Court Opinion

ID: 9657062
Source: CourtListenerOpinion
Date Created: 2023-08-23 20:12:09.218092+00
Date Added: 2024-06-11T18:13:40.405117
License: Public Domain

MESCHKE, Justice,
concurring and dissenting.
I respectfully dissent from the remand for entry of summary judgment dismissing altogether the plaintiffs’ claim for enforcement of their option. I would remand for trial.
The written “Lease With Option To Buy” said:
IV.
During the period of this lease and up to and including the 31st day of December, 1988, LESSEE shall have the option to purchase this said property for the sum of $233.00 per acre, the LESSEE to be given credit upon said purchase price for all money paid under this lease.
V.
BUYER will have a reasonable time after the exercise of this option to complete the transaction and SELLER will furnish an abstract of title to said property, continued to date by a certified abstracter, and shall afford a reasonable time to BUYER within which to examine the title to said property and SELLER will have a reasonable time within which to correct any defects in the title that may be discovered by said examination.
VI.
Upon completion of this sales transaction, the SELLER shall convey this said property to the BUYER by a good and sufficient Warranty Deed, giving a fee simple title in and to this said described property free of all liens and encumbrances of any nature whatsoever.
Before he died, Jake quitclaimed the leased quarter-section on April 30, 1987 to his seven children, specifically transferring the option to them:
(The rights hereby conveyed include the existing lease with Mary S. Fries and the option to buy said property as contained in such lease).
After the children farmed that quarter-section, as well as Jake’s other land, during the 1987 and 1988 farming seasons, six of the children retained a lawyer to exercise the option.
According to the uncontradicted affidavit of plaintiffs' attorney in support of their motion for summary judgment, the plaintiffs’ lawyer gave the following “Exercise Of Option To Purchase Real Estate” to Mary on December 7, 1988:
The undersigneds, as attorneys for Douglas N. Fries, Carol E. Dixon, Gerald D. Fries, Thomas N. Fries, Janice Bishop, and Joanne Jesse, do herewith exercise the option to purchase from you a six-sevenths (6/7) interest in the following described real property:
[description omitted]
This exercise of option is taken pursuant to that written document entitled “Lease With Option to Buy”, dated February 1, 1979, between Mary S. Fries and Jake M. Fries.
As provided in said Lease With Option to Buy, we request that you furnish an up-to-date abstract of title to said property and that the same be sent to the undersigneds as attorneys for the individuals named above. As soon as the abstract is examined and the title approved, the full purchase price will be paid to you. The purchase price to be paid shall be the amount stipulated in said Lease With Option to Buy, as well as in the divorce judgment issued in the action entitled Mary S. Fries, Plaintiff, vs. Jacob M. Fries, Defendant.
(My emphasis). This notice of “Exercise of Option” was hand delivered to Mary along with a letter, dated December 6, 1988, that said:
*236As soon as the title is approved, following our examination of the abstract of title, you will be entitled to the full remaining cash payment. As we compute that, the amount owing to you, after giving credit for the 10 years of lease payments, would be $9,668.58 for the 6/7ths interest. However, if our figures are incorrect, we certainly are willing to recompute that.
(My emphasis). Mary did not respond.
The children’s attorney repeatedly wrote to Mary and to her attorney thereafter, without response. A letter on January 4, 1989 said:
The next step would be for your client to furnish us an abstract of title and, assuming that there are no title problems, we will then be in position to make payment of the full purchase price as provided in the lease with option dated February 1, 1979.
(My emphasis, again). Letters on January 23, February 8, and March 15 brought no reply until May 12, 1989, when an attorney representing Mary replied:
I have now finally heard from Mary Fries and she is ready to go to Court if this is what the children want.
Four of the children sued for specific performance, alleging that they “stand ready to pay the full amount of the purchase price as provided in [The Lease With Option To Buy], less appropriate credits for rentals, but [Mary] has refused to cooperate and has indicated an unwillingness to furnish an abstract of title, to furnish the requisite warranty deed, or to any other manner cooperate in the completion of said sale.”
After cross-motions for summary judgment, largely premised on the undisputed facts in the affidavit by plaintiffs’ attorney, the trial court reasoned that the lease-option was “a single non-divisible instrument” and “subject to transfer,” that the four plaintiffs “may exercise their option to purchase to the full extent of their interest therein,” and that Mary’s challenge to the adequacy of her children’s “offer of performance is without merit” because Mary “refused the Plaintiffs’ offer of performance and excused the Plaintiffs from establishing their capacity to make payment in full of the amount necessary to complete the purchase.” The trial court concluded that the option was “a valid transferrable interest in real property” and that the plaintiffs had “validly exercised said op-tion_” The trial court entered summary judgment specifically enforcing the option in favor of the plaintiffs for their undivided interests.
