191 N.Y. 377 | NY | 1908
Lead Opinion
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The trial court refused to allow the plaintiff to give evidence or make proof, because it felt bound by the decision of the Appellate Division, made upon a previous appeal, that the paper set forth in the complaint was an option and not an agreement for a lease. (
An option is an exclusive privilege to buy and a contract for an option is the agreement by which the privilege is created. Sometimes it is defined as a continuing offer, binding for the time specified the one who makes it, but not the one to whom it is made, unless he accepts when it becomes binding upon both. It neither transfers, nor agrees to transfer title to property, but confers the bare right to accept an offer within the time limited and upon the terms provided. No obligation is assumed by the holder of an option and no promise is made in the contract therefor except by the one making the offer or granting the privilege and the words used are *383 wholly his own. While there are two parties, it is unilateral in form and nature and is signed by but one, the other becoming a party by paying the consideration and accepting the instrument. If the consideration is not expressed, it may be proved at the trial.
The instrument in question was signed by both parties and was treated by both, not as an option, but as an agreement for a lease. The plaintiff alleged in his complaint that it was "a preliminary agreement for a lease" and seven times in their answer the defendants referred to it, specifically, as an "agreement for a lease." When they swore to their answer they evidently regarded it as an enforceable contract at least in form, and, admitting it to be such, pleaded certain facts in avoidance. Neither the word "option," nor any word of like meaning, appears in the paper or in the pleadings. The signatures of both parties indicate a mutual agreement binding both, not a unilateral promise binding but one. There was no reason why Smith should sign unless he intended to bind himself to execute a lease in accordance with the terms specified. As was said by the chief judge in a recent case, "The parties certainly thought they had made a contract, for they not only signed the written instrument, but took pains to have it witnessed." (Ellis v. Miller,
Upon reading the paper we find that it opens with the words "We agree," and the context immediately following shows that they are the words of the Messrs. Pincus exclusively. That part was their peculiar promise. The wording then changes, for, as we read it, both parties unite in saying "It is understood." Understood by whom? Clearly by those who signed the paper, the same as if the words were "It is understood by the undersigned." What was understood? *384
Evidently, among other things, that Mr. Smith was to pay six months' rent in advance. Did he not promise to do this when he signed the instrument. The phrase "It is understood" is not limited by the context, but means the same as "It is agreed," and thus becomes the expression of both parties, not of one only. It does not mean simply that the Messrs. Pincus understood, but both they and Mr. Smith understood. This construction has the support of authority. (Baldwin v. Humphrey,
We think that the motion to nonsuit should not have prevailed either for the reason stated by the trial court or any other, but that the plaintiff should have been allowed to introduce evidence and try the action in the usual way.
The judgment should be reversed and a new trial granted, with costs to abide the event.
Dissenting Opinion
This action was brought to recover commissions as a broker for services alleged to have been rendered in procuring a tenant for the defendants' premises. The agreement, as alleged in the complaint, is in substance that the defendants employed the plaintiff as a real estate broker to lease the defendants' premises for the term of seven years from October or November, 1906, or to find or procure a lessee thereof; that the plaintiff, as such broker, did find one Robert Smith ready, willing and able to execute and fulfill the provisions of a lease, and that thereupon the following instrument was executed by the parties in the presence of the plaintiff:
"NEW YORK, Sept. 26th, 1902.
"We agree to execute a lease of premises No. 40 West 34th Str., to R. Smith, from October or November, 1902, for 7 years, at a rental of $18,000 per year, the lease, as to conditions, to be an exact copy of the lease we now hold on the above premises (by the conditions it means taxes, insurance) *385 (if in lease) running expenses, etc., included; it is understood that at signing of lease — 6 mos. rent in advance is to be paid by R. Smith, this to draw 6% yearly in advance; L. A. Pincus is to secure R. Smith for above amount by the assignment of lease 40 West 34th St., now existing (provided this can be done), or other security. Lease to be executed and signed on or before October 10th, 1902."
Upon the trial, after the jury had been impaneled, the defendants moved for judgment upon the complaint, upon the ground that it did not state facts sufficient to constitute a cause of action, and that motion was granted.
The complaint contains no allegation that Smith ever executed a lease or that he was willing to execute a lease on the 10th day of October, 1902, the time fixed for the execution thereof. The plaintiff contends that he fully performed his part of the agreement when he procured Smith to execute the paper in question, and that then he became entitled to his commissions; while on the part of the defendants it is claimed that they contracted for a lease, or a person who would execute a lease, and not for a lawsuit; that the paper in question was a mere option unenforceable, and that the commissions were not earned by the plaintiff until a lease, such as was contemplated by the parties, had been executed.
The question thus presented for our determination is as to whether the paper in question is a binding contract between the parties, or whether it is an option merely, without consideration and not binding upon Smith. The first sentence to which our attention is called is: "We agree to execute a lease * * * to R. Smith." The words "We agree" unquestionably have reference to the defendants Louis and Alexander Pincus and do not include Smith by requiring an acceptance or the performance of any act on his part. Indeed, nothing is to be found in the entire instrument in which he is required to execute a lease to pay any rent or perform any act with reference thereto unless it is found in the following: "It is understood that at signing of lease six months rent in advance is to be paid by R. Smith." It is now contended *386
that the word "understood" is to be given the meaning of the word "agreed" and that Smith, by signing the instrument, has, therefore, bound himself not only to execute the lease but also to pay six months' rent in advance. It may readily be conceded that there are cases in which the word "understood" is used synonymously with that of "agreed" and that contracts become mutual by reason of its being so used; but ordinarily the word "understood" is not properly used in a contract as expressing the agreement of parties. It is only when it is accompanied with some expression which shows that it constituted a meeting of the minds of the parties upon the subject of the contract, indicating their intent to be bound thereby, that it is given the force and meaning of the term "agreed." (Camp v. Waring,
The judgment should be affirmed, with costs.
CULLEN, Ch. J., GRAY, WERNER and HISCOCK, JJ., concur with VANN, J.; CHASE, J., concurs with HAIGHT, J.
Judgment reversed, etc. *387
