Court Opinion

ID: 9846979
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:51:38.441278+00
Date Added: 2024-06-11T09:16:58.219244
License: Public Domain

Mallery, J.
(dissenting) — The majority opinion cites and relies , upon the rule that
“In the absence of any provision in the option contract with reference to the manner by which an option can be exercised, it is the general rule that any manifestation, either oral or written, indicating an acceptance on the part of the optionee is sufficient. 55 Am. Jur. 507, § 38; 1 Corbin on Contracts 872, § 264.” (Italics mine.)
This rule is not applicable to the facts of this case because of its specific provision requiring the payment of the full cash purchase price before the option expires. The rule relied upon applies to that type of option which is in the nature of an offer for a promise. In such a case, of course, the acceptance is made by making the promise. The resulting contract is bilaterally executory.
The type of option here in question, which requires the payment of the cash before the expiration date, is an offer for an act — the act of paying or tendering the cash. Thus, the exercise of the option results in a contract executory only on the sellers’ part by way of conveying the title. Such options are intended to eliminate credit negotiations, contingencies, and hazards.
In Killough v. Lee, 2 Tex. Civ. App. 260, 21 S. W. 970, the court said:
“ ‘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 *137be 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 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.’ Pome, on Con. sec. 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. Thus payment was made essential by the agreement of the parties, which the court can not disregard without infringing upon their right to shape their own contracts as they deem best.”
See, also, Bergman v. Dykhouse, 316 Mich. 315, 25 N. W. (2d) 210.
An option to purchase for cash is exercised by payment of the cash, not the giving of a bare unsecured promise to pay.
I dissent.
July 10, 1958. Petition for rehearing denied.