Court Opinion

ID: 3938619
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:02:46.570587+00
Date Added: 2024-06-11T14:16:56.460101
License: Public Domain

I concur in the disposition of this case and the matters stated in the opinion of the court. This concurring opinion is written in order to set forth another reason which in the belief of the writer requires the disposition made of the case.
Let it be assumed that the letter of January 5, 1944, relied upon by appellee, is such a written memorandum as satisfies the Statute of Frauds, Art. 3995, V.A.C.S. With this assumption, it is a valid and enforceable option contract to buy the property within the year elapsing between January 5, 1944 and January 5, 1945. It is elementary that this contract was only binding on appellant — in short, it was a unilateral contract. It was an offer upon consideration to enter into a contract with appellee at his option.
In essence it was an offer by appellant to appellee to sell appellee the property referred to therein, within one year, on the condition named therein. This contract appellant could breach, but appellee could not, for it is in no way binding on him.
It is taken to be elementary that to become binding on appellant to sell and appellee to buy, the offer constituting the option must have been accepted in the manner specified in the offer. There can be no good reason advanced as to why the ordinary rules governing offer and acceptance should not be applied to an option contract such as we have here. In order to bind appellant to sell and appellee to buy, appellee must have accepted same within the time limited in the offer. Further acceptance must be in strict compliance to the offer, otherwise no contract to sell could arise between appellant and appellee.
In part the letter of January 5, 1944, is as follows:
"That at any time within one year, starting January 5, 1944 to January 5, 1945, should Curt (appellee) pay me back all the money I have invested, plus operating expenses and other expenses, plus 6% interest, I have agreed to deed him the property back."
Just what is meant by the term "other expenses" used in the offer does not appear. However, for the purpose of this discussion it is assumed that the offer is of sufficient definiteness that if appellee accepted same in strict accordance therewith that thereby arose a contract to sell and a contract to buy the property — in fact, if the offer had been complied with the equitable title would have vested in appellee. The time within which the option was to be exercised was very clear. The manner of its acceptance was also very clear "if Curt shall pay me all the money * * *". Beyond the shadow of a doubt appellee has neither paid nor tendered this amount. This option by its very terms required that acceptance be manifested by making the payment required. This was the condition of the option. In this respect there is no essential difference between the case and the case of Killough v. Lee, 2 Tex. Civ. App. 260, 21 S.W. 970. In that case the contract provided in part:
"The price agreed upon is twelve thousand dollars cash, upon payment of which the said Chas. H. Lee will make deed * * * ."
The opinion was written for the court by Judge F. A. Williams, then a judge of the Court of Civil Appeals. In the course of the opinion it is stated:
"In cases of options, there is some conflict of authority as to the essentiality of the time of payment. The principles applicable are thus stated: `Where the contract is really an offer on one side, with a provision that this offer must be assented to and accepted, when a mere acceptance is contemplated, or payment must be made, when payment was the act of acceptance contemplated at or before a specified date, then, of course, the act of assent or of payment must be done within the prescribed time, and time is, from the very form of the contract, essential. If, therefore, a *Page 243 
vendor agrees to convey if payment be made at or before a given date, or if an option is given which is to be accepted by payment within a given time, then the time of payment is certainly essential. In fact, payment is a condition precedent to the vesting of any right in the vendee. If, however, the offer or option given requires assent and acceptance within a given time, such assent must be made within the time prescribed, and the contract thereby becomes concluded and mutual; but whether time is essential with respect to subsequent performance must depend upon its object or the nature of its subject-matter.' Pom. Cont. par. 387. The contract under consideration required not simply that appellant should assent to the terms proposed within the six days, and pay the price at some subsequent time, but that he should buy within that time, paying the price in cash. This payment was made essential by the agreement of the parties, which the court cannot disregard without infringing upon their right to shape their own contracts as they deem best."
Here, as in Killough v. Lee, supra, the act evidencing acceptance was the complete performance of the obligation arising from acceptance. Appellee concedes his right of reconveyance was conditioned upon the payment by him of a sum which he estimated at about $300,000.00.
The real question in this case is did a contract to buy this property ever come into existence?
The option contract and the contract arising from the acceptance of the option are two separate and distinct contracts upon different and distinct considerations. C. C. Slaughter Cattle Co. v. Potter County, Tex. Civ. App. 235 S.W. 295, affirmed Tex.Com.App., 254 S.W. 775.
It is said in the case of Roberts v. Armstrong, Tex.Com.App., 231 S.W. 371, that defendant in error did not by the option contract acquire any title to the land; at most he secured only the right to acquire an interest in the lands by complying at his election with the stipulations on this part. The opinion of the Commission of Appeals was expressly approved by the Supreme Court. This case likewise discusses as to who is entitled to profit before the exercise of the option.
An option to buy confers no title, it is only converted into a contract to sell by a manifestation by the optionee in the manner provided, of his election to buy. Knox v. Brown, Tex.Com.App., 277 S.W. 91.
