Court Opinion

ID: 6739336
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:20:47.077247+00
Date Added: 2024-06-11T16:01:54.645680
License: Public Domain

Birdzebl, J.
(concurring). I concur in the holding of the court that the plaintiff and respondent is not entitled to a specific performance of tbe contract, but for reasons other than those stated in the majority opinion.' With due respect to the opinion of the majority, I find my views to be at variance with those expressed in the opinion of Mr. Justice Grace, both as to some of the facts and as to the legal conclusions drawn from the facts therein stated. I am of the opinion that the evidence shows the so-called option contract to have been fairly entered into; that it stated the substance of the understanding between the parties with reference to the terms upon which Archer was willing to dispose of his land; and that the purchaser sufficiently manifested his desire to purchase within the time specified in the option or offer.
I am further of the opinion that the facts stated with reference to the financial responsibility of J. B. Streeter or the J. B. Streeter Corporation are foreign to any issue in the case, and should not be considered as having any bearing, for the reason that it affirmatively appears in the record that the plaintiff was able to comply with all of his obligations, and that the rights of the defendant could be amply protected in the decree or judgment. In fact the money due was tendered in court. Even if it should be conceded that the plaintiff is insolvent, this would furnish no reason for denying him specific performance, as this remedy is allowable to all on equitable terms regardless of their financial responsibility.
It is said that all of the provisions of § 7198, Comp. Laws 1913, are applicable to the specific performance of the contract in question, but as I view the facts this section is in no wise applicable. It may be conceded that there was no consideration paid for the so-called option contract, in which event it would not amount to a binding, irrevocable, continuing offer on the part of Archer to sell his land for the price stated. But it would still amount to a continuing offer which would result in a contract if accepted within the time therein limited, and under the evidence it seems to me that it was so accepted.lt is therefore *263immaterial whether any consideration was paid at the time the option contract—listing agreement or offer (whichever it may in fact be)— was signed by the defendants. See 25 R. C. L. p. 236. There it is said: “By his election to accept and exercise the option, the contract becomes binding on the holder, and any objection to its enforcement on account of want of mutuality is removed.” Bor purposes of the remedy sought by the plaintiff in this case, and for purposes of the application of the statute (§ 7198), the term “adequate consideration” relates only to the consideration for the sale, and not to the consideration for an option preceding the sale, if such existed. “The inadequacy of consideration for an option to purchase real estate cannot defeat the right to performance of the contract to convey after the option has been accepted, if the price to be paid for the land is adequate.” 25 R. C. L. 237. Under the evidence in this case there could be no question of the adequacy of the consideration agreed to be paid by the purchaser, for it corresponds exactly with what the sellers understood they were to obtain. They themselves admit it in their own testimony. They were to receive $11,000 net for the land, and if they regarded this as an adequate consideration it should not be otherwise regarded by the court. Bor manifestly, remedies upon contracts, when fairly made, proceed upon the basic principle that parties are free to make such contracts as they choose. It is well-settled that an option contract is specifically enforceable at the instance of the one who avails himself of the option. 36 Cyc. 625; 25 R. C. L. 237. “In fact,” says Pomeroy, “mutuality has nothing to do ordinarily with contracts of option. The option is only a binding offer. The promisor has parted with the right to withdraw his offer. There is nothing to enforce in equity before the exercise of the option, as the promisee has already obtained his right,—to have the offer kept open. Upon the exercise of the option, i. e., the acceptance of the offer—and the filing of the bill by the promisee would be one way of exercising it,—the option ceases as an option, and equity has an ordinary bilateral contract to deal with.” 5 Pom. Eq. Jur. §2195 (§ 773). The promisee thus ordinarily renders himself subject ¡to a like remedy at the suit of the adverse party.
It is equally well settled that specific performance will not be denied merely because circumstances arising subsequently and anterior to the time of its performance render the subject-matter of much greater value *264to the purchaser. Pom. Eq. Jur. § 2219 (§ 797); 25 R. C. L. 254; 36 Cyc. 616, 617. It clearly appears in this record that at the time the first negotiations were had the parties looked forward to the contingency of the crop; for it was expressly provided in the contract or offer signed by the defendants that, in case of purchase, the plaintiff or the purchaser was to pay the defendants for the work of harvesting and hauling, or whatever work was done by them in the harvesting and marketing of the crop. Archer himself testified that at the time he listed the land with Streeter, that he (Streeter) wanted him to throw in the crop, and, to use Archer’s own words, he said: “ ‘I will throw in half of it,’ and he [Streeter] said, ‘No, I won’t take it that way, it is not worth it, if you will throw in all of it may be I can do something with it,’ and I said, ‘I do not want to give all the crop, but if you can sell that way I will list it with you.’ ” It is clear, then, that Archer understood that he was selling both the land and the crop, and any provision in the agreement giving him a right to be reimbursed for the work and expense prior to the sale would be in his favor. Such provision is made in the contract, as above indicated. I am of the opinion that the so-called option contract amply evidenced the true agreement of the parties with respect to the crop. It would follow from what has been stated that, upon acceptance by the plaintiff, there was a mutually binding contract for the sale of the land.
From the fact .that a mutually binding contract exists, it does not follow, however, that. it is one that should be specifically enforced. While I see no element of unfairness, fraud, hardship, inadequacy of consideration, or lack of mutuality of obligation present, which would deprive the plaintiff of the remedy of specific performance, it is quite apparent, in my opinion, that there is lacking the element of mutuality of remedy, such as is required under our statute as previously construed and applied by this court. Section 7200 provides that an agreement for the sale of property cannot be specifically enforced in favor of a seller who cannot give to the buyer a title free from reasonable doubt, and §7193 provides:
“Neither party to an obligation can be compelled specifically to perform it, unless the other party thereto has performed, or is compellable specifically to perform everything to which the former is entitled wider *265the same- obligation, either completely or nearly so, together with full compensation for any want of entire performance.”
