Court Opinion

ID: 5654722
Source: CourtListenerOpinion
Date Created: 2022-01-11 23:41:37.354409+00
Date Added: 2024-06-11T08:38:45.188965
License: Public Domain

WOOD, (W. J.), J.
I dissent. The instrument executed by the parties on April 15, 1943, gave to plaintiff for a valuable consideration an option to purchase the property involved for the sum of $500,000 on or before May 1, 1944. The parties concurrently executed a management agreement giving plaintiff the management of the property, which was subject to cancellation by defendant on thirty days’ notice. The option agreement is of considerable length and is printed on eight pages of the appendix to plaintiff’s brief. On the fifth page there appears the statement that the “option may be exercised ... on or before May 1, 1944, provided, however, that the Management Agreement . . . shall not have theretofore been cancelled, it being the understanding of the parties hereto that the within option shall cease and determine upon the posting of written notice of intention to cancel the aforesaid Management Agreement. ...” This language was placed in the instrument by defendant’s attorney. Plaintiff, who is not a lawyer, did not obtain legal advice.
An option relating to the sale and purchase of real estate is a contract by which the owner of property gives to another the exclusive right to purchase the property at a stipulated price and within a specified period. When given for a valuable consideration, as in the present case, the owner may not cancel the optionee’s right to purchase during the period specified in the contract. (25 Cal.Jur. 506; Walter G. Reese Co. v. House, 162 Cal. 740 [124 P. 442].) If an instrument purporting to confer an option is cancellable at any time by the owner it lacks an essential element of an option. It is in *346effect merely an offer to sell which can be withdrawn at any time before the offer is accepted. A purported option which gives the owner the right to cancel at any time permits him to eliminate the purported optionee upon the appearance of a prospective purchaser. It is claimed by plaintiff that such a purchaser appeared in the present case, whereupon notice of intention to cancel was posted, resulting, according to defendant’s claims, in the termination of plaintiff’s rights. Defendant conveyed the property to a third party within thirty days from the posting of notice to plaintiff.
When two or more contracts are made at the same time relating to the same matters between the same parties and are parts of one transaction they are to be construed together. (Civ. Code, §1642.) It is manifest from a reading of the option agreement and the management agreement that it was the intention of the parties that plaintiff should have a real option to purchase. The agreements did not constitute a mere offer to sell, revocable at any time before acceptance. This view is supported by several well established rules of construction, which, in my opinion, are applicable to the case and which compel a reversal of the judgment. A contract must be so interpreted as to give effect to the intention of the parties. If the terms of a promise are in any respect uncertain the contract must be interpreted in the sense in which the promisor believed at the time of making it that the promisee understood it. Particular clauses of a contract are subordinate to its general intent. (Civ. Code, §§ 1649, 1650.) Repugnant clauses in a contract are subordinate to the general intent and purpose of the whole contract. Words in a contract which are wholly inconsistent with the main intention of the parties are to be rejected. In cases of uncertainty the language in a contract should be interpreted most strongly against the party who caused the uncertainty to exist. (Civ. Code, §§ 1652, 1653, 1654.) The conclusion is inescapable that the language beginning with the expression, “it being the understanding of the parties,” is repugnant to the general intent of the whole contract; that the officers of defendant corporation' believed at the time of the making of the contract that plaintiff understood he was to have an option cancellable on thirty days’ notice. The language in question was inserted by defendant’s counsel and should be interpreted most strongly against defendant. In my opinion the contract of the parties should be given the construction that in accordance with the intent of the parties defendant gave to plaintiff a real and effective *347option to purchase the property and did not give merely a revocable offer to sell. Defendant should not be allowed to escape its obligation.
The judgment should be reversed.
Appellant’s petition for a hearing by the Supreme Court was denied February 15, 1945. Carter, J., and Schauer, J., voted for a hearing.