Vendor and Purchaser_option to purchase_specific performance
The trial court properly granted summary judgment for
plaintiff in an action for specific performance of an option to
purchase land where the option contained a clause stating that
the price of the option would be refunded if the sellers were not
able to deliver a good and sufficient deed. Although this clause
allowed plaintiff to decline to exercise the option and to
recover its payments if defendants were unable to perform, it did
not permit defendants to avoid their obligation to convey the
land on the ground that they are dependent upon the land to
provide food for their cattle which provide for their livelihood.
Williams, Boger, Grady, Davis & Tuttle, P.A., by Samuel F.
Davis, Jr., for plaintiff-appellee.
Hartsell, Hartsell & White, P.A., by Fletcher L. Hartsell, Jr.
and Kimberly A. Lyda, for defendants-appellants.
WALKER, Judge.
On 10 July 1985, the plaintiff entered into an Option to
Purchase Real Estate (Option Agreement) with the defendants. For
an initial consideration of $5,000.00, the Option Agreement gave
the plaintiff the option, for a period of 12 months, to purchase
thirty acres of land owned by the defendants in Cabarrus County for
$200,000.00. Thereafter, plaintiff and defendants annually entered
into thirteen separate agreements to extend the time for the
plaintiff to exercise its option by one year for a consideration of
$2,000.00 each. The last such extension agreement occurred on 1July 1998 and extended the time to exercise the option until 10
July 1999. Plaintiff paid the defendants a total of $31,000.00 for
the option under the Option Agreement and the extension agreements.
The Option Agreement states in part:
8. At any time within the closing period,
upon tender by the party of the second part
[the plaintiff] of said purchase price in the
sum above set out, parties of the first part
[the defendants] will make, execute and
deliver to said party of the second part a
good and sufficient deed for said land in fee
simple with general warranties and free from
encumbrances.
9. If said land be sold by said parties of
the first part to said parties of the second
part under the terms of this option, the sums
for which a receipt has been given as set
forth above shall be a credit on the cash
payment of the purchase price, but if said
lands be not sold within the periods above
limited and if the party of the second part
does not exercise the option to acquire a
right-of-way as hereinafter provided, then
said sums shall be retained by parties of the
first part as the purchase price of this
option and thereafter said party of the second
part shall have no further rights under this
option. In the event that the parties of the
first part, for any reason, are not able to
deliver to the party of the second part a good
and sufficient deed as required in Paragraph 8
of this option, then the purchase price of
this option shall be refundable to the party
of the second part. (emphasis added).
On 2 July 1999, defendants received written notice of
plaintiff's election to exercise its option to purchase the land.
The Option Agreement specified that, after the exercise of the
option, the plaintiff had ninety days to complete closing on the
land. Plaintiff prepared to close on 24 September 1999 even though
the defendants had refused to allow the plaintiff to have the land
surveyed pursuant to the Option Agreement. The record shows thatthe plaintiff was ready and able to purchase the land at closing.
However, defendants did not attend the closing and they have since
refused to convey the land to the plaintiff. Plaintiff filed this
action to enforce the Option Agreement by compelling the defendants
to allow the survey of the land and by ordering the defendants to
convey the land pursuant to the Option Agreement. Plaintiff moved
for summary judgment which was granted.
Summary judgment is appropriate where there is no genuine
issue of material fact and the moving party is entitled to judgment
as a matter of law. Langley v. Moore, 64 N.C. App. 520, 522, 307
S.E.2d 817, 819 (1983). Defendants appeal contending the trial
court erred in granting summary judgment for the plaintiff in that
the language of the Option Agreement is ambiguous and as such there
is an issue of fact. Defendants specifically contend that their
dependence on the land to produce food for their cattle creates a
factual issue as to whether they are excused from the Option
Agreement by reason of the language in paragraph 9 “for any reason,
are not able to deliver to the [plaintiff] a . . . deed.”
"'An agreement should be interpreted as a whole and the
meaning gathered from the entire contract, and not from particular
words, phrases, or clauses.'" Starling v. Still, 126 N.C. App.
278, 281, 485 S.E.2d 74, 76 (1997)(quoting Divine v. Watauga
Hospital, 137 F. Supp. 628, 631 (M.D.N.C. 1956)). Thus, the
language in the Option Agreement must not be construed in isolation
nor by leaving out words or phrases. It must be construed in light
of the other language in the Option Agreement. Defendants do not contend that they are unable to convey the
land by warranty deed free from encumbrances. Instead, they would
have us construe paragraph 9 as giving them a means of avoiding
performance under the Option Agreement if they have “identified a
legitimate reason for their inability to complete the transaction.”
Therefore, defendants assert they are dependent on this land to
provide feed for their cattle which in turn provides for their
livelihood. Our construction of the Option Agreement does not
support the defendants' contention. The Option Agreement only
allows for the plaintiff to decline to exercise its option and
recover its option payments if the defendants are unable to perform
according to paragraphs 8 and 9 of the Option Agreement. The
Option Agreement does not permit the defendants to avoid their
obligation to convey the land.
“A contract, whereby one party, for a valuable consideration,
grants to another an option on terms, conditions, and for a time,
specified, to call for the doing of a certain act, constitutes an
irrevocable offer which, on acceptance in accordance with its
terms, gives rise to a contract that may be specifically enforced.”
Byrd v. Freeman, 252 N.C. 724, 727, 114 S.E.2d 715, 718
(1960)(citations omitted). “An option to buy or sell land, more
than any other form of contract, contemplates a specific
performance of its terms; and it is the right to have them
specifically enforced that imparts to them their usefulness and
value.” Texaco, Inc. v. Creel, 310 N.C. 695, 706, 314 S.E.2d 506,
512 (1984)(quoting Watts v. Keller, 56 F. 1, 4 (8th Cir. 1893)). Thus, specific performance is a proper remedy for enforcement of an
option to purchase real estate.
In summary, the Option Agreement gave the plaintiff the option
to purchase land owned by the defendants. It did not provide a
means of avoidance as the defendants have asserted. Therefore, no
issues of fact exist and the trial court properly granted summary
judgment for the plaintiff entitling it to specific performance of
the Option Agreement.
Affirmed.
Judges MARTIN and TYSON concur.
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