Hall v. Center , 40 Cal. 63 ( 1870 )

"Wallace, J.,

delivered the opinion of the Court, Temple, J., Crockett, J., and Erodes, C. J., concurring :

Center and Spreckles were owners of certain premises and leased them to Hall for a term at a stipulated rent. During the running of the lease, Spreckles conveyed his undivided half of the reversionary estate to the defendant Grim.

The lease was signed by the lessors and lessee, and contained a clause to the effect that Hall should have the privilege of purchasing the premises at $1,750 on or before the expiration of the term.

Hall entered into possession under the lease, and performed all its conditions on his part, and during the term “made valuable improvements thereon, to wit: of the value of $8,500.” Before the term expired he endeavored to avail himself of the privilege of purchasing the premises reserved to him in the lease, and with this view he made a tender of the purchase price in due time and form, and demanded a conveyance.

The defendants refused to receive the purchase money, and having declined to convey, Hall brought this action to obtain a decree to compel them to do so.

To his complaint, setting forth the foregoing facts in substance, a general demurrer was filed by the defendants, which was sustained by the Court below, and the action dismissed, upon the ground, as it is understood, that the plaintiff’s claim to be admitted to purchase was a mere privilege; that he had not bound himself to make the purchase, and, of course, could not have been compelled by the Court to do so; that there was, therefore, no mutuality in the agreement, and hence it could not be the subject of a decree for specific performance in a Court of equity.

„ I do not think it necessary to enter upon a critical examination of the applicability to the facts of this case of the rule (which a review of the authorities would show to be far from general,) in Courts of equity, that a contract, in order to be the proper subject of a decree for specific performance should be mutual in its character, and such as might have been specifically enforced by either party against the other. The rule is one which is frequently adverted to, is well understood, and the reasons upon which it is rested are familiar. But the exceptions to its operation are numerous. Lord Bedesdale, in Lawrenson v. Butler, (1 Scho.&Lef. 13,) limits its application to a case “where nothing has been done in pursuance of the agreement,” by which it is to be understood that though an agreement may, at the time it was entered into, lack the element of mutuality, and for that reason may not be then such an agreement as equity would enforce, 'yet if the party seeking relief has subsequently, with the knowledge and the express or tacit consent of the other, placed himself in such a position that it would be a fraud for that other to refuse to perform, equity will relieve.

In the case at bar, the contract of the lessors, by which they covenanted that the lessee should have the option to purchase or not at his election, was founded upon an adequate consideration, was certain in its terms, was fair and just in all its parts, and was not a hard or unconscionable bargain. Why should not such an agreement be enforced ? The reason assigned by Lord Bedesdale (and he was distinguished for the strenuousness with which he maintained the necessity of mutuality,) in tbe case already mentioned, is tbat tbe lessors bere might be in tbis situation, tbat if tbe land should rise in value they would be compelled by a decree to sell at a stipulated price, while if it bad decreased in value tbe lessee could not be compelled to take it at any price.

But it is not easy to see why tbis would not be equitable. - May not tbe mere option to purchase be sold? Ór (to adopt tbe language of Judge Baldwin, in De Rutte v. Muldrow, (16 Cal. 513,) may not a man “as well agree to sell property upon tbe condition tbat another will consent to buy, as upon any other condition, or absolutely?”' 'And if tbe owner of an estate, has fairly made a contract for a sufficient consideration received by him, by which contract be has himself stipulated tbat another person may, at -the option of tbe latter, receive a conveyance of tbe estate upon tbe payment or tender of a fixed sum within a given time, what principle of equity is violated by making tbe owner comply with bis contract ? If tbe other party has obtained tbe option, be has fairly bought and paid for it, and there is no principle or policy of law violated in its purchase.'

In tbe case at bar, tbe privilege to purchase tbe fee was inserted in and made a part of an indenture of lease. Had there been a covenant to renew tbe term at tbe option of tbe lessee, it would not be doubted tbat equity would enforce. tbe renewal by decree. (Cooper v. Pena, 21 Cal. 403.) How is it tbat tbe Court would thus compel tbe lessor to part with an estate for years at tbe mere option of bis tenant, but would at tbe same time permit him to violate bis agreement to part with tbe fee, if tbe tenant elect to purchase it?

In tbe case at bar it appears, too, tbat an estate which was to be purchased at $1,750, has been improved by tbe tenant to tbe amount of $8,500; be has expended upon it nearly four times tbe original purchase price of tbe property. Tbis has been done in view of bis option to secure to himself both land and improvements by paying tbe stipulated price.

I am unable to appreciate tbe principle of equity which will, under tbe circumstances, deprive bim of botb land and improvements absolutely, or turn Mm round to such satisfaction as he may be able to recover at law for the admitted wrong clono him upon the part of the defendants.

The judgment is reversed and the cause remanded, with directions to overrule the demurrer to the complaint.

Sprague, J., expressed no opinion.