In the case of Knudtson v. Robinson, 18 N. D. 12, 118 N. W. 1051, this statute was construed as preventing specific performance in favor of the purchaser, where the vendor could not have compelled specific performance by reason of his inability to alone enter into a contract for the sale of a homestead. Under the contract in that case Eobinson, the defendant, had agreed to sell 960 acres of land, 320 of which was a homestead. In commenting upon the lack of mutuality of remedy under the statutes above quoted, this court, speaking through Chief Justice Morgan, said:
“Since Eobinson could not enforce specific performance against Knudtson under the facts of this case, specific performance could not be enforced by Knudtson against Eobinson. There must be mutuality of obligation and remedy between the parties before specific performance is enforceable against either, except in cases where there has been performance by the party seeking to enforce specific performance. This is a statutory principle in this state, as laid down in § 6610, Revised Code, 1905 (id. § 7193, Comp. Laws 1913).”
After quoting the statute, the discussion continues:
“The remedy must be reciprocal. Performance by the party seeking to enforce performance under this section of the Code entitles such party to have the contract specifically enforced, although there was no mutuality of remedy when the contract was entered into. So far as the enforcement of contracts that are not mutual, as to obligation or remedy, this section is only a declaration of the common-law rule on this subject. Pederson v. Dibble, 12 N. D. 572, 98 N. W. 411.
“The appellant contends that an offer of performance satisfies the requirement of the statute, and that, by tendering and bringing into court the sum claimed to be actually due under the contract, the non-mutuality of the contract is rendered immaterial. The language of the section is explicit, that performance or the right to compel substantial performance of the contract must be shown before contracts that are not mutual can be specifically enforced. ‘Performance’ is a word of settled meaning, and means the doing or completing of an act. ‘An offer to perform’ and ‘performance’ are not synonymous in meaning. Without performance the party seeking enforcement of the contract is *266not within the provisions of the statute when he has tendered performance or simply shown a willingness to perform. Crumbly v. Bardon, 70 Wis. 385, 36 N. W. 19; Lattin v. Hazard, 91 Cal. 87, 27 Pac. 515.”
It is clear that in the instant case the plaintiff has not performed. The mere deposit of the money at the office of the Streeter Corporation, at the place where the money was payable, only amounts to a tender, and not to a performance. It does not discharge the obligation to pay. This could only have been done by complying with the statute relating to the extinction of obligations. Section 5815, Comp. Laws 1913, states the requirements in this respect. It reads:
“An obligation for the payment of money is extinguished by a due offer of payment, if the amount is immediately deposited in the name of the creditor with some bank of deposit within this state of good repute, and notice thereof is given to the creditor.”
This statute was not complied with and it is clear that nothing more was done by the plaintiff than to offer to perform or tender performance. This w'as expressly held in Knudtson v. Robinson, supra, not sufficient to satisfy the statute.
But the statute obviates the necessity of performance by the plaintiff as a prerequisite, where the defendant is “compellable specifically to perform everything to which “the other party is entitled under the same obligation, with allowance for compensable deficiencies. Archer purported to bind himself under this contract “to sell and convey by warranty deed or by contract for deed to. J. B. Streeter,” and to place his warranty deed or contract with “J. B.. Streeter, Inc.,” at once for delivery either to the second party (J. B. Streeter) or to whomsoever the latter should direct, and no portion of the purchase-price money paid to J. B. Streeter, Inc., was to be paid over to the defendant until the “furnishing of the abstract of title showing good and marketable title in first party and executing the deed of conveyance by first party.” It is clear, under the facts appearing in this record, that Archer never had a marketable title to the land in controversy. He had only an equitable title under a contract for deed, which, according to its terms, was not assignable without the consent of the owner of the legal title. He expressly contracted to sell more than he had to sell, and it is obvious that he could not be compelled to transfer a title which he could not acquire without the consent of a third party. See Norris *267v. Fox, 45 Fed. 406. Under the record in this case it is clear that Archer was not selling his mere equity in the land. Indeed, it appears that the plaintiff is attempting, in this proceeding, to obtain more than Archer’s equity; for, though Mciklejohn, the owner of the legal title, is not made a party to the action, an attempt is made, through the filing •of affidavits, to direct the application of a portion of the consideration of money to the discharge of his claims. In fact, findings are made which purport to adjudicate rights between Archer and Meiklejohn, the court reserving, however, the right to make the latter a party. The plaintiff has not shown himself to be willing to accept what Archer could transfer. In these circumstances the vendor is not estopped or precluded from asserting his inability to perform to the extent demanded. Whatever might be the case, if Archer had acquired a marketable, legal title before this action was begun, it seems that there is no room to doubt that so long as he did not have the character of title which he was contracting to convey, he could not have compelled Streeter to perform. It follows, then, from the previous construction of the statute referred to, that Streeter cannot compel him to specifically perform, but should be remitted to his action for damages. (For a case parallel on the option feature and somewhat analogous on the question of the remedy, see Smith v. Bangham, 156 Cal. 359, 28 L.R.A. (N.S.) 522, 104 Pac. 689).
What is said above is said in the light of the previous construction of the statute by this court, which treats the rule requiring mutuality of remedy as being one of reciprocity. It may be that, for practical purposes, the rule should be considered as satisfied when, at the end of the suit, the defendant may have the full benefit of the plaintiff’s performance of his contract. But the question does not seem to be an open one in this state. I therefore concur in the reversal for the reasons above indicated.
Christianson, Oh. J. I concur in the opinion prepared by Mr. Justice Birdzell.