Case Name: The George Wiedemann Brewing Company v. Maxwell et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1908-03-24
Citations: 78 Ohio St. 54
Docket Number: No. 10521
Parties: The George Wiedemann Brewing Company v. Maxwell et al.
Judges: Shauck, C. J., Price, Crew and Summers, JJ-, concur.
Reporter: Ohio State Reports, New Service
Volume: 78
Pages: 54–67

Head Matter:
The George Wiedemann Brewing Company v. Maxwell et al.
Written agreements known as options — Not void for lack of mutuality, when — Acceptance may be verbal — And proven by parol — Rule of specific performance — Party seeking enforcement must show readiness to perform.
I. Written agreements known as options are not necessarily void for lack of mutuality, and where accepted within the time specified may become valid and enforceable contracts. Nor are they rendered invalid by the fact that the acceptance by the promisee is verbal and not in writing. Such assent may be shown by parol.
3. The general rule is that a party seeking specific performance of a contract must show performance on his part, yet there are clearly defined exceptions and one of them is that when the other party repudiates and makes it certain that he does not intend under any circumstances to comply, a showing of readiness and ability on the part of the complaining party to then and there perform his part communicated to the other party and accompanied with a demand of compliance by such other party, is sufficient compliance without an actual formal tender.
(No. 10521
Decided March 24, 1908.)
Error to the Circuit Court of Clark county.
Action was brought in the common pleas of Clark by the George Wiedemann Brewing Company, a Kentucky corporation, against Rachel Maxwell, James L.' Maxwell, and The Springfield Breweries, Limited, an English corporation, to enforce specific performance of a- certain written agreement for a lease of premises situate in the city of Springfield, said agreement being in the form of an option, a copy of which follows:
“Springfield, Ohio, September 28, 1905.
“In consideration of one dollar, to us paid, the receipt whereof is hereby acknowledged, we do hereby agree to give to The Wiedemann Brewing Company an option of ten days from this date for the leasing of the building owned by us and known as No. 9 West Main street, this city, said building to be leased for five years from date of lease and at a rental of one hundred dollars per month, rent to be paid at the first day of each month, and also a bond of indemnity to be given. All alterations and inside repairs to be made by The Wiedemann Brewing Company at their expense. Possession to be given on or before November 10, 1905.
“[Signed] Mrs. Rachel Maxwell.
“James L. Maxwell.
“Attest: A. J. Baker.”
Also to have declared void a certain lease executed October 6, 1905, by Rachel and James L. Maxwell to The Springfield Breweries, Limited, the same having been taken with full knowledge of the rights of plaintiff in the premises.
The answer of the Maxwells admitted the execution of the written option, but denied that the plaintiff accepted the option; denied that they agreed to execute a lease for the premises, and admitted that they had executed a lease of the premises to the defendant The Springfield Breweries, Limited.
The answer of The Springfield Breweries, Limited, averred the execution and delivery to it, October 6, 1905, by the Maxwells, of a lease of the premises in dispute for five years which lease was duly filed for record and is a valid and existing lien. It also denied that Rachel and James L. Maxwell entered into the agreement with the plaintiff described in the petition.
The cause, having been appealed to the circuit court, was there tried on its merits. A finding of facts separate from conclusions of law was found by the court from which it is shown that the Maxwells executed and delivered the option to the plaintiff as averred in the petition; that plaintiff elected to accept the option and notified the Maxwells October 5, 1905, of such election; that the Maxwells, October 6, 1905, executed and delivered to The Springfield Breweries, Limited, a lease of the premises for the term of five years commencing- November 1, 1905, at a rental of twelve hundred and fifty dollars per annum, which lease was filed for record October 7, 1905, in the office of the county recorder; that at the' time of taking this lease the lessee had knowledge and notice of all the foregoing facts; that the plaintiff by its agents and attorneys, on October 7, 1905, at 9 o’clock a. m., was present at the office of Keifer & Keifer, in Springfield, at which time and place it had been agreed by the plaintiff and the Maxwells that they would meet for the execution of the things provided for in the option, and the plaintiff was then and has ever since said date been ready and willing to so perform its part; that plaintiff did not at any time tender to the Maxwells a bond of indemnity as provided in the option, but plaintiff, by its attorneys, did prepare, though it did not execute, a written instrument pursuant to the option agreeing to hold the Maxwells harmless on account of any liquor tax, and on account of any damage that may grow out of the liquor business being carried on in the premises, or on account of any business of any nature that may be carried on in the premises; that October 5, 1905, and again on October 7, 1905, the willingness and readiness of the plaintiff to perform upon its part all the terms and requirements of the option and the acceptance thereof were communicated to the Maxwells; that at the before mentioned time and place agreed upon for the completion of the contract the Max-wells failed to appear and the plaintiff was then notified of their refusal to execute the lease to plaintiff, and was then notified that they had upon the day before such appointed time, and after the acceptance by plaintiff of the option, executed the above mentioned lease to The Springfield Breweries, Limited; that plaintiff was at all times mentioned and ever since has been authorized to do business in Ohio and is financially able to give the bond mentioned in the option.
