Opinion
37357.
DECIDED NOVEMBER 4, 1958.
Breach of contract. DeKalb Superior Court. Before Judge Hubert. July 21, 1958.
Fred W. Kerr, Carl T. Hudgins, for plaintiff in error.
Sam P. McKenzie, contra.
1. An option is a contract by which the owner of property agrees with another that he shall have the right to buy the property at a fixed price within a certain time.
2. A marketable title to property is one which can again be sold to a reasonable purchaser or mortgaged to a person of reasonable care as security for a loan of money.
DECIDED NOVEMBER 4, 1958.
Gerald P. O'Hara, Bishop of the Roman Catholic Diocese of Savannah-Atlanta, filed a suit against W. T. Swinks for breach of contract.
The petition as amended alleged in part that: the plaintiff and the defendant entered into an agreement on July 1, 1954, whereby the plaintiff agreed to purchase certain land provided stated conditions were met. A copy of the agreement was attached to the original petition, marked Exhibit A and made a part thereof, as fully as if incorporated therein; included among these conditions was the obligation of the defendant to give good and marketable title to the property in question, as ascertainable from the attached contract; under the terms of the agreement and pursuant thereto, the plaintiff paid the defendant twenty-five hundred ($2,500) dollars which money the defendant contracted to return to the plaintiff in the event that he was unable to comply with his obligation as set forth in the contract; on July 2, 1954, the plaintiff referred the contract to Andrew A. Baumstark, attorney, and requested that Baumstark have the title to the property checked; Baumstark discovered that there was a plat of record covering a subdivision of which this property was a part; this plat, dated March 15, 1954, is recorded in Plat Book 21, page 135, of the DeKalb County records; the plat contained restrictions, among which the following: "1. Said property shall be used for single family residence purpose only. 2. No temporary house, shack, tent, or trailer shall be erected on said property to be used for residential or church purposes; no lot shall be used for schools, kindergartens or churches;" these restrictions state specifically that they may be enforced, as covenants running with the land, by the owners of any lot shown on the plat, and are to remain in full force and effect until January 1, 1979; on July 4, 1954, the plaintiff's attorney, Andrew A. Baumstark, contacted James R. Venable, who was then the attorney for the defendant, and at the time discussed the title to the property and the above referred to restrictions of record; the defendant's attorney agreed at the time that it would be necessary to secure releases or quitclaim deeds from all the parties who had previously purchased lots in the subdivision; the defendant's attorney immediately began to attempt to secure releases from all parties who had purchased lots in the subdivision, but was unable to secure the releases from all of such purchasers; consequently, on July 27, 1954, a new plat was drawn by the defendant, which plat was approved on July 28, 1954, by Scott Candler, Commissioner of Roads and Revenues of DeKalb County, Georgia, and was recorded in Plat Book 22, page 23, of DeKalb County records, on July 29, 1954; the revised plat attempted to amend the original plat dated March 15, 1954, and referred to above, by stating that the plat was amended by "eliminating therefrom Block F, same having been placed thereon by error"; prior to the date of the filing and recording of the above referred to "revised" plat, the defendant, W. T. Swinks, Jr., sold and conveyed forty-six (46) lots in the subdivision to sixteen (16) purchasers; in addition to this, he also sold Lot 9 in Block B, and the deed to same was recorded July 29, 1954, which was the same date of the recording of the "revised" plat; thirty deeds were made by the defendant to lots in the subdivision; and twelve of these deeds, conveying thirty-seven lots, specifically referred to the first recorded plat, which plat included Block F, the land conveyed under the contract between the plaintiff and the defendant, all of these deeds are made subject to the restrictions shown on the first recorded plat; in addition to the twelve deeds, there are twelve other deeds which refer to the date of the plat, but do not refer to the place of its recording; on July 29, 1954, James R. Venable wrote Andrew A. Baumstark a letter referring to the "revised" plat and signed the same as "Attorney for W. T. Swinks, Jr.", a copy of the letter is attached, marked Exhibit B and made a part of the petition; the plaintiff shows that during the month of July, 1954, through his attorney, he contacted James R. Venable at least twice each week, urging the defendant's attorney to secure releases or quitclaim deeds from the parties who had purchased lots subject to the restrictions; and on each of these occasions, the defendant's attorney assured the plaintiff's attorney that he was in the process of securing the same; during the sixty-day period covered by the contract, the defendant's attorney, James R. Venable, orally agreed to take steps to secure such releases in order to allow the defendant to give the plaintiff "good and marketable title"; the plaintiff shows that, during each of the times that he contacted the defendant's attorney during the sixty-day period covered under the contract, he offered, on behalf of the plaintiff, to complete the contract and to purchase the property as soon as the defendant was able to give "good and marketable title" to the property in question; on August 19, 1954, the plaintiff's attorney, Baumstark, wrote a letter to the defendant with a copy to Venable, the defendant's attorney, stating therein that the letter was for the purpose of exercising the right to purchase as set forth in paragraph two of the agreement dated July 1, 1954, subject to the examination of title; on August 27, 1954, the defendant's attorney wrote the plaintiff's attorney confirming their previous oral conversation, and stated that he would proceed, "to get the people to sign the proper papers to release the covenants on the portion of this property, also the road that will be closed, which lies in a portion of this property"; the letter stated further, "you and your clients will have have ample time to get your survey, etc., and will not be restricted by any time limit or date; any reasonable time will be satisfactory with my client"; copy of the letter is attached hereto and made a part hereof as fully as if incorporated herein; at the time, the defendant was also aware that the land which he was contracting to sell was restricted, so that it could not be legally used for the purposes for which the plaintiff intended to purchase it; the plaintiff shows that at all times herein referred to, the restrictions, as set forth in the original plat, were valid and subsisting restrictions, and were such that the defendant could not give "good and marketable title" to the property, and therefore prohibited the plaintiff from using the property for the purpose for which he intended to purchase it; the plaintiff has repeatedly requested the return of the money as provided for under the contract, but the defendant has refused and continues to refuse to abide by the terms of the contract either to furnish "good and marketable title" to the land or refund the twenty-five hundred dollars deposit; on March 3, 1955, the defendant's attorney notified the plaintiff by registered mail that the defendant intended to retain the "earnest money," and that henceforth they considered "the contract cancelled"; copy of the letter is attached, market Exhibit C and made a part of the petition.
