Kessler v. Pruitt

ON PETITION POE REHEARING.

SULLIVAN, J.

A petition for a rehearing has been filed in this case, and it is contended that the court misconstrued the contract when it held as follows, to wit: “That the contract on which the action was based bound the appellant to purchase the property which is the subject of the action.’^ The contention of counsel for the petitioner is that the contract was only an option and could not be enforced against the purchaser. We have carefully considered said contract, and the majority of the court finds no provision in said contract whereby appellant agrees to purchase said real estate. By one provision of said contract, the respondents agree to sell and convey to appellant, according to the terms and conditions of said contract, the real estate described therein. Another provision is that if the appellant fails to pay the balance of the purchase price on or prior to March 1, 1906, the said bank shall deliver the deed to the respondents; and there is a further provision in the contract whereby the respondents agree to furnish to the appellant an abstract of the title to said premises, showing a good and legal title to the same. It is stipulated in said contract to the effect that the result of the failure of the appellant to pay the balance of the purchase price shall be the return to them of the deed placed in escrow. It contains no agreement on the part of the appellant to purchase said premises.

This contract, then, is only an option to purchase. It was a right acquired by appellant under said contract to purchase said real estate within a certain time upon the payment of the balance of the purchase price upon respondent’s furnishing a proper abstract of title. The appellant had the option to purchase but did not make the purchase at the time said agreement was entered into. An option is not a sale. An option to purchase does not become a contract to purchase until the privilege given by the option has been exercised *191by an acceptance. (Hopwood v. McCauseland, 120 Iowa, 218, 94 N. W. 469; 21 Am. & Eng. Ency. of Law, 2d ed., 924.)

The majority of the court now holds that the court erred in its former opinion in holding that said contract bound the appellant to purchase said real estate, and holds that said contract was a contract to sell and an option given to the would-be purchaser, and' could not have been enforced against him. The court is, however, unanimously agreed upon the question that whether said contract be considered an option or a contract to purchase that could be enforced against thé appellant, the same conclusion must be reached in either case, and that is, that the judgment must be reversed. The appellant had done and performed everything required to be done and performed by him, and the seller had failed to furnish an abstract of the title to said real estate as soon as he expected to do so, or as contemplated by said contract, and for that reason he was in default, while the other party was not in default. The seller could not evade the liability imposed by his contract by failing to comply with its terms on his part. A rehearing is therefore denied.

Ailshie, C. J., concurs.