{ "id": 11270840, "name": "RICHMOND PEARSON and wife v. C. C. MILLARD", "name_abbreviation": "Pearson v. Millard", "decision_date": "1909-03-17", "docket_number": "", "first_page": "303", "last_page": "311", "citations": [ { "type": "official", "cite": "150 N.C. 303" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "30 S. W., 853", "category": "reporters:state_regional", "reporter": "S.W.", "opinion_index": 0 }, { "cite": "162 U. S., 404", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6138831 ], "opinion_index": 0, "case_paths": [ "/us/162/0404-01" ] }, { "cite": "127 U. S., 379", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 3531672 ], "opinion_index": 0, "case_paths": [ "/us/127/0379-01" ] }, { "cite": "3 L. R. A., 94", "category": "reporters:federal", "reporter": "L.R.A.", "opinion_index": 0 }, { "cite": "31 W. Va., 736", "category": "reporters:state", "reporter": "W. Va.", "case_ids": [ 8640519 ], "opinion_index": 0, "case_paths": [ "/w-va/31/0736-01" ] }, { "cite": "8 Wall., 557", "category": "reporters:scotus_early", "reporter": "Wall.,", "case_ids": [ 3445307 ], "weight": 3, "opinion_index": 0, "case_paths": [ "/us/75/0557-01" ] }, { "cite": "23 L. R. A., 555", "category": "reporters:federal", "reporter": "L.R.A.", "opinion_index": 0 }, { "cite": "149 Ill., 403", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 5471577 ], "opinion_index": 0, "case_paths": [ "/ill/149/0403-01" ] }, { "cite": "144 N. C., 192", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8659355 ], "weight": 3, "opinion_index": 0, "case_paths": [ "/nc/144/0192-01" ] } ], "analysis": { "cardinality": 827, "char_count": 21204, "ocr_confidence": 0.458, "pagerank": { "raw": 1.339469530242983e-07, "percentile": 0.6308232642134735 }, "sha256": "73b21c9e0a9edbbf8d1b8aa9c492a2e240f87b527b8b550d0ca16a85167e5b28", "simhash": "1:802d616432675100", "word_count": 3643 }, "last_updated": "2023-07-14T18:55:20.077008+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "RICHMOND PEARSON and wife v. C. C. MILLARD." ], "opinions": [ { "text": "Connor, J.,\nafter Stating the case: Plaintiffs except and assign as error bis Honor\u2019s refusal to submit the issue, \u201cDid defendant offer to comply witb all of the conditions of the written contract mentioned in the pleadings, as alleged in the answer ?\u201d His Honor submitted separate issues directed to the several conditions in the lease, and tbis, we think, was proper. Every controverted question of the fact was settled by the verdict upon the issues submitted. Tbe exception cannot be sustained.\nPlaintiffs assign as error the admission of the-assignment by Lasater to defendant.\" It was certainly relevant and competent. Its admission did not affect its effect upon the rights of the parties, but was necessary to enable the court to pass upon tbat question. We are unable to perceive bow it could prejudice the plaintiffs.\nTbe next -assignment of error is in tbe admission of Mr. Pearson\u2019s letter of 23 February, 1906, to Mr. Whitson. This letter was written from Teheran, Persia, in response to the letter notifying plaintiffs tbat defendant bad accepted tbe option and was ready to make tbe purchase \u201cunder its terms.\u201d Mrs. Pearson insists tbat Mr. Pearson was not her agent, and that she was not bound by bis letter. Conceding tbis to be true, we do not see bow the letter affected her rights. Mr. Pearson simply placed his construction upon the option, which, if correct, deprived defendant of any right under it. He insists that the option entitled the\u2019lessees to purchase, provided no one else would give more, and said that he had been offered a larger price. There is no suggestion that the acceptance was not in accordance with its terms, but that, under the terms, defendant had no right to call for a deed. Certainly there is nothing in the letter prejudicial to Mrs. Pearson. There was some evidence that Mr. Pearson was her agent. In any point of view, there is no prejudicial error in his Honor\u2019s ruling. The jury having found that none of the conditions in the lease \u2014 payment of rent and for repairs \u2014 had been broken, and having further found that Mr. Whitson was the authorized agent of the plaintiff, with power to accept or reject the offer made by defendant, and that he was notified of the acceptance by defendant, and the cash payment of $1,000 ivas tendered within the time fixed in the lease, we are brought to a consideration of the pivotal questions argued by counsel.\nThe option was simply an offer by plaintiffs to .permit the lessees to purchase upon the terms stated, \u201con or before the third day of July, 1907.