Young v. Latham

Young v. Latham. Statutory Action of Ejectment. [Decided November 14, 1901.] 1. Contract to purchase land.; construction of; option. — A. contract between S. and L., whereby S., for a recited consideration, agreed to convey to L. certain land at any time before a specified date, and to execute a conveyance therefor, upon the payment by L. of a specified sum, and which provided that it should be void upon the failure of L. to avail himself of the option within the time specified, or to pay said specified purchase price, — is a mere option to buy, a mere exe-cutory agreement to sell and convey at a future date should L. elect then to purchase, and it passes no interest in or title to the land to L. 2. Executory contract for sale of real estate; option; legal remedies. — An option or executory contract for the sale of real estate does not affect the title, and the grantee therein cannot maintain ejectment against a purchaser of the land, with or without notice of such option; his only right of action at law being an action for damages against the vendor for breach of contract. Appeal from Madison Circuit Court. Tried before Hon. H. C. Speaks. ,, Statutory action , in,, the nature , of,,,,, ejectment. Latham’s, agreement,with,William Smith is as follows: “This agreement witnessetli, that,; for and, in consideration of one hundred dollars, to, the undersigned William Smith in hand paid by Samuel A...Latham, the receipt, of which is acknowledged, the , said William Sjpith, does,.coyenant to and; with the said Latham, that he will at,,any time before the .first day.of- January, 1900, grant,, bargain,,,sell and convey, with .uspal covenants of warranty, ,to- the, said J^atham” certain land (describing it), “and that he will execute and deliver to the said Latham a proper deed for said lands, but upon this condition however: that on tender, of such good and sufficient warranty deed as above agreed the said Latham shall pay to the said Smith the sum of One Thousand dollars in pash, and execute and deliver to said Smith his-seven promissory notes of $1,000 each,’’ etc., etc. “But in the event that said Latham shall not avail himself, of this option within the time specified, or shall pot pay .the said cash payment of $1,000 on the tender to him January first, 1-90Ó, of a warranty deed„ to-the -..premises, above -described}' and.,execute his notes--¡and*'mortgage-as- above -set out-foresaid-balance of > purchase -money "of seven thousand1 dollars- in the manner as -above agreed, then these present's 'are to be void;1 and"tlie'Said' William' Smith ‘is tó 'bé -discharged ffofii ’any liability ofi'achofint'thereof. Should the said Laéliám avail himself oí this option , in tli'e‘tmpnner and forip á])<>vp. described, npcL .copxply yfith., all the stipu-latío¿§; .out' ■tjb.e.ipfie dollars,now paid for this option shall be taken as a ¡part, of the,,cask payment of one. thousand-dollars to- be made January first, 190 0, - Should,-however,- the--said Latham fail, the said one hundred- dollars how paid1 shall- be'forfeited to the Said Sinith,'without any1 right 'Of 'recovery1' in said Latham for -the Saifie'.”'’'!-TKis agreement was executed M'arcñ 16', 1899, dndhfi’Janhhryl, 1900, Shñtli'cófiyeyed the land to Latham, according'to 'the'teihisfif theagreement. During the fall of 1899 the defenclamt Young leased the land from Smith for-the year-1900,- afid defended under this lehs& ■'1 i : ; - '' * From a judgment for plaintiff defendant appeals. ■Cooper & Foster, for appellant, cited Cochran v. Adler, 121 Ala. 442; Monroe v. Hamilton, 60 Ala. 226; 1 Devlin oil Deeds, §§ 656-657. R. W. Walker, contra, cited Land r. Hopkins, 7 Ala. 115; McOaeen r. 'Ivey, 36 Ala. 308; 1 Pomeroy’s Eq. Jur., Í 221; Rom ell v. Dayton, etc., Rij. 8 Am. St. Hep. 257; Mayer r. Taylor, 69 Ala. 403, 407; 28 Am. & Eng. Envy. Law, 70, 109; Corner r. Hhehan, 74 Ala. 457; Holdirin v. Loire, 22 Iowa 367; Rapley v. Kluyli, 18 S. E. Rep. 680. [MAJORITY — McCLELLAN, C. J.] McCLELLAN, C. J. — The contract between Smith and Latham bound the former to sell and convey the land in question to the latter upon specified terms a,t the- election of Latham. The agreement ivas unilateral in q sense in that Latham did not obligate himself to purchase, but it was not unilateral in any legal sense because a. valuable consideration passed from Latham to Smith for the assumption by the latter of the obligation to sell and convey to the former: In short the contract was a. purchase by Latham for one hundred dollars of the right to purchase the lands from Smith within a time and upon terms specified: an option to buy. It is plain that the contract on the part of Smith was not, any more1 or other than an agreement to .sell should Latham elect- to buy, a mere executory contract, to sell and convey the land at a future date1' upon terms then to be complied with by Latham if Latham then chose to purchase». It is too clear to require discussion that this contract, passed no interest in or title to the land to Latham: Every interest in and the absolute title to tin» land were as entirely and (essentially in Smith after this contract had been entered into as they had been before its execution. And it is equally clear that such title would have remained in 'Smith had he violated his contract with and refused to convey the land to Latham, and also that a conveyance by Smith of the land or any interest in it to a third person pending the term of Latham’s option would carry the legal title to the land, or to whatever interest was intended thereby to be passed, into such third party. And upon such conveyance, Latbaxa, in a court of law at least, would have ho remedy or redress except through an action for damages against Smith for the breach of the option contract. Of course in equity Latham would have rights and remedies against the grantee with notice in such a conveyance; but that is of no concern here where the action is purely legal — statutory action in the nature of ejectment — is prosecuted in a court of law, and turns upon 'whether the plaintiff has the legal title. The true doctrine is accurately and fully stated in the text and a note of the Am. & Eng. Ency. of Law, as follows: “An executory contract of sale is regarded differently at law and in equity. At law, it is a mere agreement which does not affect the title, and the breach of which gives but the right to sue for damages.” (note) “In the ordinary case of an executory contract for the sale of real estate, the effect is such that at law it confers upon the vendee a mere right of action. The estate remains the estate of the vendor, and the money remains that of the vendee.”—Vol. 28, p. 105; Chapman v. Glassell, 13 Ala. 50; Doe ex dem. etc., v. Haskins, 15 Ala. 619; Johnson v. Collins, 17 Ala. 318, 325; Collins v. Johnson, 57 Ala. 304. Upon the foregoing principles the plaintiff had no right of recovery against the defendant Young to whom Smith had leased the lands after entering into the contract with Latham: The defendant had the legal title under and for the term of the lease and the right of possession. The court should have given the affirmative charge requested by defendant. Reversed and remanded.