Case Title: Tate v. Wood

Citation: 289 S.E.2d 432

Docket Number: 

State: west-virginia

Court: West Virginia Supreme Court

Date: 1982-03-19T00:00:00Z

Document:
289 S.E.2d 432 (1982) Delmer TATE, et al. v. W. Austin WOOD. No. 14914. Supreme Court of Appeals of West Virginia. March 19, 1982. *433 J. M. Tully, Summersville, for appellants. Donald K. Bischoff, Summersville, for appellee. HARSHBARGER, Justice: 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: 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: 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, 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 *434 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: "An option, as we understand it, is the right granted by the owner of land to a prospective purchaser, vesting in him the right, for a stated consideration, to purchase property within a specified time, which, if not exercised within the time fixed, becomes void and of no affect." Law v. Meadows, 131 W.Va. 132, 46 S.E.2d 449, 451-452 (1948). Tate did nothing to communicate acceptance of Wood's offer. He did not even receive the renewed offer until several days after the fire. The trial court correctly ruled that the Tates had not exercised their option. Had there been a "contract" rather than just an offer, destruction of the subject matter before performance may well have voided the contract because it was not performable.[2]Accord, Paxton Lumber Co. v. Panther Coal Co., 83 W.Va. 341, 98 S.E. 563 (1919), Syllabus Points 5 and 6. See generally, Annot., Modern status of the rules regarding impossibility of performance as defense in action for breach of contract, 84 A.L.R.2d 12 (1962 and later case service), particularly §§ 10 and 19; 4B Michie's Jurisprudence, Contracts, § 69. So, when the house burned, Wood was the owner and insured, and was entitled to his insurance proceeds to compensate for his property loss. Accord, Aetna Casualty & Surety Co. v. Cameron Clay Products, Inc., 151 W.Va. 269, 151 S.E.2d 305 (1966). *435 The lease provided that if the Tates did not exercise their purchase option, Wood would refund one-half of the cost of improvements they made to the house. They are entitled to that sum. We affirm the summary judgment for Wood; and remand for further proceedings about the cost of improvements. Affirmed, and remanded for further proceedings consistent with this opinion. [1] Wood's attorney, acting as his agent with respect to this property, had authority to extend the option. Accord, Board of Education of Elk District, Mineral County v. Harvey, 70 W.Va. 480, 74 S.E. 507 (1912). "Communication of an offer can be made by an agent of the offeror." Charbonnages De France v. Smith, 597 F.2d 406, 418 (4th Cir. 1979). [2] The doctrine of equitable conversion, placing beneficial ownership and risk of loss on vendee, does not apply until there is an executory contract for sale of land. See Annot., Vendor and purchaser: risk of loss by casualty pending contract for conveyance, 27 A.L.R.2d 444 (1953 and later case service).