And as conclusions of law the court found that the option and acceptance constituted a valid obligation upon the Maxwells to execute a lease to plaintiff for the premises upon the tender of the bond specified in the option; that The Springfield Breweries, Limited, took its lease subject to all the rights of plaintiff against the Maxwells under the option and acceptance thereof; but that plaintiff is not entitled to maintain this suit for specific performance because plaintiff did not execute and tender a bond of indemnity, said agreement to furnish a bond being one of the mutual obligations of the option. Judgment dismissing the petition and for costs was thereupon rendered, and the plaintiff brings error.
.Mr. Louis J. Dolle and Messrs. Keifer & Keifer, .for plaintiff in error.
Of course, until an option is accepted, there is no mutuality upon any contract to lease, but this option was itself a contract upon sufficient consideration and therefore mutual because the minds of the parties met and a legal obligation resulted. However, as soon as the option is accepted, there is mutuality upon the contract to lease, because there is then a contract upon that subject binding bpth parties.
The option was accepted within the time, the contract for lease was then complete and the consideration for the promise to lease on the part of the Maxwells was the promise of the plaintiff to accept the lease upon the terms stated in the option. Brown et al. v. Fowler et al., 65 Ohio St., 507; Oil Co. v. Crawford, 55 Ohio St., 161; Cummins v. Beaver, 103 Va., 230; Ide v. Leiser, 10 Mont., 5; Raymond v. Land & Water Co., 4 C. C. A., 89, 53 Fed. Rep., 883; Black v. Maddox, 104 Ga., 157, 20 S. E. Rep., 723; 3 Page on Contracts, Section 1619; Pomeroy on Specific Performance, Section 169; Waterman on Specific Performance, Section 200; Ross v. Parks, 11 L. R. A., 148, 93 Ala. 153; Watts v. Keller, 56 Fed. Rep., 1.
The fact that such acceptance is not in writing does not affect the right to enforce the contract against the party who signed the written option. Specific performance is enforced where defendant has signed contract, but plaintiff has not. 3 Page on Contracts, Section 1620; Section 4199, Revised Statutes; Pomeroy on Specific Performance, Section 170; Waterman on Specific Performance, Section 201; Thayer v. Luce & Fuller, 22 Ohio St., 63; Jones v. Lewis, 7 W. L. B., 211; Bickett v. White, 1 C. S. C. R., 170.
The latter case was reversed in 27 Ohio St., 405, but on other grounds than the above proposition.
From the early days of equity jurisprudence it has been settled that in a suit for specific performance a strict and literal tender of performance on the part of plaintiff was not required.
In equity where a defendant repudiates or denies his obligation or liability under the contract, a tender or offer to perform by the plaintiff before suit is brought was unnecessary because such a tender or offer would have been a vain thing, and a readiness and ability to perform communicated to the defendant before the suit is brought, is sufficient. 26 Am. & Eng. Ency. Law, (2 ed.), 43, 114, 116, 117, 118; 28 Am. & Eng. Ency. Law, (2 ed.), 8, 9; Brock v. Hidy, Jr., 13 Ohio St., 306; Irvin v. Gregory, 13 Gray, 215; Lowe v. Flarwood, 139 Mass., 133; Farwell, Admx., v. Solomon, 170 Mass., 457; Shattuck v. Cunningham, 166 Pa. St., 368; Mattocks v. Young, 66 Me., 4S9; Maxwell v. Pittinger, 2 Green Ch. (N. J.), 156.
An offer of plaintiff in his bill to perform is sufficient, without previous offer. Waterman on Specific Performance, Section 447; Beach on Con tracts, Sections 899, 912; Bispham’s Equity, Section 392; 3 Page on Contracts, Section 1424; Bruce v. Tils on 25 N. Y., 194; Freeson v. Bissellj 63 N. Y., 168; Lewis' v. Prendergast, 39 Minn., 301; Railway Co. v. Chisholm, 55 Minn., 374; Maughlin v. Perry, 35 Md., 352; Dustin v. Newcomer, 8 Ohio, 51; Hager v. Reed, 11 Ohio St., 626; Insurance Co. v. Smith, 44 Ohio St., 156; I sham v. Greenham, 1 Handy, 357; Moore v. Moulton, 2 W. L. B., 323; Watson v. Dun, Wright, 741; Railway Co. v. Stewart, Treas., 13 C. C, 359; Church v. Pennington, 18 C. C., 409; Andrews v. Watson, 12 O. C. D., 692, 51 Ohio St., 619.
