Adams v. Peabody Coal Co.

Mr. Justice Carter delivered the opinion of the court: The writing in this case was more than an offer, and the consideration was sufficient to support it as a valid and binding contract. It is important to distinguish clearly between an offer to sell something, which offer may or may not become a completed contract by acceptance in the future, and a contract to leave that offer open for a time, which, if accepted, becomes at once an executed contract. Only the last is an option. An option is a continuing offer, which the offerer may not withdraw until the expiration of the time limited. (21 Am. & Eng. Ency. of Law,—2d ed.— pp. 925, 926.) The parties agreeing “to sell an option to buy for the sum of one dollar, there is no reason why such an express consideration is not an adequate one.” (Guyer v. Warren, 175 Ill. 328.) Where the contract is under seal, consideration is imported. (Hayes v. O’Brien, 149 Ill. 403; Forthman v. Deters, 206 id. 159.) Inadequacy of consideration is, of itself, no ground for impeaching a contract in a court of equity. 1 Chitty on Contracts, (14th Am. ed.) p. 30; Lawrence v. McCalmont, 2 How. (43 U. S.) 426; Waterman v. Waterman, 27 Fed. Rep. 827. While it was formerly held, with some degree of strictness, that the want of mutuality would render a contract for the sale of land incapable of specific enforcement, the doctrine of the earlier cases upon this subject has been considerably modified. “Where the party holding an option signifies his acceptance within the time limited and upon the terms stated, the obligation of the contract becomes mutual and capable of enforcement at the instance of either party.” Guyer v. Warren, supra; see, also, Seyferth v. Groves and Sand Ridge Railroad Co. 217 Ill. 483; Carter v. Love, 206 id. 310; Estes v. Furlong, 59 id. 298. The Peabody Coal Company, being the assignee of Francis S. Peabody, had the same rights as Peabody. (Perkins v. Hadsell, 50 Ill. 216.) Under these authorities it is clear that this option could have been specifically enforced against Gavin R. Adams during his lifetime, and as the option specifically states that “all rights and obligations created by this agreement shall extend to and be binding upon the successors, heirs, executors, administrators and assigns of the parties,” it seems equally clear that it is binding upon the heirs, devisees and legatees. 21 Am. & Eng. Ency. of Law, (2d ed.) p. 925; Duncan v. Wickliffe, 4 Scam. 452; Estate of Rapp v. Phœnix Ins. Co. 113 Ill. 390; Fuller v. Bradley, 160 id. 51; Fry on Specific Performance, (3d ed.) sec. 57. Counsel for appellant does not seem seriously to question the right of the court to enforce this contract against the heirs and devisees of said Gavin R. Adams, but he does insist that the chancellor incorrectly held that upon the execution of the contract and the conveyance of the fee simple title to the coal land in question by testator’s representative, the purchase money, when the same was paid over, was personal property. Appellant insists that this purchase money when paid over should be considered as real estate, and be held to pass, under the third and fourth clauses of the will, as real estate. While numerous authorities touching this question from other jurisdictions have been cited, all counsel state in their briefs that this court has never decided the particular question involved in this case. In the recent case of Covey v. Dinsmoor, 226 Ill. 438, the principles of law fiere involved were fully considered and the case is decisive of the question now under discussion. It would serve no useful purpose to repeat at length the reasoning of that decision. The doctrine of equitable conversion depending upon the principle that a court of equity looks upon that as done which the parties to an agreement have contracted to be done should not apply in cases of this kind, as it would result in defeating the intention of the testator, which is the paramount rule of construction as to wills. (Bradsby v. Wallace, 202 Ill. 239.) Manifestly, the testator in this will considered these mineral and coal rights covered by the optional contract as reah estate. We recognize, as we did in Covey v. Dinsmoor, supra, that there are authorities which hold that in contracts of sale upon the purchaser’s option, the moment such option is exercised a conversion, as between the parties claiming title under the vendor, relates back to the time of the execution of the contract. But these authorities are not in harmony with the decisions of this court. We are fully satisfied with the rule stated in Covey v. Dinsmoor, supra, and adhere to it in this case. The holding of the chancellor that the executrix was the equitable owner of the purchase money, “and that said purchase money is personal estate and passes as such under the said will,” cannot be upheld. That portion of the decree directing the execution and delivery of the deed by the executrix in accordance with the .contract, on the payment of the purchase money, will be sustained, and that portion of the decree which found that such purchase money was personal estate and passed as such under the will must be reversed, with directions for further proceedings in harmony with the views herein expressed. Reversed in part and remanded, with directions.