Opinion
18840.
ARGUED FEBRUARY 14, 1955.
DECIDED MARCH 15, 1955.
Specific performance. Before Judge Lilly. Colquitt Superior Court. November 4, 1954.
Whelchel Whelchel, for plaintiff in error.
Gibson DeLoach, contra.
1. A contract which is required by the statute of frauds to be in writing, and which is therefore put in writing, can not be modified by a subsequent agreement in parol.
( a) In order to be valid, a subsequent agreement by the optionor to extend the time stipulated in the original option must be supported by a valuable consideration.
2. The allegations of the petition are insufficient to show that the optionee, as a matter of right, had a valid extension of time.
3. The petition failed to state a cause of action for any relief, and the court properly sustained the general demurrers.
ARGUED FEBRUARY 14, 1955 — DECIDED MARCH 15, 1955.
Gulf Oil Corporation brought a petition for specific performance against Levi Willcoxon, in which it was alleged: On January 25, 1954, in consideration of $500, the defendant executed an option agreement giving the plaintiff the right to purchase a described lot in the City of Moultrie, for the sum of $17,500. A copy of the option contract is attached to the petition. The plaintiff "promptly" employed attorneys to examine the title to the property, and as a result of their examination it was found that there were two outstanding deeds to secure debt against the property, in stated amounts. The plaintiff employed a registered surveyor, and the plat of the surveyor disclosed that the lot was 90 feet wide on South Main Street and 93 feet wide on the east side, instead of being a rectangular lot 105 feet wide, as described in the option. On or about March 6, 1954, as soon as the plaintiff learned that the lot as surveyed did not contain the area described in the option, it advised the defendant of the shortage and told the defendant that additional surveys must be made to determine with absolute accuracy the width of the lot, and after such surveys were made it would be necessary to submit them to the office of the plaintiff in Pittsburgh, Pennsylvania, to determine whether or not the plaintiff would be willing to accept the land which the defendant actually owned, since the plaintiff required a certain minimum footage on South Main Street. J. B. Harper, manager of the plaintiff's Albany office, explained to the defendant that delay would be caused by reason of the additional surveys and the submission of the matter to the home office of the plaintiff, and the plaintiff considered that additional time should be allowed to it under the clause of the contract which provided: "Should unavoidable delays arise in examination of the title, securing of permit, survey or otherwise, making it impossible to complete purchase within the time specified by this option, it is understood and agreed that additional time will be granted in which to complete this work." The defendant assented to this construction of the contract. The plaintiff "immediately" employed another surveyor to check the survey of the lot, and he advised the plaintiff that the north property line should be 2.5 feet north of the property line shown on the first plat, but that the adjoining property owner had not agreed to that line. On April 26, 1954, the defendant was advised that the plaintiff would accept a lot facing 92.5 feet on South Main Street in satisfaction of the option, if the defendant would establish the north line and could give it good title to such lot. The defendant stated that he was of the opinion that the option had expired, but when he was reminded of the conversation of March 16 (6?), 1954, with reference to the extension-of-time clause in the option agreement, he told the plaintiff's attorneys to proceed with negotiations with the north boundary owner. The plaintiff obtained an oral promise from the adjoining property owner to enter into an agreement fixing the north boundary line as above indicated. "After . . . plat of survey and a certificate of title was furnished the plaintiff, on May 21, 1954, the plaintiff tendered to the defendant the remaining $17,000 purchase money, which tender was refused by the defendant on May 31, 1954, on the ground that the option had expired before the plaintiff had complied with its terms. That petitioner now stands ready and holds itself at all times ready to comply with the terms of said option agreement between itself and the defendant, and makes the tender above referred to a continuing tender." Under the terms of the option, the plaintiff was to pay the defendant as purchase price for the property on the basis of $166.67 per front foot. The defendant is not able to convey a frontage of 105 feet on South Main Street as described in the option, but the plaintiff desires to purchase the lot which the defendant can convey (fronting 92.5 feet on South Main Street.) The plaintiff is entitled to pay to the defendant, or to his lienholders for his benefit, the sum of $15,416.98 as the purchase price of the property which the defendant can convey, and the plaintiff has heretofore tendered, and now tenders, to the defendant, the sum of $17,000, the plaintiff to receive compensation for that which the defendant can not convey. The defendant is unable to respond in damages adequate to cover the injuries resulting to the plaintiff by reason of the defendant's breach of the contract; and unless specific performance is decreed, irreparable damage will be done to the plaintiff.
The prayers were: for process; that the defendant be required to specifically perform the contract by conveying to the plaintiff the land described in paragraph 10 (the paragraph describing a lot running 92.5 feet along South Main Street), and that the amount of compensation due to the plaintiff for the inability of the defendant to specifically perform the contract in its entirety be fixed and the plaintiff be credited on the sum of $17,000 for such sum; and for other and further relief.
The option agreement shows that the contract was entered into on January 25, 1954, and a period of 90 days was given for the exercise of the option. The purchase price was $17,5000, and the consideration of the option was $500, which was to be credited on the purchase price. The optionor guaranteed that he had a good and marketable record title, free from all liens and encumbrances. He agreed that, if the property should be purchased by the optionee, he would discharge all outstanding liens. It was agreed that if, during the option period, the title should be found to be defective and unmarketable of record, or the optionor should fail to secure the necessary licenses and permits for the proper use of the premises, it should have the right to surrender the option and receive back the consideration paid therefor.
The defendant filed general and special demurrers, which were sustained, and the petition was dismissed. The exception is to that judgment.
The parties will be referred to in the opinion as they appeared in the trial court.
