Simpson & Harper v. Sanders & Jenkins , 130 Ga. 265 ( 1908 )

Beck, J.

(After stating the facts.) 1. Considered as a contract of purchase and sale, the instrument set forth in the statement of facts, and signed by the defendants in error, was unilateral and wanting in mutuality. By the terms of that instrument the defendants agreed to sell to the plaintiffs the entire shingle output, with certain specified exceptions, of their mills located at a designated point. The instrument, as we have seen, was signed only by the defendants. Under its terms no promise was made nor obligation entered into by the plaintiffs. If the plaintiffs had not ■seen fit to give an order for the output of the defendants’ mill, the defendants could not, by tendering or shipping shingles to the plaintiffs, have compelled the latter to either take or pay for them. A promise by the plaintiffs to take the contemplated output of the ■defendants’ mill, if made at the time of the execution of the instrument referred to, would have been a good consideration for the-promise or undertaking of the defendants; but no such promise or undertaking was made or entered into by the plaintiffs. In Morrow v. Southern Express Co., 101 Ga. 810 (28 S. E. 998), it was said: '“Where mutual promises are relied upon as a consideration to sup■port a contract, the obligations of the contract must be mutually 'binding upon the respective parties; and if one assume under such .-an agreement to do a special act beneficial to another, and that other -under the terms of the contract is under no obligation to perform ■any act of corresponding advantage to the former, the agreement -is without such consideration as will support the promise of the ’party assuming to perform.” See also Cooley v. Moss, 123 Ga. 707 (51 S. E. 625), and cases there cited ; Broom’s Common Law (9th ed.), 300.

That a promise by one, with nothing in return, is void, is axiomatic. Bishop on Contracts (2d ed.), 35. Difficulty has been -found* however, in the application of this axiomatic, elementary -principle in certain cases, because of the peculiar facts of the cases •which either took or seemed to take the peculiar case from out the -■operation pf the rule. But in the present case, so far as it is sought ■to have the instrument under consideration declared a valid and 'binding contract of purchase and sale, there are no facts to prevent -the application of the rule. If Simpson & Harper, who are now .seeking to enforce the alleged contract, had for any reason seen fit-to decline to order shingles manufactured at the defendants’ mill, the defendants could not have compelled them to receive and pay -for the shingles, for the very simple reason that they had never .-.agreed or promised to do so.

2. But while we are clear that the instrument can not be upheld .,as a binding contract of bargain and sale, because of its lack of mutuality, and that therefore the court was right in sustaining the general demurrer to the first count of the petition, we are of the . opinion that the second count, which declared upon the contract as an option given for a valid consideration, set forth a cause of action' and was not open to attack by general demurrer. Disregarding the-form of the instrument and considering it iñ the light of all of its-provisions, the instrument vests the plaintiffs with certain rights,, ■inchoate at the time of the signing of the instrument, but which might accrue and did accrue upon the doing of certain things by them. Inasmuch as this contract under seal, and made in consideration of the sum of one dollar, binds the signer to sell but imposes no counter-obligation to buy upon the contemplated purchas — . ers, it amounted to no more than an offer or proposal of sale. In the case of Black v. Maddox, 104 Ga. 157 (30 S. E. 723), it was^ said: “By section 3645 of 'the Civil Code the law governing such contracts is laid down in the following terms: ‘The consent of the-parties being essential to a contract, until each has assented to all the terms, the contract is incomplete; until assented to, each party may withdraw his bid or proposition, unless a given time is agreed on in which the other party may’ assent.’ It would thus seem to be our law, that where a period of time is given in which the proposition may be accepted, such proposition can not be withdrawn before the expiration of such time. The principle upon which continuing offers ripened into a contract, by acceptance before withdrawal, proved of great benefit in commercial transactions, but was-in part unsatisfactory to the individual receiving the offer, by reason of its liability to be withdrawn at a time when it was of most value to him, and the inconvenience thus felt gave rise to an endeavor to prevent withdrawal and at the same time leave the party to whom the offer was made free to accept or reject the same. 21 L. R. A. note on page 128. This purpose was accomplished by procuring from the proposed vendor an obligation binding him to make a contract of sale. It is just as competent for a man to bind himself to make a contract of sale as it is for him to bind himself by a contract of sale. DeReutte v. Muldrow, 16 Cal. 505. 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. Ide v. Leiser, 10 Mont. 5 [24 Pac. 695, 24 Am. St. R. 17], In such contract two elements exist : first, the offer to sell, which does not become a contract until Accepted; second, the completed contract to .leave the offer open for the specified time. These elements are wholly independent and ■can not be treated together without great liability to confusion and ■error. 21 L. R. A. 128, note. . . Such a contract [to leave the •offer open for the specified.time.] is subject to all the rules governing other contracts, and in general must be supported by a eonsider■ation. Coleman v. Applegarth, 68 Md. 21 [11 Atl. 284, 6 Am. St. R. 417]. Where a consideration is paid for the option, however, ■ the party making the offer can not lawfully withdraw it. If the ■offer is in writing, for a valuable consideration, and time is given within which it shall stand open for acceptance, such option, during the time specified, is irrevocable. Weaver v. Burr, 3 L. R. A. 94 [31 W. Va. 736, 8 S. E. 743] ; Bradford v. Foster, 87 Tenn. 4 [9 S. W. 195] ; Linn v. McLean, 80 Ala. 360 ; Souffrain v. McDonald, 27 Ind. 269 ; Herrman v. Babcock, 103 Ind. 461 [3 N. E. 360].” The rule, therefore, may be regarded as settled that a contract by which the owner of property agrees with another person that the latter shall have a right to buy the property at a fixed price within ■a certain time, if based upon a valid consideration, is binding and may be enforced.

