WACHOVIA BANK & TRUST COMPANY v. Medford

Annotate this Case

128 S.E.2d 141 (1962)

258 N.C. 146

WACHOVIA BANK & TRUST COMPANY and Mrs. Ruby M. Wilson, Co-Executors of the Estate of Burke E. Wilson v. Savannah Jones MEDFORD.

No. 385.

Supreme Court of North Carolina.

November 21, 1962.

*143 Hudson, Ferrell, Petree, Stockton, Stockton & Robinson, by Norwood Robinson, R. M. Stockton, Jr., Winston-Salem, for plaintiffs, appellants.

Blackwell, Blackwell, Canady & Eller, by T. Winfield Blackwell, Jack F. Canady, Winston-Salem, for defendant, appellee.

HIGGINS, Justice.

The plaintiffs make these contentions: (1) The limitation of 30 days was not controlling. (2) Mr. Wilson was entitled to reasonable time thereafter for title examination. (3) The tender of the purchase price and the demand for a deed on September 2, 1960, were within a reasonable time. (4) The defendant was estopped to plead failure to give notice and make tender by participating in an effort to clear up the title.

The defendant, on the other hand, contends: (1) The option specifically provided that a demand must be made within 30 days from June 10, 1960. (2) Cash in full, $15,000.00, (less $100.00 paid for the option) must be paid at the end of 30 days from June 10, 1960. (3) Within the 30-day period Mr. Wilson's counsel notified defendant he had found a defect in her title and was turning it down. (4) After the 30-day period had expired, plaintiffs' attorney requested a written extension or a new option. (5) Refusal of the request was sufficient notice to defeat any estoppel. (6) Mr. Wilson did not give notice of an unqualified election to purchase until after the building had burned and the owner became entitled to $45,000.00 insurance. At that time defendant's liability under the option had terminated.

The plaintiffs' action is not for specific performance, but for damages of $30,100.00, the exact amount of the insurance less the $14,900.00 which would have been due on the option price. Apparently the parties to the option were not too inclined to stand on strict legal rights until the building burned and the owner became the beneficiary of the insurance. After the expiration of 30 days the parties were still at liberty to negotiate further. Of course, the plaintiffs were anxious to pick up $30,000.00 on a $100.00 investment. The defendant was just as anxious to prevent the pick-up. Hence the dispute.

The Court is called upon to interpret the legal rights of the parties under their option. The document was written by Mr. Baldwin, representing Mr. Wilson, "at Mr. Wilson's direction." The defendant, without counsel, signed the option in Mr. Wilson's office. "Any ambiguity * * * is to be inclined against the party who prepared the contract." Jones v. Palace Realty Co., 226 N.C. 303, 37 S.E.2d 906. Mr. Wilson's option required him to make demand "within 30 days from the date hereof, upon the terms and conditions hereinafter set out, * * * Cash in full at the end of 30 days, * * *. In the event of the exercise of this option * * * the said Burke E. Wilson may have reasonable additional time for title examination." How was Mr. Wilson to exercise the right to purchase under the option? According to its plain and unambiguous terms, by the payment or tender of $14,900.00 and demand for a deed within 30 days from June 10, 1960. What is the modifying effect of the term "may have reasonable additional time for title examination?" The meaning seems to be this: Mr. Wilson, within 30 days from the date of the option, was required to bind himself to go through *144 with and complete the transaction provided the defendant could convey a good title. His binding obligation (conditioned upon a good title) was required within the 30 days life of the option in order to effect any extension of time for title examination. Otherwise, Mrs. Medford would continue to be bound and Mr. Wilson would be free to forfeit his $100.00 and refuse to be bound further. Suppose the building had been uninsured. The contemplation of such an event emphasizes the wisdom of the rule that time is of the essence of an option to purchase and acceptance and tender must be made within the time fixed for the exercise of the right. Douglass v. Brooks, 242 N.C. 178, 87 S.E.2d 258; Kottler v. Martin, 241 N.C. 369, 85 S.E.2d 314; Edwards Lumber & Land Co. v. Smith, 191 N.C. 619, 132 S.E. 593; Davis v. Martin, 146 N.C. 281, 59 S.E. 700; 55 Am.Jur., Vendor and Purchaser, p. 509, §§ 40-41. Failure to accept during the term of the option amounts to a rejection. 55 Am.Jur., Vendor and Purchaser, p. 508, § 39.

Mr. Wilson's attorney examined the title, found it defective and notified Mrs. Medford accordingly. Another attorney undertook to re-examine the title, requested Mrs. Medford to sign an extension or a new option. This request the defendant refused, stating he already had time. Reasons for the refusal are immaterial. If, beyond the 30 days Mr. Wilson sought to bind Mrs. Medford, he was required to bind himself. His failure so to do terminated his rights on July 10. The attempt to exercise them by the tender and demand for a deed on September 2, 1960, came too late. Douglass v. Brooks, supra; Winders v. Kenan, 161 N.C. 628, 77 S.E. 687; Trogden v. Williams, 144 N.C. 192, 56 S.E. 865, 10 L.R.A.,N.S., 867.

In the light of the option, the stipulations, and the plaintiffs' evidence, Mr. Wilson's representative has failed to make out a case for the jury. The judgment of nonsuit entered by Judge Gwyn is

Affirmed.