\u201d Until accepted by the lessees, it was a unilateral contract, binding only the lessors. We had occasion to consider the subject in Trogden v. Williams, 144 N. C., 192, and examined the authorities bearing upon the relative rights and duties of the parties to a contract of this character. The option was in this case based upon a sufficient consideration, \u201cWhen an option is given the lessee to purchase the leased premises, the lease is a sufficient consideration to support the option, and the lessor cannot withdraw -it before' the time in which' to accept it has expired.\u201d Tilton v. Coal Co., 77 Pac. (Utah), 758. \u201cThe doctrine of the earlier English and American cases, in which it is held that the want of mutuality of obligations and remedy would render the contract incapable of specific enforcement, has, by the more modern cases, been so modified that optional agreements to convey, without any corresponding obligation or covenant to purchase, will now be specifically enforced in equity, if made upon sufficient and valuable consideration; and so, when the agreement to convey is a part of a lease, or other contract between the parties, for which the agreement to convey forms the true consideration, the want of mutuality will not avoid the contract.\u201d Hayes v. O'Brien, 149 Ill., 403; 23 L. R. A., 555. \u201cSuch .a contract is a continuing obligation on the part of the lessor, running with the lease, which the lessee may accept at his option, within the time limited.\u201d Ib. Until accepted, it is an offer of the lessor; but, as said by Mr. Justice Field (Willard v. Tayloe, 8 Wall., 557), by notice of the acceptance \u201ca contract of sale is completed.\u201d The contract becomes bilateral, binding both parties. Trogden v. Williams, supra. It is, of course, 'elementary, and sustained by a uniform current of authorities that, as in any other proposition to sell, the acceptance must be in accordance with the terms of the option, that is, unconditional.' Weaver v. Burr, 31 W. Va., 736; 3 L. R. A., 94; Smelting Co. v. Belden Co., 127 U. S., 379; Kelsey v. Crowther, 162 U. S., 404; Trogden v. Williams, supra.\nWas the acceptance by defendant unconditional and in accordance with the terms of the contract? Mr. Whitson said that defendant\u2019s exact words were: \u201cThat he wanted to avail himself of the right to purchase under his contract with. Mr. Pearson, and that he was ready to pay me the $1,000 on the purchase price.\u201d Defendant says that he notified Whitson that \u201che was going to pay-under the option, and wanted Whitson to write for the deed.\u201d The jury finds that the defendant notified Whit-son that \u201cit was his purpose to purchase the projterty under the terms of the contract,\u201d and Mr. Whitson says that he wrote plaintiff, or, rather, Mr. Pearson, of the acceptance; he further says he supposes that Mrs. Pearson was in Persia, with her husband, who was resident Minister at Teheran. There is no suggestion in the testimony that any condition was attached to the acceptance. Excluding Mr. Pearson\u2019s letter as not binding on Mrs. Pearson,' she makes no response whatever to the notice. If we consider the letter as the response of her agent, no suggestion is made that the accej)tance is not in accordance with the terms of the option; but an entirely different reason is assigned for refusing to make the deed, that he has been offered a larger price and is under no obligation, by the terms of the option, to convey. Eejecting this construction, what duty devolved upon the plaintiffs upon receipt of the notice of accept-anee of tbe option? Clearly, to accept tbe $1,000 casb and prepare a deed to Millard & Lasater, and tender it; whereupon it was tbeir duty to prepare and tender notes and a trust deed' for tbe balance of tbe purchase money. At tbe time of tbe notice of acceptance by defendant nothing was said about any assignment by Lasater. As is said by Mr. Justice Field, in Willard v. Tayloe, 8 Wall., 557 (75 U. S.), \u201cUntil tbe purchase money was accepted, there was no occasion to prepare any instrujn&nt for execution. So long as that was refused, tbe preparation of a trust deed was a work of supererogation. Besides, tbe execution of tbe trust deed by tbe complainant was to be simultaneous with, tbe execution of tbe conveyance by tbe defendant. Tbe two were to be concurrent acts; and if tbe complainant was to prepare one of them, tbe defendant was to prepare tbe other, and it is not pretended that tbe defendant acted in tbe matter at all.