In Black v. Maddox, supra, it was held that a consideration of one dollar, the instrument relied on being under seal, was sufficient to support the option. And in Mathews Slate Co. v. New Empire Slate Co., 122 Fed. 972, it was said, “This court is of the opinion that if two persons enter into a contract in writing under seal, by which one party, in consideration of $1, the payment of which is acknowledged, agrees to sell and convejr to the other party within ..a specified time certain lands and premises, on payment by the other party of a specified consideration, such contract is valid and binding.”

The instrument sued on in the present case, the same being under ■seal, contains the following language: “The consideration of this Agreement is .as followsone dollar cash in hand this day paid, the receipt of which is'hereby acknowledged by the party of the first part, and the faithful performance of the agreement hereinafter ■specified and which is hereby made a part of this contract. Said party of the first part hereby sells their entire shingle output [local wagon trade excepted] from March 1st to September 1st, [1905], 'for No. Is at $2.00, and March 1st to October 1st, for No. 2s at 75 cents: Beginning September 1st fox No. Is, and October 1st for No. 2s, until March 1st, 1906, No. 1 shingles at $2.25, and No. 2 .shingles at $1.00.” As we have pointed out above, the words, “hereby sells their entire shingle output,” amount to nothing more than an offer or proposal of sale. The “output” of shingles contemplated was of shingles not then manufactured and on hand, but of shingles to be manufactured after the date of the signing of the .agreement. But inasmuch as this undertaking was founded upon a sufficient consideration, it was a valid and binding contract upon the part of Sanders & Jenkins to sell and deliver to Simpson & Harper their entire shingle output, local wagon trade excepted, between the dates named in the contract, upon the acceptance by the latter of the terms of the offer within the time contemplated by the contract.

It may be that the terms of the instrument are not perfectly clear us to when the orders for shingles were to be given, and the time within which the offer was to remain open. But if the instrument be ambiguous in this respect, parol evidence, which does not take from or vary the terms of the writing, is admissible to show the meaning put upon it by both parties at the time of its execution, and the court will also hear evidence as to the attending circumstances, in order to explain the ambiguity. Civil Code, §§3673, 3675; Armistead v. McGuire, 46 Ga. 232 ; Novelty Hat Co. v. Wiseberg, 126 Ga. 800 (55 S. E. 923). And if the instrument, embracing the proposal or offer to sell, is silent as to the time given for acceptance, the offer will be construed to remain open for a reasonable time. Stone v. Harmon, 31 Minn. 512 (19 N. W. 88) ; Larmon v. Jordan, 56 Ill. 204 ; Fitzpatrick v. Woodruff, 96 N. Y. 565.

Special demurrers as well as general demurrers were filed by the defendants; but it i^ inferable from the order passed in the case that ■only the questions raised by the general demurrer were decided by the court below, and we have not undertaken to pass upon the.questions made by the special demurrers, and in remanding the case have left open such questions as were made by the special demurrers to be determined.

Judgment reversed.

All the Justices concur, except Holden, J., who did not preside.