1. "The obligation by which one binds himself to sell, and leaves it discretionary with the other party to buy, is what is termed in law an option, which is simply a contract by which the owner of property agrees with another person that he shall have a right to buy the property at a fixed price within a certain time." Black v. Maddox, 104 Ga. 157, 162 ( 30 S.E. 723). In the present case the agreement is an option. Franklin v. McCormick, 182 Ga. 757 ( 187 S.E. 6).
From the allegations of the petition it is not clear whether the plaintiff relies upon an extension of the option by agreement in parol, or whether it relies upon an extension of the option as a matter of right on the basis of "unavoidable" delay.
An agreement resting wholly in parol whereby one promises to sell to another an interest in land upon payment within a given time of a specified amount is within the statute of frauds. Code § 20-401 (4); Lyons v. Bass, 108 Ga. 573 ( 34 S.E. 721); Neely v. Sheppard, 185 Ga. 771, 775 ( 196 S.E. 452)."A contract which must, under the statute of frauds, be in writing, and which, accordingly, is put in writing and duly executed, can not be subsequently modified by a parol agreement." Augusta Southern R. Co. v. Smith Kilby Co., 106 Ga. 864 ( 33 S.E. 28); Willis v. Fields, 132 Ga. 242 ( 63 S.E. 828); Hawkins v. Studdard, 132 Ga. 265, 266 ( 63 S.E. 852, 131 Am. St. R. 190); Elrod v. Camp, Flanigan Toole, 150 Ga. 48, 50 ( 102 S.E. 357); National Finance Corp. v. Eicholz, 165 Ga. 799 ( 142 S.E. 134); Nowell v. Mayor c. of Monroe, 177 Ga. 648, 651 ( 171 S.E. 136); Stonecypher v. Georgia Power Co., 183 Ga. 498, 502 ( 189 S.E. 13).
In so far as the plaintiff may rely upon an extension in parol by the defendant of the time in which the plaintiff might exercise its option, such extension would be void, because a valid extension could be made only in writing.
(a) In Broadwell v. Smith, 152 Ga. 161 ( 108 S.E. 609), it was held: "Where the owner of land upon a valuable consideration grants an option to another to buy the land within a stated time, time is of the essence of the contract; and in order to raise a binding promise on the part of the optionor to sell, the optionee must make an election and offer to perform within the time stipulated in the option contract. . . A subsequent agreement by the optionor to extend the time, whether made before or after the time limited for exercise of the original option, must be supported by a valuable consideration, as such agreement is in effect a new option." See also Mattox v. West, 194 Ga. 310, 315 ( 21 S.E.2d 428); Jones v. Smith, 206 Ga. 162, 163 ( 56 S.E.2d 462).
A subsequent agreement by the optionor to extend the time in which the optionee might purchase the property must be supported by a valuable consideration, since the extension would be in effect a new option.
2. The allegations of the petition are wholly insufficient to show any "unavoidable" delay arising in "examination of the title, securing of permit, survey or otherwise." "Unavoidable" means not avoidable; incapable of being shunned or prevented; inevitable. Webster's Unabridged Dictionary (2d ed.), p. 2759. In Fish v. Chapman Ross, 2 Ga. 349, it was said that "unavoidable is synonymous with inevitable, and inevitable or unavoidable accidents are the same with the acts of God." In Central Line of Boats v. Lowe, 50 Ga. 509, 511, it was said: "If by any care, prudence or foresight, the thing could have been guarded against, then it is not `unavoidable.'"
The allegations of the petition show neither "unavoidable" delay, nor performance by the plaintiff. Construing the petition most strongly against the pleader, as we must on general demurrer, the allegations show nothing more than inaction by the plaintiff, and inaction is not performance. Augusta Southern R. Co. v. Smith Kilby Co., supra; Hawkins v. Studdard, supra; Neely v. Sheppard, supra. The plaintiff could not, therefore, as a matter of right rely upon any extension of time in which to exercise its option to purchase under the provisions of the agreement with reference to "unavoidable" delay.
3. In a supplemental brief the plaintiff insists that its petition is based upon the case of Phinizy v. Guernsey, 111 Ga. 346 ( 36 S.E. 796, 50 L.R.A. 680, 78 Am. St. R. 207), and that the latter case is controlling on the right of the plaintiff to have the judgment of the court below reversed. The Phinizy case is not in point on its facts with the present case and does not sustain the plaintiff's contentions. The first statement in the Phinizy case was: "This was an action brought for the purpose of compelling the specific performance of a contract for the sale of land." In the present case the contract is not one for the sale of land, but an option whereby the defendant agreed for a stated consideration that the plaintiff would have the right to purchase described lands within a specified time. The rights of the parties under a contract of sale and an option are in no sense the same.
Time is not generally of the essence of a contract of sale, but by express stipulation or agreement it may become so. Code § 20-704 (9); Ellis v. Bryant, 120 Ga. 890 ( 48 S.E. 352); Burkhalter v. Roach, 142 Ga. 344 (3) ( 82 S.E. 1059). The rule with reference to options is just the reverse, and an option is peculiarly an agreement of which time is of the essence. Larned v. Wentworth, 114 Ga. 208 ( 39 S.E. 855); Jarman v. Westbrook, 134 Ga. 19 ( 67 S.E. 403); Broadwell v. Smith, supra. The rule in Georgia is the general rule. 55 Am.Jur. 509, § 40.
The distinction between a contract of sale and an option was stated by this court in Hughes v. Holliday, 149 Ga. 147, 150 ( 99 S.E. 301), in the following language: "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. . . 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." (Italics ours.)
The defendant insists that the court properly sustained his general demurrers for a number of reasons we have not set forth. The petition failed to state a cause of action for the relief sought under the foregoing rules, and it would serve no useful purpose to rule upon all of the contentions made by the defendant.
Judgment affirmed. All the Justices concur.