\u201d In that case tbe bill was filed by tbe purchaser. Here tbe purchaser, defendant, is asserting bis right by way of equitable counterclaim. Tbe plaintiffs, either by silence or Mr. Pearson\u2019s letter, refused to comply with tbeir duty under tbe contract, and, of course, defendant could take no further step in the transaction. If plaintiffs bad prepared and tendered, a deed to Millard & Lasater and demanded tbeir notes and trust deed pursuant to tbe terms of tbe contract, it may well be that Lasater would have joined Millard in tbeir execution, or Millard may have \u2022paid tbe entire purchase price in cash. It would be neither just nor equitable to permit plaintiffs to repudiate tbeir obligations, absolutely, at tbe inception of tbe transaction, and thereby prevent tbe defendant from complying further with bis offer to accept tbe terms of tbe contract and thereby destroy bis rights. There is nothing in tbe evidence to justify plaintiffs\u2019 refusal to accept\" tbe casb and tender tbe deed, \u201cunder the terms of tbe contract,\u201d as made by them. But tbe learned counsel insists that tbe acceptance by defendant was for himself alone, and not for Millard & Lasater, and that( thus construed, plaintiffs were under no obligation to convey to him and accept bis notes and trust deed; that they contracted with both partners and were entitled to demand strict performance of tbe contract. It is undoubtedly true, as contended by plaintiffs, that when a person enters into a contract with another, involving personal services or personal confidence, tbe contract cannot be assigned, so as to bring one of tbe parties into contract relations witb a stranger. \u201cContracts involving tbe relation of personal confidence, and such that tbe party whose agreement conferred those rights must have intended them to be exercised only by him in whom be actually confided, are not transferable.\u201d 4 Oyc., 22. It seems to be well settled that \u201cwhen a lease contains an agreement that tbe lessee may purchase tbe land during tbe continuance of tbe lease, tbe assignment of tbe lease conveys to and vests in tbe assignee tbe same right.\u201d Menger v. Ward, 30 S. W. (Tex.), 853. It would seem, therefore, that by Lasater\u2019s assignment tbe defendant was entitled to tbe. benefit of his interest in tbe option \u2014 that is, by complying with its terms, to call for tbe conveyance.\nThe only element of personal confidence involved in tbe option was that both Millard and Lasater were to execute their notes for tbe balance of tbe purchase money. As we have seen, tbe acceptance by defendant was \u201cunder tbe terms of the' option.\u201d There was no suggestion that Lasater was not to sign the notes. In Menger v. Ward, 30 S. W., 853, relied upon by plaintiffs, tbe.option, superadded to tbe lease, gave tbe right to the lessee to purchase tbe property by paying a part of tbe purchase price cash and giving bis notes for balance. Tbe lessee mortgaged bis term. One of tbe questions involved in tbe litigation was whether tbe mortgage of tbe leasehold property carried tbe option. Tbe court held that, as credit was given for a part of tbe purchase price, tbe option'did not pass by tbe mortgage. This decision was based upon tbe principle that tbe lessor could not* be compelled to accept a stranger as bis debtor, and was unquestionably corr'eet. In the case before us no new party is attempted to-be brought into tbe contract, but one of them \u201cdrops out\u201d by assigning bis interest to bis copartner. Tbe assignment of bis interest, of course, made no change in tbe right of tbe plaintiffs to have tbe contract accepted and executed according to its terms, but they made no such claim or demand. There is no evidence showing or tending to show that Lasater would not, as in good faith be should have done to make bis assignment effectual, have joined in tbe notes and trust deed. Tbe acceptance having been made in good faith, according to tbe terms of tbe contract, we can see no reason why defendant was not' entitled to bave bad an opportunity to either give tbe notes to Lasater or, as bis Honor bas directed, pay tbe full amount of tbe pur-cbase money down. A court of equity looks to tbe substance of tbe tbing; and while it will not vary tbe terms of tbe contract or deprive tbe plaintiffs of any of their legal rights, after tbe option by acceptance bas been merged into a contract, it will guard the rights of both parties and makd them do equity. Tbe only element of personal confidence involved in tbe contract was that tbe lessors were to bave four years\u2019 credit. If this is waived and tbe amount is paid in cash, bow can tbe plaintiffs complain? If they desired tbe notes, they should bave put themselves in an attitude to call for them by tendering tbe deed; this they refused to do. \u201cA party does not forfeit bis right to tbe interposition of a court of equity to enforce-specific performance of a contract if be, reasonably and in good faith, offers to comply and continues ready to comply with its stipulations on bis part, although be may err in estimating tbe extent of bis obligation.