129 A.D.2d 237 | N.Y. App. Div. | 1987
In an action by plaintiffs for specific performance of a contract to purchase real property owned by defendants, the principal issue presented on appeal is whether the exercise by the optionee’s agent of an option, granted in a written and otherwise sufficient agreement signed by all principals, is ineffective unless the agent had written authority to act on behalf of the optionee. We hold that the agent’s authority to exercise the option need not be in writing.
On January 26, 1985, the defendants and Richard A. Hutch-ens & Associates (Hutchens) executed an option agreement for the sale of defendants’ real property known as "Maplecroft Farm” located in Watertown, New York. By the terms of the option, Hutchens was granted "an exclusive and first option” to be exercised by August 8, 1985. On August 7, 1985, Donald A. Wiltse, Esq., the attorney who had represented defendants during negotiation of the option agreement, received a telephone call from Lawrence R. Palvino, Esq., who identified himself as Hutchens’ attorney and stated that Hutchens was ready to proceed with the purchase of the property. By letter of August 8, 1985 to Wiltse and received by him on August 9, 1985, Palvino confirmed "our intention to proceed with the purchase contract (option)”. By letter dated August 20, 1985, Wiltse informed Palvino: "The Sellers have and do herewith reject the expression of intent as insufficient and not timely made and not in compliance with the terms of the contract.” By written assignment dated August 8, 1985, however, Hutch-ens had assigned all of its rights under "the purchase contract or option” to plaintiffs, who brought this action for specific performance.
Defendants moved for summary judgment dismissing the complaint and for a declaration on their counterclaim that there is no contractual relationship among the parties. Special Term, citing General Obligations Law § 5-703 (1) and relying upon the Second Department’s decision in Ochoa v Estate of Sarria (97 AD2d 538), granted the motion and made the declaration. The court held that the option to purchase the real property was not effectively exercised because Palvino lacked written authority to act on behalf of Hutchens. We reverse. It is of no consequence to the validity of the subject agreement that Palvino’s authority to act was not in writing.
At the outset, we acknowledge that were we to follow Ochoa
Simply stated, this case does not present the issue of whether an agent had authority to subscribe a writing on behalf of a principal. The writing is subscribed by all principals, and if the written memorandum is otherwise sufficient (see, Read v Henzel, 67 AD2d 186), and it is, and does not require that the exercise of the option be in writing, and it does not, a binding and enforceable contract was formed if the offer to sell, inherent in the option agreement (see, 11 Williston, Contracts § 1441 [3d ed 1968]) was orally accepted by the optionee in a timely manner (see, Tymon v Linoki, 16 NY2d 293; 1A Corbin, Contracts § 264 [1963]; see also, Welsh v Jakstas, 401 Ill 288, 82 NE2d 53).
Here, plaintiffs contend that Palvino was delegated as the
Accordingly, the order should be reversed, defendants’ motion for summary judgment should be denied, and the notice of pendency heretofore filed in the Jefferson County Clerk’s office on October 3, 1985 should be reinstated.
Callahan, Green, Balio and Davis, JJ., concur.
Order unanimously reversed, on the law, with costs, motion denied and notice of pendency reinstated.
Special Term properly found that because Palvino’s letter of August 8, 1985 was not received by Wiltse until August 9, 1985, it was untimely and thus ineffective to exercise the option (see, Sy Jack Realty Co. v Pergament Syosset Corp., 27 NY2d 449, 452; 1A Corbin, Contracts § 264 [1963]).