An offer to perform at time and place agreed upon is sufficient. Tullos v. Rodgers, 5 O. D., 745; Daily v. Litchfield, 10 Mich., 29; 28 Am. & Eng. Ency. Law, (2 ed.), 22; Cheney v. Libby, 134 U. S., 68; Smith v. Lewis, 24 Conn., 624.
The opinion in the latter case is a full discussion of the exact question here as to whether a defendant’s absence from a place and at a time verbally agreed upon for completing a contract is not a complete repudiation so that no further tender or offer by plaintiff is necessary. This case, was cited and approved in Raudabaugh v. Hart, 61 Ohio St, 88; Smith v. Lewis, 26 Conn., no.
Messrs. Martin & Martin, for defendants in error.
The objection which has been found by the courts to the exercise of the rights of specific performance- upon an option is that it lacked mutuality, both as to the obligation and the remedy. It has been classed as belonging to that branch of contracts known as unilateral in that all benefits are enjoyed by the one party holding the option, without a corresponding advantage to the other side.
The party who signs the option cannot enforce its execution by specific performance, because the holder expressly reserves the right to accept or not the provisions of the option at his pleasure, and, therefore, while the holder o£ the option could compel the other party to specifically perform, the corresponding legal right would not exist in favor of the latter.
This is simply a transfer on the one hand of the right to do or not .to do a certain thing, without a corresponding obligation upon the other side. It is therefore unilateral, and lacking in the essentials of a contract, which provide that there must be a mutual obligation between the parties in order to render the same effective.
In many cases and in varying forms, the courts have held that specific performance will be denied where mutuality is lacking. 3 Page on Contracts, Section 1615; Marble Co. v. Ripley, 10 Wall., 339; Rogers v. Saunders, Jr., 16 Me., 92; Glass v. Rowe, 103 Mo., 513; Bodine v. Glading, 21 Pa. St., 50; DeCordova, Admr., v. Smith’s Admx., 9 Tex., 129; Moore’s Admrs. v. Randolph, 6 Leigh (Va.), 175; 21 Am. & Eng. Ency. Law, 928; Hawralty v. Warren, 18 N. J. Eq.; 124.
Where there is no performance, and no promise to perform on one side, a promise to. perform on the other side is without consideration and with-' out mutuality, and such contract can be held void upon either or both grounds. Brown et al. v. Fowler et al., 65 Ohio St., 525.
But it is insisted that as the plaintiff accepted the option that thereupon the mutuality theretofore lacking created a binding contract. This does not follow. If there was an adecjuate consideration, as distinguished from a nominal one, and if there was no performance as required under the terms of the option, then the lack of mutuality continues. 3 Page on Contracts, Section 1619; Pomeroy on Specific Performance, Section 169; Waterman on Specific Performance, Section 200.
ITere it appears that it was not mere election which was sufficient to entitle a specific performance, but there must have been a performance on the part of the person holding the option; the mutuality is created by election and performance, for the authority cited by counsel clearly maintained that a performance is a sine qua non. A performance in this case would have necessarily required a compliance with all the terms of the option which would have included the furnishing of a bond. 21 Am. & Eng. Ency. Law, 930.
In the case at bar, the plaintiff was under obligations to furnish a bond of indemnity, which was as much a part of the consideration as the purchase money in Brock v. Hidy. There was no tender of it, or any effort to execute it, or to present it as a bond of indemnity in exchange for the lease.
The lease and the bond were concurrent acts, mutually dependent upon each other, and each void without the others — just as the purchase money and the deed are concurrent acts. Brock v. Hidy, Jr., 13 Ohio St., 310.
It is sufficient for our argument that the bond was not in existence at the time and was not there at the place where and when the demand for the lease was made, and could not have been executed-The plaintiff was not in a position to demand the lease as it could not deliver the bond.
There is no averment that it was able to perform all the conditions of the option, and the mere allegation of readiness and willingness is insufficient. Raudabaugh v. Hart, 61 Ohio St., 73.

Opinion:
Spear, J.
