Court Opinion

ID: 5167864
Source: CourtListenerOpinion
Date Created: 2022-01-02 04:49:44.867111+00
Date Added: 2024-06-11T08:25:56.741885
License: Public Domain

BUCK, J.,
Dissenting. — Conceding, for the present, that the contract in question is a lease with the option to purchase, when does the lease go into operation, and when is the option to purchase exercised ? It seems to be mutual. It is signed by both parties, and each covenants to do certain acts. As a lease it was partly executed when the defendants entered into possession of the mine. Until the option to purchase was exercised the defendants held as lessees. Whenever they exercised that option by the terms of the instrument they held as vendees. A sale is a contract whereby the ownership to property is transferred. The sale is completed when the possession and title pass from vendor to vendee. In the case at bar the possession was in defendants, but under the lease the title remained in the plaintiffs, the lessors. "When the option to purchase was exercised the title passed from the lessors to the lessees, and their relation changed from lessors and .lessees to vendors and ven-dees. The lessees having possession under an agreement to purchase, at a purchase price of $40,000, the title passed whenever they exercised their option by paying the purchase price, or any part of it. By the terms of the contract all money paid to the plaintiffs was to be credited on the purchase. Whenever, therefore, a credit was so made, a part of the purchase price was paid, and I apprehend the option to purchase was exercised. *229We cannot call this payment royalty or rent, because, to do so, would contradict the express provisions of a sealed instrument. After the purchase this contract, which, up to that time, had operated as a lease, became, in its legal effect, a mortgage to secure the payment of the unpaid purchase price.
It is said that under the terms of this instrument the defendants could abandon the venture at any time. This provision enables us to appreciate the importance of that provision which makes the money paid purchase price. To induce defendants to continue the venture, and not abandon it, the plaintiffs stipulate that every dollar paid shall be a credit in payment of the mine. Can we say after, under this inducement, the defendants have expended a large amount of money, and paid plaintiffs more than half the amount of the purchase price, that the plaintiffs may alter or disregard the express covenant which has been the inducement to defendants-’ outlay, and say this $21,000 which you have paid us is only rent — you have not yet paid us any part of the purchase money — you have never exercised your option to purchase? It is claimed that time is of the essence of this contract. The general rule for the purchase of land is that time is not of the essence of the contract. It is claimed, however, that mining property constitutes an exception. Certain text-writers are quoted as sustaining this exception. An inspection of these references, however, gives us but two or three ancient English cases. No American cases are cited. If this exception is established by adjudication, it is remarkable that upon this coast, in the forty years of mining, no such has been adjudicated.
The terms used in the contract specifying the time at which the entire purchase price should be made, and when the plaintiffs might re-enter, cannot be said to determine that time is of its essence; for much stronger language has been adjudicated as meaning differently. Conceding, however, for the argument, that this exception exists in the case of mere options for the purchase of mining property, the question remains, Is this contract simply an option? It is admitted that it is unusual in its terms, conditions and covenants, and that it is difficult to construe. If we attempt to construe it on the theory that it is simply a lease, with an option to purchase, the terms used *230will be unnecessary and confusing. If we consider, however, the circumstances of the parties and the property at the time the contract was executed; that, as seems established by undisputed testimony, the plaintiffs wished to sell and the defendants to buy; that nothing whatever was said of leasing the property, and that the word was first used in the contract itself; and interpret this instrument with the. light which these circumstances afford — we may understand the contract to be, what it is alleged to be, more than a mere option to purchase; that it was intended to secure the defendants in an anticipated large expenditure of money, and to enable them to secure the fruit of their labor by finally obtaining the title to the property; and also to secure the plaintiffs, through the covenants to re-enter, against the loss of any portion of the purchase price. If, indeed, it is conceded that it is generally understood by miners that time is of the essence in the mere option to purchase mines, that fact may account for the unusual covenants in the contract, and indicate that they were intended to guard. against that very construction, and protect the defendants against it.
In addition to these considerations, in considering the relief sought by plaintiffs in enjoining defendants from occupying the disputed premises, we should remember that the plaini tiffs covenant in the contract to give defendants a deed, free and clear of all encumbrances, of the premises in dispute. It is admitted that at the time when they claim the $40,000 should have been paid, and at the time this action was commenced, the property was, and as far as appears is yet, encumbered by a mortgage of at least $7,000. It is alleged that, after the alleged termination of the lease, demand was made of defendants for the premises. Was a mere demand sufficient? Should not that demand have been accompanied with an offer to fulfill on their part? This action to enjoin defendants and dispossess them of the premises is, in effect, an action for specific performance against defendants. The plaintiffs rely upon the strict letter of the law. They who seek equity must do equity, and I think the rule, applies that a party who seeks specific performance must first be prepared to do equity. This the plaintiffs have never done. It is said *231that the amount of this encumbrance might have been deducted from the contract price; that the plaintiffs intended to pay this encumbrance out of the purchase price. The defendants were not required in the contract to provide for this encumbrance, nor to pay before it was discharged. Over $21,000 had already been paid, and yet the encumbrance of $7,000 was unprovided for.
Are the plaintiffs in position to invoke this hard relief against defendants when they have never offered to perform, and have never been in a condition to fulfill, on their part ? I think the suggestion that this encumbrance might have been provided against by retaining its amount by defendants is not tenable. This would involve a new contract; plaintiffs'claim under the written one set out in the complaint. It is suggested that defendants’ tender of the balance due, made six months after the time when the lease terminated, is too late. I think equity will regard the plaintiffs’ action as asking for specific performance of the contract, as they allege it to be, and defendants’ cross-complaint in response thereto as setting up and praying specific performance, as they understand the contract; that the defendants’ tender is made responsive to plaintiffs’ • demand, and is sufficient in time. I think this view is fully sustained by the authorities cited upon the argument, but I have not the time to classify them. For these reasons I cannot •assent to the opinion of the court.