Cortese v. Connors

Bergan, J.

Plaintiffs Cortese were tenants in real property in Binghamton owned by defendant Connors. The lease gave them an option to buy. It provided that if the landlord wished to sell, the tenants should have the “ first option to purchase ” the property “ under the terms at which it was offered for sale ”. It has been found on a sufficient record that defendant informed James Córtese that the property was listed for sale at $35,000; and indicated that it might be bought for $25,000. This was communicated through an agent. Mr. Cortese stated that he would not pay more than $20,000. Defendant Connors later entered into an agreement with plaintiff Eisenstein to sell the property for $21,750. Both the plaintiffs Cortese and the plaintiff Eisenstein, respectively, seek a judgment of specific performance. After a trial the court granted judgment dismissing the complaint of the plaintiffs Cortese and granting judgment to plaintiff Eisenstein. We think the case was correctly decided.

An owner of property who has bound himself to give an option to a tenant to purchase “ under the terms at which it is offered for sale ” has an obligation to the tenant to allow due exercise of the option. But the tenant has an obligation, too; and the statements made by him in the interest of bargain and sale to bring the price down may be of such a character that a reasonable man would take them as indicating that the tenant elected not to exercise the option.

Neither party is quite as free in dealing with rights fixed by an option as they might be under open conditions of barter. If the tenants stated that $25,000 was too much and the landlord sold the property for a lesser amount she would no doubt be bound to keep the tenants advised of the lesser amount at which it was later offered for sale.

But if a tenant denominates a buying price of his own and states that he will not pay over that price, the landlord may be justified in believing him and selling it at a price above the *37tenant’s ceiling. This is not because of estoppel; it is because the landlord has performed his contract and the tenant has elected not to accept its benefits. Such an election need not necessarily be expressed in a formal document; it may be stated orally.

The judgment should be affirmed, with costs to the respective respondents.