Two questions are presented by the record. One relates to the sufficiency of the option as a binding obligation; the other to the matter of performance on the part of the plaintiff. It is the contention of defendant in error that the contract is invalid because of a lack of mutuality and because there was no valid acceptance of the option. But the circuit court held that the consideration expressed was a sufficient consideration to support the promise on the part of the promisors, and the acceptance by the promisee within the time prescribed supplied lack of mutuality, if any before existed, and was sufficient to constitute a binding obligation. With this conclusion we agree. Such instruments are merely contracts by which one party in consideration of the payment of a certain sum to the other party, acquires the privilege of buying from or otherwise acquiring, or selling to such other party an interest in specified property at a fixed price within a stated time. This form of contract has become of general use in the business world, and if there ever was any ground for denying the legal validity of such contracts they have, we think, been too often recognized as valid to justify serious doubt now. Bacon v. Daniels, 37 Ohio St., 279; Oil Co. v. Crawford, 55 Ohio St., 161, 178; Brown v. Fowler, 65 Ohio St., 507. The amount of the money consideration in such an instrument is not of importance as bearing upon its sufficiency as a consideration to support the promise. The requirement of mutuality is entirely satisfied when the acceptance within the proper time has been made. Nor does the fact that the acceptance by plaintiff in the present case was verbal destroy its right to enforce the contract against the party who signed the option. Our statute of frauds (section 4199, Revised Statutes,) denies the right to maintain an action upon any contract for the sale of any interest in lands unless the agreement is in writing signed by the party to be charged, or by some authorized person. This contract is so signed by the party to be charged. The assent of the other party may be shown by parol. Pom. on Con., sections 169, 170; Waterman on Spec. Per., section 201; Cummins v. Beavers et al, 103 Va., 230; Bickett v. White, 1 C. S. C. R., 170; Thayer v. Luce, 22 Ohio St., 62; Ide v. Leiser, 10 Mont., 5; Black v. Maddox, 105 Ga., 157.
But the circuit court found as further conclusion of law that plaintiff is not entitled to relief because no bond of indemnity was furnished or tendered to the other parties to the option contract. With this conclusion we do not agree. The facts show that the parties had made an agreement to meet at a certain defined place at a certain specified time for the purpose of executing and delivering the necessary papers to effectuate and complete the contract, the Maxwells to be accompanied by their attorney. The evidence further shows that as part of this arrangement the plaintiff was to have a lease prepared for execution at the time and place agreed and a bond of indemnity as provided in the contract.. These papers had been prepared by the attorney for the plaintiff' and were ready for execution. In conformity with this arrangement the plaintiff by its agent accompanied by its attorney was at the place at the time assigned with the foregoing papers; it was ready and anxious to execute that or any proper lease on its part, and having then and there also the bond of indemnity which it was also ready to execute and deliver. The contract is somewhat indefinite as to the character of the bond, but when the use to which the property was to be put is considered it is apparent that the paper prepared as a bond, and which the plaintiff was then and there ready and able to execute and deliver, sufficiently covered the requirements of the contract. But the Maxwells both failed to appear, and no one appeared for them at the time or at any time that day. Not content to leave the matter in a state of uncertainty, and anxious to complete the contract, the agent of the plaintiff, within the next hour, went out upon the street to find the other parties. He found the husband (who it is proven represented the wife) at or near the offce of the attorney who it had been and then was expected would be present with the Maxwells and assist in the execution of the papers, and said to him that The Wiedemann Brewing Company was ready to execute the lease. He was then informed by Maxwell that they did not propose to comply with the option; that they had, the day before, executed a lease to the other company. Maxwell and the agent then went up-stairs into the office of Maxwell's at- torney. The attorney advised Maxwell not to execute any lease to the plaintiff; he had signed one lease and he had better not sign another one and get into further trouble. Maxwell then said he was protected with a bond and showed the bond; protected against any damage from the Wiedemann Company. At no time, then or afterward, did the Maxwells show any disposition to comply with the option contract, but stood by their refusal.
Under such circumstances it could not be reasonably held that the plaintiff was bound to execute and manually tender the bond any more than it was necessary for it to execute and tender the lease, or tender payment of rent. The conduct of the other parties was such as to render any offer of the kind a mere idle ceremony. While they had not technically put it beyond their power to execute a lease to the plaintiff' it was entirely plain that their purpose not to do so was fixed. It was manifest that an execution of these papers and a delivery of them to the Maxwells would have been utterly vain, and the law does not require the doing of vain things. While the general rule is that a party seeking specific performance of a con tract must show performance on his part, yet there are clearly defined exceptions, and one of them is that when the other party repudiates and makes it certain that he does not intend under any circumstances to comply, a showing of readiness and ability on the part of the complaining party to then and there perform his part communicated to the other party and accompanied with demand of compliance by such other party, is sufficient compliance without an actual formal tender. It is argued that the conclusion of the circuit court is supported by the holding in Raudabaugh v. Hart, 61 Ohio St., 73. We think not. That case is authority for the proposition that a party cannot maintain an action in this class of cases "without averring a' performance, or an offer to perform on his part. Mere willingness and readiness to perform, uncommunicated to the other party, will not avail." And a petition "which contains neither an allegation of performance nor of tender of performance, will be held bad on general demurrer." In the case at bar there is abundantly shown readiness, willingness and ability, all communicated to the other party, and a tender of performance by complying with its part • of the contract so far as it was practicable to do so at the time and place agreed upon for the completion.
We are of opinion that the plaintiff in error is entitled to a reversal of the judgment below and a final decree for specific performance.
Reversed.
Shauck, C. J., Price, Crew and Summers, JJ-, concur.