\u201d Willard v. Tayloe, supra. While, as consistently held by this and all other courts administering equitable rights and remedies, specific performance is not a matter of absolute right, yet it will be granted when it is apparent, from a view of all tbe circumstances of tbe particular case, that it will subserve tbe ends of justice and work no hardship upon tbe party who bas 'entered into tbe contract.\nUpon a review of tbe.entire evidence and tbe verdict of tbe jury, we think that defendant bas acted in entire good f\u00e1ith and is entitled to tbe relief granted by bis Honor. Plaintiffs are not required to enter into any contract with a stranger or to release any security to which they were entitled under tbe contract. They agreed to sell tbe property for $9,000 if accepted on or before 2 July, 1901. Only $1,000 was to be paid cash, and credit of four years was given for tbe balance. Tbe option was accepted more than a year before tbe time fixed, and they, without assigning any valid reason, rejected it. They receive, under tbe provisions of tbe judgment, tbe whole amount of the purchase money, with interest from, tbe day of tbe tender.\nHpon a careful examination of tbe entire record, with tbe aid of excellent briefs and oral argument, we find no reversible error.\nNo Error.", "type": "majority", "author": "Connor, J.," } ], "attorneys": [ "J. C. Martin and W. R. Whitson, for plaintiffs.", "Merrick & Barnard for defendant." ], "corrections": "", "head_matter": "RICHMOND PEARSON and wife v. C. C. MILLARD.\n(Filed 17 March, 1909.)\n1. Consideration \u2014 Option\u2014Lease.\nA lease is a sufficient consideration to support specific performance of an option of purchase therein granted.\n2. Same \u2014 Unilateral Contract \u2014 Acceptance.-\nAn option of purchase contained in a lease is a unilateral contract, binding the lessors oiily when it is unconditionally accepted according to its terms.\n3. Same \u2014 .Notice Sufficient \u2014 Compliance.\nWhen a lessee of lands with an option of purchase notifies the agent of the lessor of his acceptance of the option of purchase, in accordance with its terms, the notice is sufficient.\n4. Same \u2014 Evidence\u2014Principal and Agent \u2014 Harmless Error.\nWhen it is shown that a lessee, holding a lease with an option of purchase, has notified the agent of the lessor, the latter residing abroad with her husband, of his acceptance of the option according to its terms, who communicated the fact to the husband, and she made no reply, it is harmless error to admit in evidence, under her objection, a letter from the husband stating that the terms of the option had not been complied with upon a different ground than that contended for in the action, whether the husband was or was not the agent of the wife.\n5. Deeds and Conveyances \u2014 Contracts \u2014 Specific Performance \u2014 Option\u2014 Notice of Acceptance \u2014 Deferred Payments \u2014 Tender of Deed \u2014 Mutual Obligations.\nWhen a lessee of lands, with an option of purchase, upon making a cash payment and securing with mortgage certain notes given for balance of purchase price, accepts unconditionally the option according to its terms, and tenders the cash payment, it is the duty of the lessor to prepare and tender the deed, and upon his failure to do so the lessee is not required to tender the- notes secured by the mortgage in order to enforce specific performance of the contract.\n6. Contracts \u2014 Specific Performance, When Enforced.\nWhile specific performance of a contract is not a matter of absolute right, yet it will be granted when it is apparent, from a view of all the circumstances of the particular case, that it will sub-serve the ends of justice and work no hardship upon the parties to the contract.\n7. Deeds and Conveyances \u2014 Contracts \u2014 Option \u2014 Acceptance \u2014 Specific Performance.\nAn assignment by one partner to another of an option of purchase of the lands described in their lease is valid and enforcible by the assignee thereof upon an unconditional acceptance of and \u2022compliance with the terms of the option.\n8. Deeds and Conveyances \u2014 Options\u2014Assignee of Option \u2014 Personal Transactions \u2014 Deferred Payments \u2014 Waiver\u2014Equity.\nSpecific performance of an accepted option to convey lands in accordance with its terms cannot be avoided on the ground that it was made to a partnership, the\u2019option assigned to one of them, and that trie transaction providing for deferred payments was personal to both partners, when the assignee of the option waived any right to deferred payments, and is ready, able and willing to \u25a0pay cash in full; and a decree providing for the payment in full and the execution of the conveyance will not be disturbed on appeal.