Tennant v. Rafferty

184 N.W. 196 | S.D. | 1921

POLLEN, P. J.

Action for specific performance of a contract to convey real property. Defendants demurred to the plaintiff’s complaint, on the ground that it does not state facts sufficient to constitute a cause of action. The demurrer was sustained, and plaintiff appeals.

The contract involved is a lease of a half section of land in Potter county for a period of three years, with an option to the lessee to purchase the land during the life of the lease. The clause in the contract granting the allaged option is stated as follows :

“Party of the first part hereby agrees to give the party of the second part a chance to buy said land, * * * any time between this date and March -x, 1920, for the sum of $20 per acre, or $6,400, payable as follows: 'Cash payment, $1,400; and $5,000 on five years’ time, on or before, at 5 P. C. P. A. interest. Party of the second part agrees not to make any charges for improvements on said land described within.”

Pursuant to the terms of the agreement, plaintiff entered into possession of the land, and, relying upon his right to purchase the same, made improvements thereon to the value of $5,000. During the spring of 1919 the owner and lessor of the land died, and James Rafferty, one of the defendants, was appointed administrator of decedent’s estate. The other defendants are heirs at law of decedent. Within the time limited by the option clause in the contract plaintiff undertook to exercise his right to purchase the land. He offered the defendant the entire *237■contract price of the land, and demanded that they execute a ■canveyance of the title to him. Defendants refused to accept the tender or to execute a deed. Plaintiff then tendered defendants .$1,400 in cash, and notes for the balance in five years, with interest at 5 per cent, payable annually, and secured by a mortgage on the land. This tender and demand defendants ■ also refused, and plaintiff brought this action to compel performance.

[1] Defendants’ reason for refusing to^ carry out the terms •of the agreement is that such agreement is incomplete, indefinite, and uncertain. In support of this position defendants claim that the contract does not provide for the giving of any note or security for the deferred payment 011 the purchase price, and does mot specify whether the interest on the deferred payment is payable annually, or not until final payment is made. Neither of these grounds is well taken. While it. is customary to take notes secured by mortgages for deferred payments on sales of real estate, there is no law that requires it, and in this case there was no occasion for it. The contract does not provide fo‘r a conveyance of the title until the purchase money is all paid. So long as the grantor retains the title, there is no occasion for a mortgage.

In order to exercise his option to purchase, the grantee is required to pay $1,400 in cash. The balance of $5,000 he may pay at his option at any time “on or before” five years after the first payment, and the right to purchase implies the right to a •conveyance of the title when the purchase money is all paid.

[2] It is also contended by defendants that it cannot be determined whether the clause, “5 P. C. P. A. interest,” where used in the contract, mieans interest at 5 per cent', per annum, without specifying when payable, or interest at 5 per cent, payable ■annually. But it is not necessary to consider this question. Plaintiff had the privilege of .paying all cash, and his tender of the full amount of the purchase price eliminated the question of interest.

[3] While the contract set out in the complaint is not very artistically drawn, we believe it contains enough to constitute a binding contract to sell the land involved, and the demurrer should have.been overruled.

The order appealed from, is reversed.