Sheveland v. Reed

California Court of Appeal Apr 30, 1958 No. Civ. 9368Published

Before: Warne

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Holding. The court held that the appellants were not entitled to a refund of payments made for an option to purchase land because the payments were consideration for prior options that had already expired, and the subsequent option agreement lacked consideration.

Issues

Whether the appellants are entitled to the return of payments made for an option to purchase land after the option expired.
Whether the trial court erred in finding that the option agreement of March 27, 1954, lacked consideration.

Disposition. Affirmed

Quotations verified verbatim against the opinion

“Appellants had received the full equivalent of the price paid, hence there was no consideration for the March 27, 1954 option”

“When that time expires, the option holder has received the full agreed equivalent of the price he paid for his option; and a refusal to give effect to an acceptance that is one minute late results in no forfeiture.”

WARNE, J. pro tem.

This is an appeal from a judgment quieting respondents’ title to a tract of land in.Napa County.

The material facts, as found by the trial court, are that on March 18, 1953, the respondents, in consideration of $1,000,. gave appellant a 30-day option to purchase the subject property at $1,000 an acre, to be paid as follows: $1,500 at the time of the exercise of the option, $37,500 within 90 days thereafter, and the balance of $190,000 at the rate of $40,000 a year. The option provided that appellant would obtain title insurance at his expense and that respondents should have 60 days within which to cure any defect in the title. The option was not exercised within the time specified, but appellant' did pay respondents an additional $5,500 and on February 4, 1954, respondents agreed to extend the option to July 31, 1954, if appellant paid $3,000 by March 5, 1954. Upon the payment of $2,000 on March 1, 1954, the option was further extended to April 1, 1954. On March 27, 1954, respondents executed an agreement which recited that, in consideration of the $8,500 theretofore paid, respondents would extend the option if appellant paid $1,000 on or before April 1, 1954, and $24,500 on or before July 31, 1954.

The called for payments were not made and respondents brought the present action to quiet their title to the property and to have the option cancelled. Appellants, by way of cross-complaint, sought specific performance of the agreement to convey, claiming that the option had not terminated because respondents failed to clear title as required in the extension agreement of March 27,1954. They also asked for declaratory relief.

The March 27, 1954 option contained the following provision :

“. . . If at the time for exercise of option . . . July 31, 1954, the title to the property covered in this agreement is not free and clear of all liens and encumbrances including those specifically listed as exceptions Number Two (2) to nine (9)

[822]

inclusive in that certain preliminary report for a policy of title insurance, Order Number 48724, dated February 4, 1954, and issued by the Napa County Title Company, then

the time for exercise of. said option is extended until said liens and encumbrances have been removed,

Sheveland v. Reed

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