Graham v. Jones
Graham v. Jones
Opinion of the Court
Graham brought suit against Jones in the United States District Court for the Southern District of Georgia to recover damages for the alleged breach of an option for the sale, of lands in Florida. The petition was dismissed on demurrer.
The question raised is: Had the option ripened into a binding contract? The option was contained in two letters dated July 31, 1919. By the first letter Jones agreed to have conveyed to Graham, or assigns, by good and sufficient warranty deed by the National Security Company, a corporation in which (he title was vested, the lands described therein, containing 10,280 acres, more or less, for SB per acre; the sum oí $1,000 to be paid on or before August 10, 1919, and lire balance on or before September l, 1919. Jones was to furnish Graham, or assigns, a certified abstract, showing' clear, unincumbered, merchantable title to said lands in said Security Company. Jones was to discharge all taxes and liens on the land, and on payment of the full purchase price cause to be delivered a warranty deed from said Security Company, conveying said lands by a clear and merchantable title.
Graham was to have “this option to purchase caid lands without payment until August 10, 1919,” on or before which date Jones was to be paid $1,000, and on its payment Graham was to have until September 1st in which to complete the payment of the purchase price, and if not paid by said date the agreement to sell to be void; the $1,000 to be retained as liquidated damages. If the $1,000 was not paid on or before August 10, 1919, the agreement was to terminate as of that date, and to be null and void and of no effect.
This letter created an option without consideration until August 10th, when, on payment of $1,000, it would have constituted a contract between the parties for the purchase and sale of the land, with the right in Graham to avoid further compliance by forfeiting $1,000 as liquidated damages on failure to complete the sale by September 1st. The second letter agreed that, if the option was complied with, the total price should be $70,000.
It appears that in 1918 a contract for the purchase of said land was entered into between Graham and the Security Company, which was canceled by Graham on request of Jones in March, 1919, to enable him to effect a settlement with one Wilson, who claimed an interest therein. Jones, in the letter requesting such cancellation, promised that if be acquired Wilson’s interest he would convejf the land to Graham for $7 per acre at any time within three months of the settlement of said controversy. Jones never acquired Wilson’s interest.
On August 4, 1919, Graham wrote Jones a letter, addressed to Mid-ville, Ga., stating he was prepared to pay the $1,000 on August 10th, requesting Jones to have the abstract brought down to date as soon as possible, and to state where he could communicate with Jones on or about August 10th for the purpose of making the $1,000 payment, sug
On August 7th, E. W. Brooks, president of the National Security Company answered said letter from Midville, saying the option agreement of July 31st and said letter of August 4th had been turned over to the writer. Brooks requested that the check for $1,000 be sent to him, on receipt of which he would send the Security Company’s usual form of option allowing payment of the $70,000 on or before September 1, 1919. The letter also stated that Jones said he had called Graham’s attention to the lis pendens recorded in Manatee county, Fla., and that Graham had offered to buy subject to said lis pendens.
On August 9th, Graham replied to Brooks, rehearsing his version of the agreement, and denying that he had agreed to accept the title subject to the lis pendens, but that he had stated “that the title would have to be investigated by the attorney of the purchaser, who would have to certify that the same was not a cloud on the title, and that the Security Company’s deed conveys a clear, unincumbered, merchantable, fee-simple title, before accepting same or making final payment.” He advised that he was sending a check, accompanied hy a contract to be signed by Jones and the Security Company, providing for the sale of said land, and binding all parties according to its terms, to the Bank of Midville, to be delivered on the execution of said contract by said Jones and said Security Company. Graham also on said August 9th wrote to the Bank of Midville, inclosing a certified check for $1,-000, payable to the order of Jones, together with said contract, with direction to deliver the check on execution of said contract. The check was requested to be returned by the Bank of Midville, and 'the signature of the Security Company to the contract tendered by Graham declined. No other tender of payment of said $1,000 seems to have been made at any time, and no tender of the $69,000 was ever made.
’[1] Whether there was, or not, any consideration for the option of July 31, 1919, it is plain that its continuance beyond August 10, 1919, was conditioned on the payment of $1,000 on or before said date. If payment of $1,000 is not made on or before August 10th by express terms, it is provided that “this agreement likewise will terminate as of that date, and will be null and void and of no effect.” It is therefore plain that the contract was an option, in which time was of the essence of the contract,.and that the payment of the $1,000 on or before that date was essential to keep it alive. In an option to purchase land, time is of the essence of the contract, and where not made within the time limited the option expires. “It is peculiarly a contract of which time is of the essence.” Larned v. Wentworth, 114 Ga. 222, 39 S. E. 895; Jarman v. Westbrook, 134 Ga. 19, 67 S. E. 403; Pollock v. Riddick, 161 Fed. 280, 88 C. C. A. 326; Kelsey v. Crowther, 162 U. S. 404, 408, 16 Sup. Ct. 808, 40 L. Ed. 1017.
Judgment affirmed.
Reference
- Full Case Name
- GRAHAM v. JONES
- Status
- Published