after its termination. We do not find in Mr. Foscue’s letter of 28 July, 1905, language tbe legal effect or intention of which indicates a ratification of bis co-executor’s waiver of tbe tender; on tbe contrary, while be, in a very proper spirit, discusses tbe moral phases of tbe transaction, be expressly points out tbe difficulty which stands in tbe plaintiffs’ way. Among others, referring to tbe demand of tbe plaintiffs and tbe refusal of tbe heirs to sign tbe deed, be says: “You, we, nor tbe Court can make them sign tbe deed, and you won’t have tbe deed unless tbe heirs sign. Your suit won’t lie against the executors for damages, for we are willing to abide tbe trade.” It is true that sometime in September, 1905, Foscue told one of tbe plaintiffs that be would sign tbe deed and tbe plaintiff said that be was willing to accept a deed from tbe executors. In no aspect could this conversation revive the extinct option and affect rights which bad intervened. We have discussed tbe appeal upon tbe theory that when an option is given, being, until accepted, binding only on tbe maker, time is of the essence of tbe contract; hence, tbe person to whom it is given must comply with its terms in all material respects. After this is done and a bilateral contract, with all of its incidents, is made, or rather a contract of purchase is entered into, new rights are acquired and new duties imposed. Tbe option is merged into tbe contract. We have discussed the questions presented by tbe case agreed and considered by bis Honor because of tbe importance *206 of a correct decision to the parties, aided, as we have been, by the full and well-considered briefs and arguments of counsel, and for the further reason that we, nor those who have preceded us, have been heretofore called upon to discuss them except incidentally. It is manifest that the chief value, at this time, of the large body of land in controversy consists in the standing timber upon it. We know from several causes lately before us and from other reliable and public sources of information that contracts of this character are being made in many sections of the State. Much of the timber and mineral wealth of the State is being sought after by persons who take options, binding only the owners and securing to themselves the opportunity to make profit by selling the option.^ The rapid advance in the value of real estate, together with the meagre knowledge of many of the owners of the real value of their timber and mineral interests, make it the duty of the courts to adhere to the well-settled principle that, when such options are given, time will be deemed of the essence of the contract. Alston v. Connell, 140 N. C., 485 (p. 49L). In Wells v. Smith, 7 Paige Chan., 22 (31 Am. Dec., 274), the Chancellor, discussing the question involved, says: “If the purchaser wished to comply with the contract so as to have the benefit thereof, he should have tendered the money at the day, or have offered to pay the same, and to execute the bond and mortgage for the residue upon the delivery to him of a deed of the'premises.” The following statement of the law we think correct: “Generally, if a contract be unilateral, as if it be that A will convey provided B shall on a certain day pay a specified sum, time is deemed of the essence of the contract, and the payment of the sum is a condition to the creation' of any right in B to the performance of the contract.” Note to Wells v. Smith, supra. In Miller v. Cameron, 45 N. J. Eq., 95, it is said that when the party taking the option is not originally bound and *207 cannot be brought into Court, he should be required to show that he had faithfully performed every stipulation on his part. “If he intends to hold the other party to the contract which he has signed, he himself should not be guilty of a moment’s trifling without a most satisfactory excuse.” It was only after much hesitation and anxious consideration that courts of equity granted decrees for specific performance of unilateral contracts, thinking it more in accordance with sound principles that the aggrieved party be left to his action at law for damages. The rule is settled otherwise, and relief will be granted when the party seeking the aid of the court has complied with the terms of the option. He will not, however, for manifest reasons, be permitted to invoke the equitable doctrine that time is not of the essence of the contract. The plaintiffs rely upon the case of Lumber Co. v. Corey, 140 N. C., 462. In that case, while the general question is discussed, it is expressly said that the “plaintiff tendered performance within the time limited” (p. 470). The plaintiffs say that they are now content to accept the deed of the executors. If there were no other obstacle to decreeing specific performance, it is obvious that such a deed would not prevail as against the equitable title acquired by Eemick. The registration of the option, 4 May, 1905, gave no other notice than that the plaintiffs had a right 'to pay the money and call for the title within ninety days. Nothing else appearing of record, it would seem that Eemick became, by the contract of 28 June, 1905, a purchaser for value when he deposited the full amount of the purchase-money in the bank, to be paid when title was made. No deed appearing of record, he was entitled to treat the option as at an end. To make the extension of time to pay the money binding upon subsequent purchasers the option as charged should have been registered. It was a “contract to convey land,” *208 within the language and purpose of section 980 of the Revisal. While a court of equity might, in some cases, compel the vendor to convey such title as he had and the vendee was willing to accept, we do not think that in a case like the one before ns, when all of the parties in interest are before the Court, and their rights capable of adjustment, we should direct a deed to be made which could have no other effect than placing a cloud upon the title and producing further litigation. Such is not. the office of a court of equity. Upon the entire record, we concur with the Judge below that the plaintiffs are not entitled to recover. The decree made by him adjusting the rights of the defendants between themselves is not excepted to. We think it both wise and in accordance with the course and practice of the Court. The judgment is Affirmed.