The agreement between the parties provides:
"Georgia, DeKalb County.
"For and in consideration of the sum of $2,500 cash in hand paid W. T. Swinks, Jr., hereby grants unto Gerald P. O'Hara, Bishop of the Roman Catholic Diocese of Savannah-Atlanta and/or his successors in office the right to purchase for a total consideration of $28,500 the lands hereinafter described under the terms and conditions hereinafter set out, the lands to be purchased being fully described as follows: All that tract or parcel of land lying and being in Land Lot 154 of the 15th District of DeKalb County, Georgia, and more fully described as follows: Beginning at the southwestern intersection of Shamrock Way and Shamrock Drive and running thence in a southerly direction along the western side of Shamrock Drive 570 feet to the south line of property of W. T. Swinks, thence west 610 feet to the east side of Sherill Ave. (a proposed street) thence north along the east side of Sherill Ave. 605 feet to the south side of Shamrock Way, thence east along the south side of Shamrock Way 640 feet to the point of beginning.
"The conditions of the sale are as follows:
"1. Should the property above described not be zoned for church and school purposes by the officials of DeKalb County, Georgia, then and in that event the $2,500 paid as stipulated above shall be refunded.
"2. The purchasers shall have the right to purchase the above described property for a period of 60 days from the date hereof, which period will be extended to include the next succeeding meeting of the zoning board of DeKalb County, should it appear that the matter of zoning shall be pending at such meeting.
"Time is the essence of this contract and should the said parties of the second part fail to exercise this option within the time herein stipulated, then and in that event the same shall become of no effect.
"The said W. T. Swinks, Jr., hereby obligates himself to make good and marketable title to the property hereinabove described.
"In witness whereof the said W. T. Swinks, Jr., has hereunto set his hand and affixed his seal, this July 1st, 1954.
"Signed, sealed and delivered W. T. Swinks, Jr. (L.S.) in the presence of: Gerald P. O'Hara, Bishop of Savannah-Atlanta per N.P. DeKalb County, Georgia Francis E. Hyland, Auxiliary Bishop, Attorney in Fact" The defendant filed general and special demurrers to the petition. The judge overruled the general demurrer and several of the special demurrers, and it is to these rulings exception is taken.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)." Gulf Oil Corp. v. Willcoxon, 211 Ga. 462, 465 ( 86 S.E.2d 507). The instrument in the present case clearly fits this definition and is an option.
2. The defendant insists that the judge erred in overruling its general demurrer to the petition because the plaintiff never exercised his right to purchase the property in question. The option placed a burden upon the defendant to have the property zoned for church and school purposes by the officials of DeKalb County. The plaintiff does not contend this condition was not complied with. The next burden placed upon the defendant was to "make good and marketable title to the property" in question. This leads us to the question of whether the defendant has a good and marketable title to the property. The definition in Georgia of a good and marketable title is clearly pronounced in Winer v. Flournoy Realty Co., 27 Ga. App. 87 (2) ( 107 S.E. 398) as follows: "Where there is no express stipulation for a particular sort of title, such as a perfect record title, or a title subject to the purchaser's approval, ordinarily the only implication in an executory contract for the sale of land is a promise to convey a `good title.' This term imports no more than a marketable title, or one free from reasonable doubt; that is, not only a valid title in fact, but one that can again be sold to a reasonable purchaser, or mortgaged to a person of reasonable prudence. Cowdery v. Greenlee, 126 Ga. 786 (2), 790 ( 55 S.E. 918, 8 L.R.A. (N.S.) 137); Ellis v. Lockett, 100 Ga. 719, 730 ( 28 S.E. 452)." See also, Horne v. Rodgers, 113 Ga. 224, 229 ( 38 S.E. 768). While it is true the property had covenants running with the land which prevented it from being used as a site for a church or school, this would not prevent it from being marketable, because it cannot be said that a reasonable man would neither purchase nor loan money on the property because of these restrictions.
The courts of some foreign jurisdictions have held contrary to that which is held here, but this court is bound by the previous holdings of the appellate courts of this State in which "marketable title" is defined.
The plaintiff also insists that the defendant agreed after execution of the option to obtain releases from the property owners of the subdivision and thereby remove the restrictive covenants from the property in question. Whether the plaintiff agreed to do this is immaterial because there being no new consideration shown the agreement would not be binding. Gulf Oil Corp. v. Willcoxon, 211 Ga. 462, supra; Jones v. Smith, 206 Ga. 162 ( 56 S.E.2d 462); Broadwell v. Smith, 152 Ga. 161 ( 108 S.E. 609).
The plaintiff having failed to exercise his option to purchase the property, the defendant was entitled to retain the $2,500. The judge erred in overruling the general demurrer to the petition.
Judgment reversed. Nichols, J., concurs. Felton, C. J., concurs specially.
I concur in the judgment for the reason that it is not alleged in the petition that condition number one of the contract was not complied with, to wit: that the $2,500 was to be refunded if the property was not zoned for church and school purposes by the officials of DeKalb County, Georgia. If the property had been so zoned the plaintiff could have used the property for the purposes of school and church.