On appeal, Mary argues that the option was not assignable; that it was not validly assigned, including because Jake was not competent to transfer the option to his children; and that the option was not validly exercised because all the children had not joined in exercising the option, and because tender of the purchase price was inadequate.
An option is assignable like other contractual rights. Restatement (Second) of Contracts § 320 (1981); 6 Am.Jur.2d Assignments § 20 (1963). Virtually every real property interest is transferable. NDCC 47-09-02. See also Willow City Farmers Elevator v. Vogel, Vogel, Brantner & Kelly, 268 N.W.2d 762, 764 (N.D.1978) (“[U]nder the ‘modern rule,’ the as-signability of things in action is the rule and nonassignability the exception”). I see no legal reason why this option was not assignable.
While Mary argues that a quitclaim deed cannot be a valid assignment, she submits no supporting authority. Therefore, I see no legal reason why the quitclaim deed was not an effective assignment from Jake to the children.
Mary also questions Jake’s mental competence to transfer property to his children, although it is doubtful that she has standing to do so. The trial court finessed this argument by ruling that Jake’s children held the option as his legal heirs through an earlier, January 4, 1986 will. I agree with that ruling.
Mary argues, however, that a question remains about whether it is Jake's personal representative or his children that hold the power to exercise the option, depending on *237whether the option is real or personal property. That doesn’t matter anymore. In Feickert v. Frounfelter, 468 N.W.2d 131 (N.D.1991), we ruled that Probate Code provisions make clear that title to both real and personal property passes to the heirs at death, and that, so long as the personal representative has not directly exercised power of administration over an inherited asset, a decedent’s heirs may directly deal with and enforce an inherited claim. Jake’s children held the option rights.
The trial court ruled that less than all of the assignees could validly exercise the option, citing Bartz v. Heringer, 322 N.W.2d 243 (N.D.1982). Generally, a cotenant can deal with others insofar as his separate and undivided interest is concerned. 20 Am. Jur.2d Cotenancy and Joint Ownership § 94 (1965). We have held that the failure of one cotenant to join in exercising an option cannot frustrate its effective exercise by another cotenant. Bartz v. Heringer. I agree with Justice VandeWalle that we should seek to construe a contract in a manner which will make it valid, legal, effective, and enforceable. Wessels v. Whetstone, 338 N.W.2d 830, 834 (N.D.1983) (VandeWalle, Justice, dissenting). If an optionor is paid in full, that optionor cannot fairly object that less than all of the optioned property is to be conveyed. Therefore, I would affirm the trial court’s conclusion that this option was validly exercised.
This brings us to the question of whether the optionees made an adequate tender of the purchase price. The majority opinion focuses on a single sentence in a letter accompanying the notice of exercise of the option and, by making its own calculations, finds as a fact that the full price was not tendered. That may be a possible inference from the facts, but I do not believe it is the only one, or even the likeliest one. Since the “Exercise Of Option” states that “the full purchase price will be paid to you,” I cannot agree that a deficient tender is the only permissible inference. “[F]ull purchase price” would ordinarily mean the full balance due to exercise the option. On this appeal, plaintiffs have argued that, “if splitting the property between them and Mary is objectionable to her, as she contends in her brief, they stand ready and willing to purchase the entire quarter section and pay Mary the entire purchase price.... ” Therefore, I believe that tender is a factual question to be properly resolved by the trial court.
Furthermore, as plaintiffs have argued on this appeal, there are issues about whether any greater tender was required. Amann v. Frederick, 257 N.W.2d 436, 440 (N.D.1977) (“The evidence indicates that the [optionors] flatly refused to convey, and did not mention a failure to tender the money as a reason for the refusal. Under the circumstances, it would have been futile to proffer the money, and our law does not require that a buyer perform a futile act when the seller has refused to perform”) (citations omitted). See also Alfson v. Anderson, 78 N.W.2d 693, 703 (N.D.1956) (“He cannot prevent performance and then use lack of performance ... as a bar to specific performance”); NDCC 9-12-17 (“The thing to be delivered, if any, need not in any case actually be produced upon an offer of performance unless the offer is accepted”). Although it may be doubtful whether the trial court could make findings on this issue for summary judgment, the trial court ruled that Mary’s refusal to perform altogether made specific tender of the money unnecessary. Furthermore, paragraph V of the Lease With Option To Buy, upon exercise of the option, does not call for immediate payment of the money. Because I believe that, factually, a tender may have been unnecessary here, I would remand for determination of that question from all of the evidence by trial.
There are issues of fact about the need for tender, and about the sufficiency of tender of the purchase price. We should remand for trial on those issues.
VANDE WALLE, J„ concurs.