Coleman v. Applegarth

Alvery, C. J., delivered the opinion of the Court. Coleman, the appellant, filed his bill against Applegarth and Bradley, the appellees, for a specific performance of. what is alleged to be a contract made by .Applegarth with Coleman for the sale of a lot of ground in the City of Baltimore. The contract, upon which the application is made, and which is sought to be specifically enforced, reads thus: “For and in consideration of the sum of five dollars paid me, I do hereby give to Charles Coleman the option of purchasing my lot of ground, northwest corner, &c., assigned to me by Wright and McDermot, by deed, dated, &c., subject to the ground rent therein mentioned, at and tor the sum of $645 cash, at any time on or before the 1st day of November, 1886.” It was dated the 3d of Sept., 1886, and signed by Applegarth alone. The plaintiff, Coleman, did not exercise his option to purchase within the time specified in the contract; but he alleges in his bill that Applegarth, after making the contract of the 3d of Sept., 1886, and before the expiration of the time limited for-the exercise of the option, verbally agreed with the plaintiff to extend the time for the exercise of such option, to the 1st of December, 1886. It is further alleged that, about the 9th of Nov., 1886, wjthout notice to the plaintiff, Applegarth sold, and assigned by deed, the lot of ground to Bradley, for the consideration of $700; and that, subsequently, but prior to the 1st of December, 1886, the plaintiff tendered to Applegarth, in lawful money, the sum of $645, and demanded a deed of assignment of the lot of ground, but which was refused. It is also charged that Bradley had notice of the optional^ right of the plaintiff at the time of taking the deed of a.| signment from Applegarth, and that such deed was marl in fraud of the rights of the plaintiff under the contract Sept. 3d, 1886. The relief prayed is, that the deed 1 Bradley may be declared void, and that Applegarth niel be decreed to convey the lot of ground to the plaintijj — 27 — upon payment by the latter of the $645; and for general relief. The defendants, both Applegarth and Bradley, by their answers, deny that there was any binding contract, or optional right, existing, in regard to the sale of the lot, as between Applegarth and the plaintiff, at the time of the sale and transfer of the lot to Bradley ; and the latter denies all notice of the alleged agreement for the .extension of time for the exercise of the option by the plaintiff; and both defendants rely upon the Statute of Frauds as a defence to the relief prayed. The plaintiff was examined as a witness in his own behalf, and he also called and examined both of the defendants as witnesses in support of the allegation of his bill. ^But, without special reference to the proof taken, the questions that are decisive of the case maybe determined upon the facts as alleged by the bill alone, in’connexion with the contract exhibited, as upon demurrer; such facts being considered in reference to the grounds of defence interposed by the defendants. The contract set up is not one of sale and purchase, but simply for the option to purchase within a specified time, and f r a given price. It was unilateral and binding upon one party only. There was no mutuality in it, and it was binding upou Applegarth only for the time stipulated for the exercise of the option. After the lapse of the time given, títere was nothing to bind him to accept the price and convey the property ; and the fact that this unilateral agreement was reduced to writing added nothing to give it force or operative effect beyond the time therein limited for the exercise of the option by the plaintiff. It is quite true, as contended by the plaintiff, that, as a general proposition, time is not deemed by Courts of equity as being of the essence of contracts; and that, in perfected contracts, ordinarily, the fact that the time for performance has past will not be regarded as a reason for withholding — 28 — specific execution. But while this is the general rule upon the subject,'that general rule has well defined exceptions, which are as constantly recognized as the general rule itself. If the parties have, as in this case, expressly treated time as of the essence of the agreement, or if it necessarily follows from the nature and circumstances of the agreement that it should be so regarded, Courts of equity will not lend their aid to enforce specifically the agreement, regardless of the limitation of time. 2 Sto. Eq. Juris., sec. 776. Here, time was of the very essence of the agreement, the nominal consideration being paid to the owner for holding the property for the specified time, subject to the right of the plaintiff to exercise his option whether he would buy it or not. When the time limited expired, the contract was at an end, and the right of option gone, :if that right has not been extended by some valid binding agreement, that can be enforced. ' This would seem to be the plain dictate of reason, upon the terms and nature of the contract itself; and that is the plain result of the decision of this Court, made in respect to an optional contract to purchase, in the case of Maughlin vs. Perry & Warren, 35 Md., 352, 359, 360. As must be observed, it is not alleged or pretended that the plaintiff attempted to exercise his option, and to complete a contract of purchase, within the time limited by the written agreement of the 3rd of Sept., 1886. But it is alleged and shown that before the expiration of such time, the defendant, Applegarth, verbally agreed or promised to extend the time for the exercise of the option by the plaintiff, from the 1st of Nov. to the first of December, 1886; and that it was within this latter or extended period, and after the property had been sold and conveyed to Bradley, that the plaintiff proffered himself ready