\nActioN tried before Peebles, J., and a jury, at May Term, 1908, of Buncombe.\nPlaintiff, Mts. Pearson, being the owner of the property in controversy, known as the Fanners Warehouse, in Asheville, N. C., together with her husband, Richmond Pearson, on 19 December, 1901, leased it to defendant Millard and H. W. Las-ater, his copartner, for the term of-five years, at a rental of $60 a month, the term to begin 3 July, 1902. The lease contained a number of provisions, none of which are necessary to be set out, except the following: \u201cIt is understood and agreed between the parties hereto that the parties \u00f3f the first part, for and in consideration of the covenants and agreements herein contained, to be performed by the parties of the second part, hereby agree and covenant to and with said parties of the'second part that they shall have an option of purchasing the property hereby conveyed on or before the third day of July, 1907, at the price of $9,000, payable $1,000 cash on consummation of trade and the balance in four annual installments of $2,000 each, the deferred payments to draw six per cent semiannual interest from the date of such consummation, as aforesaid, and to be represented by four promissory notes, of denominations aforesaid, duly secured by deed of trust, to provide that the parties of the second part shall pay all taxes and assessments for and on account of said property witbin tbe time and as prescribed by law, to keep tbe property in good condition and repair and to keep tbe same insured. * * * But it is expressly agreed and understood that tbis option to purchase, as hereinbefore stated, does not mean that tbe parties of\u2019-the second part herein shall have tbe sole and exclusive right of purchase', but that they shall have tbe refusal or preference of right of purchasing on terms herein stated, and their failure to accept the same on those terms, when offered to them, shall give the parties of the first part a perfect and complete right to make sale of sam\u00e9 to any other party on such terms as they may see fit,\u201d etc.\nThis lease was executed by all of the parties, Mrs. Pearson complying with the statutory provisions required for the execution of a deed.\nOn 2 October, 1903, Lasater, having sold and assigned all of his interest in the livery business, in which the firm were engaged, to defendant Millard, executed to him an assignment of his interest in the lease and option. This assignment was introduced over plaintiffs\u2019 objection and subject to their exception. Mr. and Mrs. Pearson resided abroad, the former being United States Minister to Persia. Mr. Whitson was Mrs. Pearson\u2019s agent for the collection of rent: On 28 May, 1906, plaintiffs instituted this action for the recovery of possession of the property, alleging that by the failure of defendant to perform certain covenants in the lease he had. forfeited his term. Defendant set up the lease and alleged that he had performed all of the covenants and exercised his option to purchase the property -by notifying plaintiffs\u2019 agent, tendering the cash payment, and that he was ready and willing to perform all of the other conditions of the option. Plaintiffs replied, and, upon issues submitted, the jury found the following facts: That defendant, during the month of December, 1905, notified Mr. Whitson of his purpose to purchase the property under the terms of the contract; that Mr. Whitson was the authorized agent of the plaintiffs, with power to accept or reject the offer; that defendant tendered the amount of $1,000 and was able to pay same; that the rent was not in arrears at that time; that defendant had not failed to comply with the condition of the lease in regard to repairs; that he was not in tbe wrongful possession of tbe property; tbat plaintiff was not entitled to recover 'any amount for rent or damages; tbat Lasater assigned bis interest in tbe option to defendant prior to 1' January, 1906; tbat defendant owed tbe plaintiffs qn- account of purchase money for tbe property $9,000, witb interest from 3 January, 1906, tbe date of tbe tender. Upon tbis verdict bis Honor rendered judgment tbat, upon tbe payment to plaintiff, Mrs. Pearson, by defendant, or by payment into the clerk\u2019s office of $9,000, witb interest from 3 January, 1906, plaintiffs execute and deliver to defendant a good and sufficient deed for tbe property; and if tbey failed to do so tbe judgment should operate as a conveyance in accordance witb tbe provisions of tbe statute. Tbe plaintiffs, having noted exceptions to bis Honor\u2019s rulings, excepted to tbe judgment and appealed.\nJ. C. Martin and W. R. Whitson, for plaintiffs.\nMerrick & Barnard for defendant." }, "file_name": "0303-01", "first_page_order": 347, "last_page_order": 355 }