Court Opinion

ID: 9691895
Source: CourtListenerOpinion
Date Created: 2023-08-25 15:22:53.260834+00
Date Added: 2024-06-11T18:19:27.713314
License: Public Domain

BLOODWORTH, J.,
concurs specially.
I concur in denying the application for rehearing, although I have concluded that I should withdraw my concurrence in Mr. Justice Faulkner’s original opinion and concur specially. My reasons are stated below.
In the opinion, the written agreement dated March 11, 1972, is construed as an “option to purchase,” the term of the option period being 60 days. The opinion then holds that a binding contract was created when the prospective purchasers attempted to “exercise the option” even though more than 60 days had elapsed at the time of exercise because the “option to purchase” did not expressly provide that “time is of the essence.” I cannot agree.
In Fulenwider v. Rowan, 136 Ala. 287, 34 So. 975 (1902), the Court quoted with approval the following, viz.:
“In 28 Am. & Eng.Ency.Law (1st Ed.) 77, it is said: ‘The right to purchase land is frequently the subject of contract, and such right may be styled an option. It is not an estate in land and an option is not a contract of sale. An option must be for a limited time, and if none is mentioned, will remain in force for a reasonable time to be determined under all the circumstances of the case. Time is thus always of the essence of the contract.’ ” (Emphasis supplied.) (136 Ala. at p. 304, 34 So. at p. 979)
The reason for this rule is explicitly stated in Murphy v. Schuster Springs Lumber Co., 215 Ala. 412, 111 So. 427 (1926):
“ ‘It would be inequitable to hold one party bound beyond the time fixed for performance, and permit the other party, at his election, to postpone performance to suit his convenience or interest, with no obligation to perform at any time. * * * Again, to permit the optionee to await his convenience to comply with the terms upon which his option depends burdens the owner with obligation to hold the land in its uncleared, nonproducing condition, he paying the tax thereon.’ (Citation omitted.)
“This is in accord with the generally recognized principle that in option contracts, unless expressly negatived, time is always of the essence of the contract. (Citation omitted.)” (215 Ala. at p. 415, 111 So. at p. 429)
*323Thus, it is well settled that in an “option to purchase” time is always of the essence unless the contrary appears and if an “option to purchase” is not exercised within the time provided, it expires by its own terms. Nevertheless, I concur in the opinion that the judgment of the trial court should be reversed.
In my judgment, the document dated March 11, 1972, is not an “option to purchase” but a binding executory bilateral contract. In such a contract, time is not of the essence unless expressly stated therein or unless it naturally follows from the circumstances of the particular case. Fulenwider v. Rowan, supra.
Therefore, I agree that appellants’ tender of performance on May 13, 1972, came within a reasonable additional time (three days) and entitled appellants to specific performance of the installment purchase contract.
An examination of the document in question is necessary for understanding why this document is not an “option to purchase” but an executory bilateral contract to sell. The document provides as follows:
Contract & Agreement Snider-Holk
March 11, 1972
I, Frances G. Mallory, Agent, have on the above date received from H. I. HOLK and EULA A. HOLK, husband and wife, Earnest Money Binder in the amount of $500.00, and the following offer to purchase the following described real estate, subject to the terms and conditions as hereinafter set out, viz:
Lot 2, Block 1, of the Romeo-Skipper Subdivision of Gulf Shores, Alabama.
Subject to:
1. The Owner accepting an offer of $40,000.00 for the above described property, including the $500.00 Earnest Money Binder, with $10,000.00 being paid down, and the balance being payable under a Contract and Agreement to Buy and Sell between the Owner and the Purchasers, over a period of five (5) years, payable annually, plus interest at 7% on the unpaid principal balance due. The Purchasers shall have the privilege of pre-payment and no penalty.
2. The Owner shall furnish a Warranty Deed in proper Alabama form when the Contract and Agreement is paid in full. A Survey of the premises will be made prior to the execution of the Contract and Agreement, with a copy of the Plat and Certificate of Survey being given to the Purchasers, along with a Title Insurance Binder covering the property, showing that title to the property is in the Owner. A Title Insurance Policy showing free, clear and merchantible title to the property will be furnished by the Owner to the Purchasers at the time the Contract and Agreement is paid in full.
3. This offer shall expire at mid-night March 25, 1972. If this offer is not accepted prior to this time, then this offer shall be considered null and void, and of no force and effect, and the Earnest Money Binder in the amount of $500.00 shall be returned to Mr. and Mrs. H. I. Hoik by Frances G. Mallory. If this offer is ac*324cepted, and the undersigned do not consummate the transaction after compliance by the Owner, within a 30 to 60 day period after acceptance of this offer by the owner, then the Earnest Money Binder shall be retained by the Owner as damages.
DONE this the 11th day of March, 1972.
Received for the Owner on this the 11th day of March, 1972.
H. I. Hoik_SEAL
Eula A. Hoik SEAL
Frances G. Mallory
WITNESSES:
(Alameda Johnson) (Frances G. Mallory)
Accepted this the 15th day of March, 1972.
_Edna E. Snider_SEAL
WITNESSES:
E. Fox Henderson
Frances G. Mallory
This instrument contains an offer to purchase by appellants, the prospective purchasers. When appellee, owner, accepted that offer, an executory contract to buy and sell was created. Appéllants’ (purchasers) offer to buy was converted into a promise to buy and appellee’s (owner) acceptance of the offer was converted into a promise to sell. Appellants did not purchase an "option to purchase” by giving $500 as consideration therefor. Appellants paid the appellee owner $500 as earnest money, or as a partial downpayment, which was to be kept by the owner as damages should the purchasers breach the bilateral executory contract by failing to perform. Furthermore, as the original opinion holds, the agreement contains the requisites for specific performance.
Regardless as to whether the agreement is labeled an “option to purchase” or an “executory contract to sell,” it is clear that, as a matter of law, appellants did not breach the contract by being three days late. The agreement states that action by the appellants was due only after appellee, owner, furnished appellants with a certified survey and a title insurance binder for the property. Appellee owner never attempted to comply with these provisions.
The “contract and agreement” (referred to in the March 11 contract) is, in effect, a substitute for the deed and mortgage deed and is in substance an installment purchase contract, not unlike the traditional conditional sales contract, by which seller retains title pending payment of all the purchase price. The subsequent delivery of the deed at the end of the five-year term is analogous to the formal satisfaction or cancellation of a mortgage deed when the mortgage is paid in full.
Thus, it is that, although I cannot agree with parts of the original opinion, I do *325concur in the reversal of the judgment of the trial court and in the denial of the application for rehearing.
ALMON, J., concurs.