Donald V. SNYDER, Appellee, v. Bert A. BOWEN, Martha Bowen, Donald V. Snyder and Bert Bowen, Partners.
Superior Court of Pennsylvania
Filed Nov. 25, 1986.
518 A.2d 558
Appeal of Bert A. BOWEN. Argued June 26, 1986.
JOHNSON, J., joins.
Lester Zimmerman, Jr., Lewistown, for appellee.
Before WIEAND, BECK and WATKINS, JJ.
BECK, Judge:
The issue is whether an option clause for the purchase of land contained in a partnership agreement is valid. We find the option is valid and therefore affirm the grant of specific performance by the trial court.
The source of the present litigation is a partnership agreement which Appellant Bert A. Bowen and Appellee Donald V. Snyder entered into in 1969. In essence, each man paid $6,000 to acquire a one-half interest in the part
One of the parties hereto, DONALD V. SNYDER, his heirs, executors, administrators or trustees shall have the right, privilege and option to purchase any amount of land up to but not exceeding two hundred (200) acres of the real estate as is more fully described in Schedule A. hereto annexed and made a part hereof, for a sum not to exceed one-half of the original purchase price per acre. Said right, privilege and option may be exercised at any time prior to the division of the assets of partnership upon termination or dissolution thereof. Fifteen (15) days prior written notice of the exercise of said right, privilege and option shall be given to the other partner hereto.
When Snyder proposed this provision, Bowen objected on the ground that the rights of both parties should be equal in all respects. Bowen signed the agreement only after Snyder‘s lawyer added the following language:
Should the said DONALD V. SNYDER exercise the said right privilege and option then BERT A. BOWEN, his heirs, executors, administrator‘s or trustees shall have the right, privilege and option to purchase like amount of said land situate on same side of the mountain for a sum not to exceed one-half of the original purchase price per acre.
The option provisions contained no date on which the option expired.
In the years that followed, the partnership land dramatically appreciated in value. Moreover, Snyder and Bowen derived some income from leasing space for communications towers, and leasing oil and gas rights. Each man had equal responsibility for managing the partnership, and profits were distributed equally between both parties.
On October 18, 1982, Snyder gave formal notice to Bowen that he was exercising his option. Snyder claimed the two
Prior to the dissolution of the partnership, Snyder brought an action against Bowen and the partnership for specific performance, which the court granted.1 In considering the court‘s order, we bear in mind that specific performance is a unique remedy which is usually unavailable where an award of damages for breach of contract would be appropriate. Cimina v. Bronich, 349 Pa.Super. 399, 503 A.2d 427 (1985). Clark v. Pennsylvania State Police, 496 Pa. 310, 313, 436 A.2d 1383, 1385 (1981) holds that “(s)pecific performance should only be granted where the facts clearly establish the plaintiff‘s right thereto, where no adequate remedy at law exists, and where justice requires it.” Since Snyder seeks to enforce a contract to transfer land, we can assume that he has no adequate remedy at law. See 81 C.J.S. Specific Performance § 76 (1977). The other two elements of the Clark standard require closer analysis of the facts in the case sub judice.
I.
Snyder‘s right to specific performance is clearly supported by the partnership agreement. As the court below found, the meaning of the agreement is clear and the agreement entitled Snyder to purchase 200 acres.
Nevertheless, this case is complicated by the fact that Snyder waited from 1969 to 1982 before giving notice
Under the facts of this case, we find that the 13 years that elapsed, from 1969 to 1982, before Snyder exercised his option was not an unreasonably long time period. We reach this conclusion based on the Snyder-Bowen partnership agreement. This agreement placed Bowen in a position different from that of the typical landowner who grants another an option to buy his property.
An option is a substantial interest in land from the time it is first created to the time it is exercised. Phoenixville V.F. & S.E. Ry Co.‘s Appeal, 70 Pa.Super. 391, 396 (1918). An optioner significantly limits his control of his real estate in granting an option to an optionee. It may well be impossible for the optioner to find anyone willing to buy his land burdened with an enforceable option agreement. Even an effort to lease or improve the land may result in a legal challenge by the optionee. See 1 Samuel A. Goldberg,
In the instant case the partnership agreement itself, and not the option, restricted the partners control over the land. Neither party‘s right to control the property was circumscribed by the existence of the option itself. The partnership agreement provided that both parties have an equal voice in the management of partnership property. Therefore, in the absence of the option provision, neither party could take any action affecting the land without the other‘s approval. In contrast, in an option agreement between a buyer and seller or a lessor and lessee, the option agreement itself limits the optionor‘s control over the land. Thus, it is reasonable to allow Snyder‘s option to continue in force for a longer period because it was not the primary instrument by which use of the land could be controlled.