"An option contract and a contract of sale are in fact two separate and distinct contracts, i. e., an option contract and the agreement to sell. It is not a contract by which one agrees to sell and the other to buy, but is only an offer by one to sell within a limited time and a right acquired by the other to accept or reject such offer within such time. An option is a unilateral agreement binding upon the optionor from the date of its execution, but it does not become a contract inter-parties in the sense of an absolute contract to convey and purchase until exercised by the optionee. The sale or giving of the option does not of itself constitute an executory contract for the sale of land; this latter only arises after the option has been duly exercised." 55 Am.Jur. p. 495, par. 28.
It was found by the jury that on or about October 3rd, 1944, appellant told the appellee that she would not reconvey to plaintiff the assets referred to in the letter, if he was borrowing the money to be paid to her and was mortgaging the assets in order to obtain such money, and that she would not retransfer such assets if any of the money to repurchase said assets was loaned to appellee by his brother or by Mr. Taggart, and that she further stated to plaintiff that she was selling a part of the cattle for $20,000.00 and intended to sell the Granite Peaks Ranch, and that she would not give plaintiff credit for the proceeds of the sale of the cattle or the Granite Peaks Ranch. It was further found that but for such statement appellee would have, prior to January 5, 1945, tendered to appellant the money which under the letter dated January 5, 1944, appellee would have been required to pay in order to reacquire the assets to which he would have been entitled under the letter of January 5, 1944. The first finding was considered sufficient, it is assumed, by the trial court, to justify the legal conclusion that appellant had *Page 244 
breached her contract to keep the offer open for one year. However, one looks in vain for any obligation on the part of appellant to refrain from either selling the cattle or the Granite Peaks Ranch. Such sales seem to have been provided for in a letter claimed to be the source of appellant's legal obligation. In the letter there is no provision for crediting appellee with either the sale of the land or the cattle. However, let it be assumed that there was sufficient evidence to justify a finding that appellant renounced her obligation to keep the offer open for one year, it is conceded that during the entire year she had the ability to make the conveyance. This is absolutely true as to the land, and substantially true as to the cattle.
If appellant on October 3, 1944, renounced her option contract she did not breach a contract to sell the property. There was no contract to buy and sell in existence on that date. There was lacking a mutuality of obligation for the reason appellee had never exercised his option.
In this case appellee had two optional courses open. He might elect to accept her repudiation and sue for damages; he might refuse to accept her repudiation and insist on performance. Greenwall Theatrical Circuit Co. v. E. Markowitz, 97 Tex. 479, 79 S.W. 1069, 1071, 65 A.L.R. 302.
In the above case, the following is quoted with approval:
"The promisee, if he pleases, may treat the notice of intention as inoperative, and await the time when the contract is to be executed and then hold the other party responsible for the consequences of nonperformance; but in that case he keeps the contract alive for the benefit of the other party as well as his own. He remains subject to all of his own obligations and liabilities under it, and enables the other party not only to complete the contract, if so advised, notwithstanding his previous repudiation of it, but also to take advantage of any supervening circumstances which would justify him in declining to complete it. On the other hand, the promisee may, if he thinks proper, treat the repudiation of the other party as a wrongful putting an end to the contract, and may at once bring an action as on a breach of it; and in such action he will be entitled to such damages as would have arisen from the nonperformance of the contract at the appointed time, subject, however, to abatement in respect of any circumstances which may have afforded him the means of mitigating his loss."
The breach of a unilateral contract by repudiation can not bring into being a new bi-lateral contract. If appellee elected to refuse to accept appellant's repudiation of the option contract another and different contract could not come into being except by a tender by appellee of the performance of the condition which would create an unconditional obligation to sell. To hold here that the renunciation of the option by appellant had a legal equivalency to the acceptance of the offer would give appellee a two year option instead of a one year option as provided in the letter. Appellee never, prior to the filing of this action, bound himself to accept and pay for this property in accordance with the terms of the option. In order to be entitled to a conveyance, appellee should have accepted the offer entitling him to a reconveyance of the property. This offer was to convey on repayment. This repayment he never tendered during the life of the option. Appellant had the ability during the time limited in the option to perform in accordance with her offer. The attempted withdrawal of an option before the manifested intention to exercise same in accordance with its terms did not create a contract to sell and buy, mutually binding upon appellee and appellant. In order to have been entitled to a conveyance appellee should have accepted the offer entitling him thereto in the manner set forth in the offer. Payment he never tendered during the life of this option. Where there is an obligation to make a tender or payment it is thought an unqualified refusal in advance would excuse same, but not so where a tender is necessary to bring into existence a legal obligation to convey. 27 R.C.L. p. 343, par. 39. Clark v. Muirhead, 245 Mich. 49, 222 N.W. 79.
I concur in the holding that the evidence established that within the year appellee did not have the financial ability to comply *Page 245 
with the condition of the option. It is further my opinion that appellee never became unconditionally bound to buy this property.