Nance v. Schoonover

ELLETT, Justice

(dissenting):

I dissent.

The agreement did not require payment as a condition to exercising the option to purchase. The terms of the option required the Schoonovers to “. . . give, bestow and grant unto the said parties of the second part [Nances], and their assigns, the irrevocable option and right to purchase at any time before January 30th, 1973 at 12:00 o’clock P.M.” the realty.

The law is clearly set out in 91 C.J.S. Vendor and Purchaser § 10 as follows:

Payment or tender is not essential to acceptance unless the option instrument makes it a condition precedent to, or a part of, or necessary to, the acceptance or the exercise of the option; in such case payment must be made within a reasonable time after acceptance.

The option agreement further provided that “before said payment is required to be made and before this option shall terminate or the term expire,” the Schoonovers must deliver an abstract of title showing title in *898themselves in fee, together with a good and sufficient warranty deed conveying the title to the Nances free and clear of all liens and encumbrances. It then provided, “Time is of the essence of this agreement.”

That last sentence means that the option must be exercised on or before January 30th, 1973, at 12:00 o’clock P.M.

Mr. Schoonover delayed in delivering the abstract of title. He thought 12:00 o’clock P.M. meant noontime. He testified as follows:

Q. What did he say in that regard?
A. He said, “I want the abstract in the morning so I can look it over.”
Q. What did he say in regard to the noon hour?
A. He said he had to have sufficient to read the abstract over and check through the abstract, and I told him that there was nothing in the option whatsoever that I had to deliver that abstract to him one minute ahead of noon so he could study it over.

Not only does the prevailing opinion err in assuming that payment was a prerequisite to exercising the option, but it also misinterprets the meaning of “cash” in the sentence: “If parties of the Second Part [Nances] exercise this option and purchase said property, they shall be entitled to credit for the option price of $1000.00 making the remaining purchase price to be paid in cash $17,000.00.” This sentence clearly shows that the payment was not a prerequisite to the exercise of the option. Payment was to be in cash after the option was exercised. A payment in cash is to be distinguished from payment on time. The word “cash” is defined in the American Heritage Dictionary as “. . .2. Payment for goods or services in money or by check.”

The Schoonovers had received a -check from the Nances for $1,000.00 as a payment for the option. The check tendered by the Nances for $17,000.00 was also good. Mr. Schoonover had delayed matters until the banks were closed, and it was not possible for Mr. Nance to secure legal tender in payment until the next morning during banking hours. Besides, under the law, once an option is exercised, the parties have a reasonable time in which to make payment and delivery of the deed.

The main opinion cites three Utah cases in footnote 1, none of which is in point.

Sieverts v. White, 2 Utah 2d 351, 273 P.2d 974 (1954), was a suit to cancel a uniform real estate contract. The purchasers were in arrears and were given a time in which to make the payments current. On August 7, 1951, one day prior to the last day for payment, they mailed a registered letter to the vendors advising that they were “ready to present” a check in the required amount. This court held that an offer to send a check was not a tender.

In Lincoln Land & Development Company v. Thompson, et al., 26 Utah 2d 324, 489 P.2d 426 (1971), there was an option containing the following language: “The Buyer may exercise this ‘Option’ by notice in writing of intent to exercise delivered to the undersigned by registered mail * * * together with a tender of the $5800 balance of the down payment.” The optionee attempted to exercise the option by letter but did not tender the $5800 by check or otherwise. This court simply held that he did not exercise the option according to its terms.

Coombs v. Ouzounian, 24 Utah 2d 39, 465 P.2d 356 (1970), was also a case where the option by its terms could be exercised only by paying money. This court said:

If an option contract provides for payment of all or a portion of the purchase price in order to exercise the option, the optionee, to be entitle'd to a conveyance, must not only accept the offer but pay or tender the agreed amount within the prescribed time. [Emphasis added.]

The main opinion in relying on the above-cited cases shows clearly that it does not distinguish between exercising an option and making payment pursuant thereto. The option in the instant matter did not require payment as a condition of exercis*899ing it. The option was exercised pursuant to its terms, and the Nances tried to pay-cash for the land.

I would reverse the judgment and remand the matter with directions to enter judgment for the Nances and give them ten days after remittitur in which to pay the price agreed upon. I would also award costs to the appellants.

CROCKETT, J., concurs in the views expressed in the dissenting opinion of EL-LETT, J.