166 Ark. 381 | Ark. | 1924
(after stating the facts). The parties to this suit concede that the written instrument copied in our statement of facts, which is the basis of this lawsuit, is an option contract, within the rule laid down in Indiana & Arkansas Lbr. & Mfg. Co. v. Pharr, 82 Ark. 573, and we shall so treat it.
The consideration recited in the option contract was one dollar, and the defendants did not complete the contract by the payment of the $6,000 recited in it before the plaintiffs withdrew their offer.' There is some conflict in the authorities as to whether or not there must be a valuable consideration for the option to render it more than an offer revocable before acceptance, but this court has recognized the rule to be that a recited consideration of one dollar is merely nominal, and that the offer may be revoked at any time before it is accepted. Jones v. Lewis, 89 Ark. 368.
In the earlier case of Greenfield v. Carlton, 30 Ark. 548, the court recognized that, in a complaint to enforce the specific performance of a contract for the sale of land, among other things, it was necessary to allege the execution of a binding agreement for a sufficient consideration.
Again, in Ashcraft v. Tucker, 136 Ark. 447, the court said that it is well settled in this State that an option contract, based upon a valuable consideration, does not lack mutuality, and that equity will compel the specific performance of such a contract when it has been accepted by the party seeking to enforce it.
The distinction between an option for the sale of land for a nominal consideration and one for a valuable consideration is that the former is merely an offer to sell and may be withdrawn at any time before acceptance, upon notice to the vendee; but in the latter, where a valuable consideration is paid for the option, it cannot be withdrawn by the vendee, before the expiration of the time specified in the option. Ide v. Leiser (Mont.), 24 Am. St. Rep. 19, and Cummins v. Berners (Va.), 106 Am. St. Reps. 881.
The reason for the distinction in the two classes of cases is clearly stated by Judge Lurton in Bradford v. Foster, 87 Tenn. 4, as follows: “Before acceptance such an agreement can be regarded only as an offer in writing to sell upon specified terms the lands referred to. Such an offer, if based upon no consideration, could be withdrawn by the seller at any time before acceptance. It is the acceptance, while outstanding, which gives an option not given upon a consideration vitality. If, however, an offer to sell is made in writing, and, for a valuable consideration, time is given within which it shall stand open for acceptance, such an option is irrevocable. It is based upon a consideration, and has all the elements of a contract. Such a contract is a conditional agreement. Upon the vendee accepting the offer, a contract of sale between the parties is complete.”
The contract in the case at bar was a mere option given by Charles Richardson and wife to C. B. Hogan and W. H. Strong to purchase an undivided one-half interest in all of the oil, gas and other minerals in 240 acres of land, and there was no consideration to support the contract until Hogan and Strong should accept the offer of Richardson unless one dollar should be considered a valuable one. It would be therefore in the power of Richardson to withdraw his offer before it was accepted if the consideration was nominal, and he in effect did withdraw it by bringing the present suit.
It was conceded that an option to purchase land without consideration may be withdrawn at any time before acceptance, and that an option founded upon a valuable or adequate consideration cannot be withdrawn before the time specified therein has expired. This is the settled rule in this State, as will be readily seen by reading our cases cited above.
It is insisted by counsel for appellant, however, that the sum of one dollar named in the option contract is a valuable, or at least an adequate, consideration. The authorities on this point are in direct conflict, and we do not deem it necessary to cite or review them in this opinion. We consider that the better reasoning and the right of the matter is that one dollar is not an adequate consideration for such an option. It is merely a nominal consideration, and should be disregarded by a court of equity. It cannot be said that the consideration for the option extends to and includes the purchase price named therein. The persons to whom the option was given were not to take possession of the property, nor were they to make any improvements thereon. The sole consideration for the option was the sum of one dollar.
In this respect the case. is different from that of Lawrence v. MaHioney, 145 Ark. 310. There the court had under consideration an oil and gas lease which recited a consideration of one dollar, and an agreement by the lessee to drill an oil and gas well within a stipulated time. The obligation on the part of the lessee to drill the oil and gas well within a given time, or to pay an additional rental, constituted a substantial consideration to support the lease contract. The object on the part of the lessor was to have his property developed as oil and gas property, and the lessee agreed to develop it by drilling an oil and gas well on it.
It is not so in the case at bar. The option stated the terms and conditions on which the owner was willing to sell an interest in his land; but it was a mere proposal to sell the land until its terms were accepted. The holder of the option was not bound to do anything except to pay one dollar. This consideration was purely nominal and was infinitesimal in amount when compared with the value of the right granted.
It results from the views we have expressed that the court was right in dismissing the cross-complaint for want of equity and in granting the prayer of the complaint.
Therefore the decree will be affirmed.
