219 Pa. 279 | Pa. | 1908
Opinion by
This is a bill in equity asking for the specific performance of a contract in writing. At the beginning of our inquiry it is necessary to determine whether the agreement is an option to purchase, or an absolute contract to convey. The learned court below has found as a conclusion of law that the agreement entered into between the parties was not an option to purchase, but a completed contract of sale, containing mutual and dependent covenants on the part of the vendor and vendee from the date of its execution. We cannot accept this as the proper interpretation of that instrument. Rea was the owner of certain real estate underlaid with coal. Ilustead and Semans were engaged in the business of taking options on coal lands. Among others they secured the agreement, the specific performance of which is asked in this proceeding. It was under seal and signed by appellant. It is perfectly clear that all of the interested parties considered it an option to purchase and not an absolute contract of sale. It was so treated by Rea, party of the first part, and by Ilustead and Semans, parties of the second part, and by their assignee, Barnes, who, in order to exercise his option before its expiration, served upon appellant a written notice of his election to purchase the coal upon the terms specified in the agreement. It is true Rea agreed to sell and convey to Ilustead and So-mans, their heirs and assigns, all of the Pittsburg vein of coal underlying the tract of land described in the agreement upon the terms and conditions therein contained. If these words stood alone, the intention of the parties to enter into an absolute contract to convey would be apparent, and under such circumstances the covenants would be considered mutual and dependent from the date of the execution of the agreement. They, however, do not stand alone, and the intention of the
An option is an unaccepted offer to sell and convey within the time fixed and upon the conditions set forth in the written agreement: McMillan v. Philadelphia Company, 159 Pa. 142. In the evolution of modern business methods this has grown to be the prevailing custom in making sales of coal lands, and other mineral estates, in many sections of our state. It is important, therefore, that the rights and liabilities of contracting parties in such agreements should be definitely determined. It must be conceded that there is some difficulty in harmonizing the cases in which questions of this character have arisen. The inconsistencies, however, if such they may be called, are more apparent than real. The difficulty is not so much in the principle involved as in the application of it to the facts of a particular case. It has happened in a few instances, that the rules of law applicable only to absolute contracts to convey have been referred to in our decisions as bearing upon the rights and liabilities of parties in an option to purchase. In no instance, however, called to our attention has such a reference been material or controlling in the decision of the issue involved. There can be no such thing as mutuality of covenants on the part of the vendor to convey and deliver a deed clear of all incumbrances and of the vendee to pay, or give security for the payment of the consideration agreed upon, during the option period and before the exercise of the election to purchase. Mutual and dependant covenants must of necessity, in their very nature, relate to an absolute contract between the parties in the first instance, or to an optional agreement which has become absolute by an election to take
It must now be determined whether the optionees or their assignee exercised the option in the manner specified in the agreement, which contains the following provision : “ It is expressly understood and agreed that if the first payment aforesaid is not made on the second day of October, a. d. 1899, or within ten days thereafter, this agreement shall be considered as rescinded, and neither party shall be bound thereby.” Having held that the agreement is an option to purchase, it must necessarily follow that the election to take must be exercised in the manner therein required. The only method specified is that contained in the clause above recited, and this provided for the payment of one-fourth of the purchase money on or before a certain date or within ten days thereafter. If the
It is argued that it makes no difference whether this contract be considered an absolute agreement to sell, or only an option to purchase, because, if the latter, it was exercised within the time fixed, and therefore the covenants became mutual. This argument would be sound if the option had been exercised in the manner provided in the agreement. It was not so exercised. Notice in writing served upon the optionor of an election to purchase was not sufficient in this case, because a different method was provided by the parties. The payment of one-fourth of the purchase money on or before October 12, 1899, was the condition upon which the option could be exercised. Time was of the essence of this contract, because made so by the parties, and failure to pay within the time specified worked a forfeiture unless waived by the optionor in express terms or by necessary implication.
This brings us to the consideration of what we consider the pinch of the case. Several months after appellee had served appellant with notice of his election to take, he caused a tender of $1,500 in gold to be made appellant, and demanded a
While there are many other questions raised by the specifications of error, we do not deem it necessary to discuss them, because the decree entered by the court below must be sustained on the ground stated.
Decree affirmed at cost of appellant.