Callisch v. Farnham

California Court of Appeal Jan 29, 1948 No. Civ. 7400Published

Before: Peek

AI Brief

AI-generated · verify before citing

Holding. An optionee's mere written notice of intent to exercise an option does not constitute a valid exercise of the option when the contract requires payment of a specified sum within a set time; failure to tender that payment results in the termination of the option. Furthermore, the optionee is not excused from the requirement of timely payment by the optionor's inability to provide clear title at the time of exercise, as the contract provided the optionor a subsequent period to perfect title.

Issues

Whether a written notice of intent to exercise an option constitutes a valid exercise of the option without the required payment.
Whether the optionor's inability to provide clear title at the time of the option's expiration excuses the optionee from the requirement to tender payment to exercise the option.

Disposition. affirmed

Quotations verified verbatim against the opinion

“the letter of January 14th, wherein appellant merely informed plaintiff he had “elected to go through with and complete” their deal, without the tender of the $6,000, did not constitute strict compliance”

“The 90-day period given to the plaintiff in which to perfect his title indicates that delivery of the deed was not a condition concurrent with the defendant’s acceptance of the offer and the formation of the sale contract.”

[428]

PEEK, J.

The present controversy arises out of a written option agreement for the sale of certain real property by plaintiff to defendant. The pertinent portions of the agreement provide as follows:

"Witnesseth : That for and in consideration of the sum of Two Hundred Fifty Dollars ($250.00) to him in hand paid, the receipt whereof is hereby acknowledged, the party of the first part hereby agrees to hold until the 18th day of January, A.D. 1946 (time being of the essence of this option) subject exclusively to the order of the party of the second part the following described real property to-wit:

(Describing it)

"Or to transfer and convey said property to the party of the second part by grant deed free from all encumbrances not hereinafter set forth at any time within the above prescribed time to the said party of the second part at and for the price of Nineteen Thousand Five Hundred Dollars ($19,500.00) lawful money of the United States, payable on the following terms:

"a. Six Thousand Dollars ($6,000.00) upon the

exercise

of this option by the party of the second part:

"If the party of the second part of this option shall duly

elect to exercise

this option, then, and in that event, the amount paid as consideration for this option shall be credited upon the said purchase price; but if the party of the second part of this option shall fail duly to

exercise

this option within the time prescribed therefor, then, and in that event, the amount paid as consideration for this option shall be retained by the said party of the first part in full satisfaction for the aforesaid time.

"The party of the first part shall have ninety (90) days after the

election to exercise

this option by the party of the second part within which to perfect title.” [Italics ours.]

Callisch v. Farnham

AI Brief

PEEK, J.

More from California Court of Appeal

Related research

AI Brief