Case ID: ad_117/html/0800-01.html
Source: Caselaw Access Project
Author: {"author": "Jenks, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Eugene C. Pomeroy, Appellant, v. Julia P. Newell and Other, Respondents.
    (No. 2.)
    Second Department,
    March 8, 1907.
    Vendor and purchaser — correspondence not constituting contract of sale — no specific performance of unaccepted option.
    In an action for the specific performance of an alleged contract to. convey lands which had been sold by the owners to. third parties, it was shown that the plaintiff had telegraphed to the owners making an offer for the property “ free and clear. The owners replied, “Will take cash above all liens which you must assume.” Plaintiff replied, “Will you accept 150,000 cash, I nssum: ing all liens? ” to which the o wners answered, “ Will take 160,000.cash above all liens and commissions.” Thereafter the plaintiff telegraphed, “ Will you give thirty day opinion at last figures?” to which the owners replied; “Will give • thirty day option. Notify Blackwell ” (the latter being the owners’ real estate agent), to which plaintiff two days afterwards replied, “Yóur cable granting option received. Have accepted option. Notified Blackwell.”
    
      Held, that the correspondence - did not constitute a contract, of sale, hut a mere option or continuing offer, which, not being founded upon- a consideration, was subject to withdrawal at any time before acceptance by the plaintiff; '
    That the'sale to third persons was a withdrawal of the option.
    That mere assent to an offer of an option is not a purchase tlíereünder;
    . That the plaintiff was not entitled to specific performance,, which will never be decreed unless there he mutuality ,of contract. . '
    Appeal by the plaintiff, Eugene G. Pomeroy,, from a. judgment of the Supreme Court in favor of the defendants, entered in tire office of tlie cleric of the county of Queens on the 16th day of March, 1906, upon the .decision of tlie court,. rendered after a trial at the Queens County Special Term, dismissing the complaint upon the merits. .
    
      
      Archibald Foote Olark [ Joseph. D. Redding with him on the brief], for the appellant.
    
      George F. Blackwell [ William G: Timm • with him on the brief], for the respondents Newell and Pomeroy.
    
      ILenry U. Abbott, for the respondent Sickert.
   Jenks, J.:

This is an appeal from a judgment dismissing the complaint in an action for specific performance. In consideration of this dispose tion we must remember that such relief is largely in the discretion of the equity courts ” (Dunckel v. Dunckel, 141 N. Y. 434), and that in Stokes v. Stokes (148 id. 716) the following rule was quoted and approved : “ A contract must possess certain elements in order that a court of equity may exercise jurisdiction to compel its performance. ‘ It must be upon a valuable consideration. It must be reasonably certain as to its subject-matter, its stipulations, its purposes, its parties, and the circumstances under which it was made. It must be, in general, mutual.in its obligations and its remedy.’ (3 Pomeroy’s Eq. Jur., sec. 1405.) ”

The plaintiff declares upon an agreement to convey lands in the county of Queens, possessed by the defendants Mrs. Newell and Miss Pomeroy, who were his aunts. At the time of the alleged agreement the plaintiff was in this country and the said defendants were in France. The husband of Mrs. Newell, George B. Newell, Esq., who was the agent of these defendants, .was also in France, and the dealings between the plaintiff and Mr. Newell were by telegraph and by post. The property had been in the family for years and was well known by all of the parties. It had been the subject of correspondence between them for some time. Mr. Newell had put the property in charge of the law firm of Blackwell Brothers of New York city, who were authorized to sell it and who were continuously active to make a sale that would be acceptable to their clients. These facts were familiar to the plaintiff.

It appears that the Messrs. Blackwell made a. sale of the lands to a third party, which the defendants in recognition of the Messrs. Blackwell’s authority in the premises felt bound to confirm and did confirm. It was essential then that the plaintiff should establish a prior-engagement of the defendants to him, and thus the contest waged about the telegraphic communications before the period that the Blackwells notified the plaintiff of the sale made by them. This was February fifteenth. On February 9, 1905, the plaintiff had telegraphed to Mr.'Newell: “ Will give Pomeroy and Newton (or Newell), seventy-five thousand for Astoria property free and clear. Answer.” On February 10, 1905, Mr. Newell had telegraphed: “ Will take cash above all liens which you must assume.” On that day the plaintiff telegraphed to Newell': “Will you accept fifty, thousand cash, I assuming all liens?” On February eleventh Mr.' Newell had telegraphed: “ Will take sixty thousand cash above all liens and commissions.” On' February eleventh the' plaintiff telegraphed: “Will you give thirty day option at last figures ? ”. And on ■ February twelfth Mr. Newell ■ telegraphed;: “Will give thirty day option. ■ Notify Blackwell.” On February fourteenth the plaintiff telegraphed: “Tour, cable granting option received. Have accepted option. Notified Blackwell.”

