Strasser v. Steck

216 Pa. 577 | Pa. | 1907

Opinion bit

Mr. Justice Elkin,

If the agreement entered into between the parties to this action was a contract for the sale of land, the judgment must be reversed ; if'it was a contract for the sale of options, the case was properly disposed of in the court below. Prior to February 21,1901, when the contract in question was made, appellee had procured options from fifteen landowners giving him the right to elect to purchase the coal underlying their respective properties within certain limits and at certain fixed prices. In addition to the optioned coal, he owned or controlled a couple of tracts in his own right. The appellant had been engaged in buying and selling coal lands, coke plants and coal operations for a long period of years and was familiar with the prevailing method of handling such deals through options. He knew that the optioned coal did not belong to appellee and that the only interest Strasser had to sell was his right or privilege to elect to purchase under his options. This, however, was a substantial interest in land which could be conveyed to a vendee: Kerr v. Day, 14 Pa. 112; People’s Street Railway Company v. Spencer, 156 Pa. 85. Appellee had the legal right to sell his options. Did he do so? The contract itself must furnish the answer. We think the second clause clearly indicates that it was a contract to sell the options. This clause is as follows, to wit: “ In consideration whereof said second party for himself, or his assigns agrees to pay to said first party the sum of one ($1.00) dollar, the receipt whereof is hereby acknowledged, in full for this option, and in the event of this agreement being absolute by the election and notice above mentioned, then and not otherwise, said second party agrees to pay said first party the sundry sums between the prices mentioned in said options to the individual farmers and the sum of forty ($40.00) dollars per acre for each and every acre which may be taken up and to which good titles are to be bad, payable as follows: When the deeds are delivered from the present owners, the payments to the farmers to be as stipulated in the options and the same may be determined by surveys.” Here, then, in express terms it is provided that when the agreement becomes absolute by election and notice, which were subsequently made and given, appellant agreed to pay appellee, not $40.00 an acre the full price agreed upon for the coal, but the difference between the optioned price and $40.00 p'er acre. In other word's, this difference represented the profit and compensation of the appellee in taking up the options. Again, it is provided, that when the deeds are delivered, not by appellee to appellant, but from the “ present owners,” the “ farmers ” are to be paid “ as stipulated in the options.” Paid by whom? Clearly by Steck, the purchaser of the options. His covenant was to pay, first, Strasser, the difference between the prices fixed in the options and $40.00 per acre, and, second, the farmers according to the terms of the options. All of which is inconsistent with the contention that the optional agreement was a contract whereby appellee agreed to sell and convey to appellant the coal lands under option.

If Steck was contracting to purchase the optioned coal land from Strasser why did he insert in the agreement the covenant about the delivery of the deeds from, and the payment of the purchase money to, the “farmers” ? It is true appellee did, in the first clause of the agreement, covenant to grant, bargain and sell the coal land owned and optioned by him, and these words are ordinarily used in the conveyance of absolute title, but they may be used in the conveyance of any estate, or interest, which may be transmitted to a vendee, and it follows, that appellee had such an interest under his options as could be granted, bargained and sold. In the present case the legal effect of the whole contract was to grant, bargain and sell options. In the options with the landowners, it was provided that the conveyance should be by “ good and sufficient deed,” while in the optional agreement between appellant and appellee the covenant was to convey by deed of general warranty free of all incumbrances. It is strongly urged that Steck by this covenant contracted for the warranty of Strasser and not for that of the landowners. If this covenant stood alone, without explanation or qualification by other parts of the contract, there could be no doubt as to the correctness of this position. It, however, must be read and understood in connection with the whole contract and the subject-matter about which the parties were contracting. When so construed there can be no doubt that the intention of the parties as gathered from the four corners thereof was that if any landowner failed to convey to appellant by deed of general warranty free of all incumbrances, or other satisfactory conveyance, appellee would not be entitled to receive the difference between the optioned price and $40.00-per acre as his compensation for that option. If the title was not good according to the covenants of appellee, the appellant might refuse to elect to take, and in that event, appellee would not be entitled to receive the consideration or compensation provided for him in the optional agreement. Throughout the whole transaction appellant knew that appellee did not own the coal lands, and only had the options to purchase them, and this is what he bargained for. When appellant on March 15, 1901, notified appellee in ■writing of his election to take and accept the coal franchises and privileges, which had been granted by the landowners under the options, the optional agreement was exercised and the rights and liabilities of the parties thereto were fixed thereby. He then became the equitable owner of the options, and could enforce his rights therein, not only against appellee, but also against the landowners: Frick’s Appeal, 101 Pa. 485. If he failed to exercise his right to purchase after he became the owner of the options, the fault was his, not that of appellee. This being our construction of the contract, we can see no error in the submission of the case to the jury by the learned trial judge in the court below as to the measure of damages and all other questions involved in the controversy.

Judgment affirmed.