to accept- the property and pay the price therefor. It is quite clear, however, that such offer to accept the property came too late. There was no consideration for — 29 — the verbal promise or agreement to extend the time, and such promise was a mere nudum pactum, and therefore not' enforceable, to say nothing of the Statute of Frauds, which has been invoked by the defendants. After the 1st of November, 1886, the verbal agreement of Applegarth operated simply as a mere continuing offirtniTMFe price previously fixed, and which ofteronly continued until it should be withdrawn or otherwise eiiohfd~by some act oF Ins; buTTicTwas entircly~Jr¡riiberty at any time, beloTTrUcceptance, to withdraw the offer_: an(FThe~T}7bS'equent sale and transfer of the property to Bradley, had. the effect at once of terminating the offer to the plaintiff. Pom. Spec. Perf. of Conts., secs. 60, 61. The principles that govern in cases like the present are very fully and clearly stated by the English Court of Appeal in Chancery, in the case of Dickinson vs. Dodds, 2 Ch. Div., 463. That case, in several of its features, is not unlike the present. There the owner of property signed a document which purported to be an agreement to sell it at a fixed price, but added a postscript, which ho also signed, in these words : “ This offer to be left over until Friday, 9 o’clock, a. m.”—two days from the date of the agreement. Upon application of the party, who claimed to be vendee of the property, for specific performance, it was held, upon full and careful consideration by the Court of Appeal, that the document amounted only t</an offer,, which might be withdrawn at any time before acceptance,! and that a sale to a third person which came to the know-\ ledge of the person to whom, the offer was made was an efFictual withdrawal of the offer^ In -the course of his judgment, after declaring the written document to be nothing more than an offer to' sell at a fixed price, Lord J ustice James said: “ There was no consideration given for the undertaking or promise, to whatever extent it may be considered binding, to keep the property unsold until 9 o’clock on Friday morning; but apparently Dickinson was — 30 — of opinion, and probably Dodds was of the same opinion, that he (Dodds) was bound by that promise, and could not in any way withdraw from it, or retract it, until 9 o’clock on Friday morning, and this probably explains a good deal of what afterwards took place. But it is clear settled law, on one of the clearest principles of law, that this promise, being a mere nudum pactum, was not binding, and that at any moment before a complete acceptance by Dickinson of the offer, Dodds was as free as Dickinson himself. That being the state of things, it is said that the only mode in which Dodds could assert that freedom was by actually and distinctly saying to Dickinson, £ Now I withdraw my offer.’ It appears to me that there is neither ¡¡principle nor authority for the proposition that there must Pbe an express and actual withdrawal of the offer, or what is called a retractation. It must, to constitute a contract, appear that the two minds were at one, at the same moment of time, that is, that there was an offer continuing up to the time of the acceptance. If there was not such a continuing offer, then the acceptance comes to nothing.’^, And Lord Justice Mellish was quite as explicit in stating his judgment, in the course of which he said: “ He was not in point of law bound to hold the offer over until 9 o’clock on Friday morning. He was not so bound either in law or in equity. Well, that being so, when on the next dayjhe made an agreement with Allan to sell the property to him, I am not aware of any ground on which it can be said that that contract with Allan was not as good and binding a contract as ever was made. Assuming Allan to have known (there is some dispute about it, and Allan does not admit that he knew of it, but I will assume that he did) that Dodds had made the offer to Dickinson, and had given him till Friday morning at 9 o’clock to accept it, still, in point of law, that could not prevent Allan from making a more favorable offer than Dickinson, and entering at once into a binding agreement with — 31 — Dodds.” And further on he says: #iIf the rule of law is that a mere offer to sell property, which can be with-Th'awn at any time, and which is made dependent on the acceptance of the person to whom it is made, is a mere nudum pactum, how is it possible that the person to whom the offer has been made can by acceptance make a binding contract after _he_ knows that the person who has made-the offer has sold the property to some one else? It is admitted law that, if a man who makes an offer dies, the offer cannot he accepted after he is dead, and parting with the property has very much the same effect as the death of the owner, for it makes the performance of the offer impossible. I am clearly of opinion that, just as when a man who has made an offer dies before it is accepted it is impossible that it can then be accepted, so when once the person to whom the offer was made knows fhat the property has been sold to some one else, it is too late for him to accept the offer; and on that ground I am clearly of opinion that there was no binding contract for the sale of this property by Dodds to Dickinson.” (Decided 18th November, 1887.) In this case, the plaintiff admits that, at the time he proffered to Applegarth acceptance of the previous offer' to sell at the price named, he was aware of the fact that! the property had been sold"!»*Bradiey. TTwas*t1ierefore^ Too late for him to attempt to accept the offer, and there was not, and could not he made, by such proffered acceptance, any binding contract of sale of the property. It follows that the decree of the Court below, dismissing the bill of the plaintiff, must, be affirmed. Decree affirmed.