The issue as to an agreement was finally defined as to .the force and effect of the expression, “ Have accepted option,” the plaintiff insisting that thereby he agreed to purchase the property and the defendants contending that thereby the plaintiff but agreed to establish, an option between the parties whereby if he offered the' stipulated price within thirty days he would purchase the property.. The learned Special Term sustained the defendants, and I am of opinion that its judgment should be affirmed. The determination of the intention is not dependent on the question whether the language used was futile or effective; by this I mean whether the - plaintiff thereby did or did not secure an option. If he sought, to secure an option and did not, we. should not, therefore,, hold that lie he did not intend to secure it. The agreement for an option and the option are two different things (Ide v. Leiser, 10 Mont. 5; Black v. Maddox, 104 Ga. 157; 21 Am. & Eng. Ency. of Law ;[2d ed.], 924 and 925), and. the mere assent to an offer of an option is not a purchase qnder the option. (Chicago & G. E. R. Co. v. Dane, 43 N. Y. 240.) Otherwise acceptance of the offer of an option would destroy the option by merging it in the purchase. In this case, the plaintiff, in order to maintain his legal right, was. forced to declare on an agreement to purchase, for if he stood upon the proposition that the words “ Have accepted option ” secured for him an option, he must fail, inasmuch as what the parties supposed was an option was but a mere continuing offer, in that there was no-consideration for it, and hence it could be withdrawn at any time ' before the plaintiff availed himself of it. (21 Am. & Eng. Ency. of Law, supra, 929; Quick v. Wheeler, 78 N. Y. 300, 304. See, too, Dickinson v. Dodds, L. R. 2 Ch. Div. 463; Boston & Maine Railroad v. Bartlett, 3 Cush. 225.) And the sale by the Black-wells would amount to such withdrawal. (Dickinson v. Dodds, supra.)

The words “ Have accepted option ” have not received a judicial definition from the Court of Appeals so as to warrant the assumption that the parties had a settled definition in mind. (Slocovich v. Orient Mut. Ins. Co., 108 N. Y. 56.) The industry of the learned counsel for the appellant has collected instances of the use of this expression, in judicial opinions and in legal head notes, to describe past acts in closing the option. It may be conceded that such uses were accurate, but on the other hand instance is not wanting of a use of the same expression in the sense contended for by the defendants in this case. In Chicago & G. E. R. Co. v. Dane (supra), Grover, J., for the court, writes: “.Upon the receipt of .the defendants’ offer to transport not to exceed 6,000 tons upon the terms specified, it merely accepted such offer and agreed to be bound by its terms. This amounted to nothing more than the acceptance of an option by the plaintiff for the transportation of such quantity of iron by the defendants as it chose; and had there been a con-' sideration given to the defendants for such option the defendants' would have been bound to transport for the plaintiff such iron as it required within the time and quantity specified, the plaintiff having its election not to require the transportation of any.” We are not limited by legal definition or by rigid meaning, but the question may be answered in consideration of the meaning of the words, in the light of surrounding circumstances, of the purpose in mind and of the end sought. (Maloney v. Iroquois Brewing Co., 173 N. Y. 303; Gillet v. Bank of America, 160 id. 549.)

