Hughes v. Holliday

(After stating the foregoing facts.) The contract sel out in the preceding statement is aD option; it is merely an offer to sell, as distinguished from a contract of sale. Simpson v. Sanders, 130 Ga 265, 269 (60 S. E. 541); Mallet, v. Watkins, 132 Ga. 700 (64 S. E. 999, 131 Am. St. R. 226). Cf. Allison v. Dunwody, 100 Ga. 51 (28 S. E. 651). At common law, time of performance is generally of the essence of a contract; in equity, time is not of the essence unless it is expressly or by clear implication made so. 2 Story’s Equity Jurisprudence (14th ed.), § 1064. In this State the equity rule has been adopted as a part of our statutory law. Paragraph 8 of section 4268 of the Civil Code of 1910 declares: “Time is not generally of the essence of a contract; but, by express stipulation or reasonable construction, it may become *150so.” In the case of Larned v. Wentworth, 114 Ga. 208 (39 S. E. 855), an option contract was under consideration. At page 222 of the opinion in that case it was said: “It is peculiarly a contract of which time is of the essence.” Because of the one-sided nature of an option contract, time of the election by the optionee is of the essence of the contract in equity as well as in law, whether the contract expressly so stipulates or not. James on Option Contracts, § 862. The failure of the optionee to elect and to give notice of his election within the time limited in his contract, if there be stipulation as to time, and within a reasonable time implied by law" in the absence of stipulation, ends his option rights. Prior v. Hilton & Hodge Lumber Co., 141 Ga. 117, 118 (80 S. E. 559). The contract considered in Ellis v. Bryant, 120 Ga. 890, 893 (48 S. E. 352), was a contract of sale. The distinction between a contract of sale and a contract to sell is important. The rule against forfeitures is applicable in the former case. Generally it has no application in the latter case. The exercise of the right of election given to the optionee under an option contract is a condition precedent to the vesting of any property right in him; hence the rule against forfeitures has no application. There may be cases, as where the option is connected with a lease .and is supported by adequate consideration paid for the lease, in which equity will consider the option as in the nature of a property right already acquired, and will, to avoid a forfeiture, refuse to consider time as of the essence óf the contract; as for example, Schroeder v. Germeinder, 10 Nev. 355; McCormick v. Stephaney, 61 N. J. Eq. 208. The present is not such a case. We have treated the contract as more than a mere offer to sell, which may be withdrawn at any time before acceptance, but as an option to sell, based upon a valuable consideration. It is unnecessary to decide whether it is competent to show that the recited consideration was not in fact paid, because, conceding that the optionor can not legally withdraw from it within the time limited by its terms, the optionee can not have it specifically performed nor can he claim any right ünder it unless he does the prescribed thing within'the time limited, in the absence of any evidence of waiver, estoppel, fraud, or other equitable ground sufficient to excuse his delay. Larned v. Wentworth, supra. Under the evidence the court erred in directing a verdict for the plaintiff.

Judgment reversed.