It is also significant that the partnership agreement provided that the exercise of Snyder‘s option would give rise to a parallel option in favor of Bowen. In a single option contract, it is apparent from the outset that the longer the option lasts, the more the contract favors the optionee. Consequently, it is often reasonable to assume that the optionor intended to limit the life of the option to a shorter period of time than in the context of a partnership where the parties have provided for mutual options.
In the instant case the longer the period during which Snyder‘s option was valid, the longer the period during which Bowen‘s option remained valid. The court will not rewrite the partnership agreement because Snyder‘s option proved to be considerable more valuable than Bowen‘s option. Bowen initially believed that he had struck an effective bargain. See Steuart v. McChesney, 498 Pa. 45, 444 A.2d 659 (1982).
II.
In appellant‘s brief, he contends that specific performance is inequitable for three reasons. First, Snyder‘s 200 acres greatly appreciated in value between 1969 and 1982. Second, during those years, Bowen devoted time and money toward developing property for sale through the partnership. Third, Bowen was allegedly misled by Snyder‘s attorney at the time he consented to Snyder‘s option. These arguments do not persuade us that the trial court abused its discretion.
A court of equity should refrain from ordering specific performance where “it appears that hardship or injustice will result to either of the parties.” Welsh v. Ford, 282 Pa. 96, 99, 127 A. 431, 432 (1925). The word “hardship,” however, does not encompass every disappointment and economic detriment to which a party has exposed himself by signing an agreement. See Steuart, supra. “Equity cannot contract for the parties. It is only where circumstances come to light which so shock the concept of fairness and justice that it would be unconscionable to enforce the bargain that Equity intervenes.” DiPompeo v. Preston, 385 Pa. 512, 518, 123 A.2d 671, 674 (1956). The concerns of appellant do not rise to this level.
It is true that Snyder‘s exercise of his option reduced the value of Bowen‘s interest in the partnership. Snyder, however, will not be denied specific performance because he struck a better bargain under the agreement than his partner Bowen.4 In Steuart, supra, the Court found that
It is also true that Bowen helped manage the partnership land holdings in the years before Snyder‘s option was exercised. Managing property in such a way as to increase its value is perhaps analagous to building physical improvements on the property that increase its value—a factor that courts take into account in deciding if specific performance is equitable. See Barr v. Deiter, supra. Yet, here, the balance of equities shifts in favor of Snyder rather than Bowen. It appears that Bowen has already been amply compensated for his contributions to the partnership. Bowen initially invested $6000—less than $4.50 per acre of partnership land. During the life of the partnership, he received income from communication tower leases, and oil and gas leases. Upon dissolution of the partnership, he was entitled to half of the sale price of 1000 acres of land worth an estimated $150 per acre. He also had an option to purchase an additional 200 acres of land at the same price Snyder paid for his 200 acres. As the chancellor remarked, “both parties stand to reap substantial financial gains from this venture.” Trial Court Op. at 3. Consequently, we cannot say that specific performance would work a genuine hardship.
Appellant‘s remaining argument also lacks merit. Although Bowen alleges improper conduct on the part of Snyder‘s attorney, the court found no impropriety in counsel‘s action. The court also found that Bowen was fully aware of the meaning of the partnership agreement when he signed it. These findings are supported by the record and are therefore binding on this court Rupniewski v. Miazga, 299 Pa. 190, 149 A. 193 (1930); Steuart, 498 Pa. at 55, 444 A.2d at 664.
Order affirmed.
WIEAND, Judge, concurring:
I concur in the result. In my judgment, however, the terms of the agreement define expressly and specifically the time within which the option can be exercised. The agreement provides: “Said right, privilege and option may be exercised at any time prior to the division of the assets of partnership upon termination or dissolution thereof.” In view of this language of the agreement, I would find it unnecessary to determine whether thirteen years was a reasonable or unreasonable time within which to exercise the option. It is enough that the option was exercised within the time contemplated by the parties’ agreement. I agree also with the majority that the increase in value during the thirteen year period in which the parties were partners and worked together to enhance the value of their land does not alone render the option unenforceable.