The parties had failed to make any agreement for immediate . purchase, and they were apart as to the purchase price. The defend. ants demanded more 'than the plaintiff offered... Thereupon the plaintiff’s object was to secure an option in order, as he says, that he might look into the “ taxes, assessments, arrears and interest.” It ■is to be- noted that the plaintiff did nbt ask- for the option, so "that an answer of' the defendants, might constitute a meeting of the minds, nor did he make an offer that he would take an option. He but makes, inquiry, Will you give thirty day option at last figures ?, ” In Wald’s Pollock on Contracts (Williston’s 3d ed. p. 15) it is said : “ First, we have -to consider in particular cases whether some act or announcement of one of the parties is really the proposal of a. contract, or only an invitation to other persons.'to, make proposals for his consideration. This depends on the intén-. tion of the parties as. collected from their language and the nature of the transaction, and the question, is one either of- pure fact or of construction. • Evidently it may be • an important one, but due weight has not always, been given to, it.” ' Lawson in his article on Contracts in Cyclopedia of Law and Procedure (Vol. 9, p. 278), says: If a proposal is nothing more than .an invitation to the person to whom it is made to make an offer to the proposer,, it is not such an Offer as .can be "turned into an agreement by acceptance. Proposals of this kind, although made-to definite persons^and nbt. to the public generally, are merely invitations to trade; they go no further than what occurs when one asks another what-he will give or take for certain goods. Such inquiries may lead to bargains, buf do not make them. They ask-for offers which the proposer has a right to accept or reject as he pleases.” Legally if the matter had ended with the defendants’ statement “ Will give thirty, day option,” the. plaintiff would not .have been bound, for there was no assent. Notice of a refusal to accept was not required of him. (Corning v. Colt, 5 Wend. 253.) And as the-parties were not together, an acceptance must be manifested by some appropriate 'act. ( White v. Corlies, 46 N. Y. 467.) The purchase, involved a large sum; the parties were thousands of miles apart, -the communication was ,by cable which could only be verified by that means, and the defendants had required that Blackwell should be notified. What was more natural than that the telegram offering the “ option ” should be acknowledged and that the notification . required should be reported as. made % If the telegram was to be acknowledged at all, it was but natural that the plaintiff should make some expression of assent to the offer. The words- “Have accepted, option more naturally refer ■ to the acceptance of the “ option ” than to the purchase of the property. And in passing it may be noted that in his telegram of the sixteenth the plaintiff does not ask the defendants to cable Blackwell “ Have accepted option,” but to “ Cable Blackwell have purchased.” It may be that the economy of saving a single word explains the variance, or it may be that the variance in language indicates different ideas. It is natural to the course of business dealing that an acceptance should follow an offer, if one desire to avail himself of the offer, and it is unnatural that such an one, even inviting an offer, should remain without word or action of assent when the offer is made, relying on the fact that the offerer assumes an assent from an invitation. The telegram, of Mr. Newell in answer to the inquiry whether a thirty-day option would be given, was sent from Paris on Sunday, February twelfth, and was received on that day, presumably, in Madison, New Jersey. February thirteenth was celebrated as Lincoln’s birthday, and yet the plaintiff, who had asked for an option of thirty days which he understood had beeii given to him and, therefore, must then have supposed, for aught that appears, that he had yet twenty-seven or twenty-eight days in which to exercise his right, asserts that on the following day, February fourteenth, he agreed to purchase the property. He testifies that he asked for the time in order that he might determine the taxes, assessments, arrears and interest against the property, and he also testifies that he had investigated the matter sufficiently in the time that intervened his receipt of the “ option ” and the sending of his telegram of February fourteenth. He does testify to the particulars of his investigation. But one naturally queries the reason which moved the plaintiff to such hot haste. It must be remembered that he had received no intimation from, any source that there was any doubt as to his “ option.” On the other hand, if he intended to secure the “ option,” it was entirely natural, as I have said, that he should acknowledge promptly the receipt of the offer, and also in the acknowledgment express his acceptance thereof.

Specific performance is not decreed unless there be mutuality. Would a court of equity hold the plaintiff upon such language under the circumstances as being sufficiently clear, cogent and definite, to ■establish an agreement on his part to purchase this property ?

The question is, what was agreed upon between tbe parties before the sale by the Blackwells to a third party ? The words and acts of the plaintiff subsequent to the notification which he received from Blackwell cannot be taken as throwing light upon the intent and purpose of the language Have accepted option,” without Carrying in mind that such words were written and such acts were done after the plaintiff had thus been notified and perhaps understood that any theory of 'an “ option ” could not avail him. The learned counsel for the appellant lays stress on the fact that Ins letter of February fourteenth to the Blackwells is strong indication of-intent and purpose. But the letter is ambiguous and consistent with the plaintiff’s supposition that he had secured an option. He wrote : “ I take pleasure in informing you that I have acquired the interests of my aunts.” This was not the'natural expression of one who had agreed to buy the property owned by his aunts. He would have said outright, I have agreed to purchase, or I have bought the property, or I have purchased the property. The plaintiff reveals himself as somewhat disingenuous. When the question came as to who should take the property, he telegraphed Mr. Newell on March second: “Hnder heavy obligations; am compelled to hold you to contract,” and yet under cross-examination he admits there were no specific obligations; * *. * I did not refer to pecuniary obligations of any kind; * * * it was a moral obligation.” It .amounted, he ádmits, to no more than his intention. ■ The plaintiff’s letter to Mr. Newell of February twentieth is significant: “I am writing to inform you that I am now in position to purchasez My reason-for asking a thirty days’ option was to enable me to go fully into the matter of taxes, assessments, arrears and interest which acted as a lien against the property, and I did not feel disposed to assume greater responsibilities in this matter than I could in justice to myself and. family undertake.” When asked upon the witness stand, “Tour idea in asking an option was to find out first how much the taxes and liens were before you undertook any responsibility, is that so ? ” the plaintiff replied, “ I wanted to know how much I had to’pay for the property, of course," as near as I could find out, Q. And until you discovered that, fact, yoti did not mean to buy it, did you ? A. Mot necessarily. By the court: Q. Did you mean to buy it? That is not an answer. Did you mean to buy it? A. I would have had to decide that afterward. Q. Then you did not mean to buy it then ? (Mo answer.) ” Mr. Mewell appears to have acted throughout with scrupulous fairness, though with predilections for his nephew, this plaintiff. It is impossible for me, after a reading of his entire correspondence, to conclude that he had any other thought in mind than that by the telegrams of February eleventh, twelfth and fourteenth there was no agreement between him and his nephew save for an option to purchase within thirty days, and that he wished to secure such privilege for him if he could do so. In point of law there was not even that, but ait most a continuing ■ offer that was legally withdrawn before the plaintiff accepted it.

I advise affirmance, with costs.

Hooker, Gaynor, High and Miller, JJ., concurred.

Judgment affirmed, with costs.