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Knerr versus Bradley

Supreme Court of Pennsylvania1884-01-28
105 Pa. 190

Summary

Holding. The affidavit of defense was sufficient to raise a genuine factual dispute regarding whether the purchase option was valid and whether its exercise terminated the landlord-tenant relationship. The judgment for the landlord was reversed and the case remanded for trial.

A landlord sued a tenant for one year's rent on a furnished house, claiming $800 for the period from November 1, 1882 to November 1, 1883. The tenant filed an affidavit of defense asserting that the lease agreement contained an option clause allowing the tenant to purchase the property for $8,500, and that on October 31, 1882, the tenant exercised this option by providing written notice to the landlord. The tenant further claimed that upon exercising the purchase option and tendering the full purchase price, the landlord-tenant relationship ended and was replaced by a vendor-vendee relationship, meaning the tenant no longer owed rent.

The core dispute centered on whether the tenant's affidavit adequately raised a defense to the rent claim. Accepting all material allegations in the affidavit as true, the court found that the option clause was a valid and binding part of the original contract. Although the clause was executory in character and contemplated future agreement on payment terms, the tenant's offer to pay the full purchase price in cash upon delivery of the deed rendered the terms unimportant. Once the tenant exercised the option through written notice, a valid contract of sale arose, transforming the legal relationship between the parties from landlord-tenant to vendor-vendee as of November 1, 1882.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Sufficiency of affidavit of defense to defeat covenant action for rent
  • Validity and enforceability of an executory purchase option clause in a lease
  • Whether exercise of a purchase option terminates the landlord-tenant relationship

Procedural posture

The trial court entered judgment for the landlord based on an insufficiency of the tenant's affidavit of defense in a covenant action for rent, and the tenant appealed.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Mr. Justice Clark

delivered the opinion of the court, February 4, 1884.

The single question presented on this record is, whether or not judgment was properly entered for want of a sufficient affidavit of defence.

The action is covenant, upon a contract under seal, brought to recover the rent of a furnished house and lot of ground at Bryn Mawr, from the first day of November, 1882, to the first day of November, 1883, $800. The plaintiff filed with his praecipe a copy of the covenant, together with a statement of the amount of his claim.

The affidavit of defence, which was filed, omitting the merely formal parts thereof, is in the words and form following:

“«The copy of the lease filed in this case and upon which suit is brought is an incomplete and inaccurate copy, and does not set forth the entire contract entered into between plaintiff and myself. The contract of lease executed between us and delivered to me, contained a clause as follows: ‘It is also agreed that the said Calvin B. Knerr shall have the option of purchasing the premises described in this lease for the price or sum of eight thousand five hundred dollars, on such further terms as shall be mutually agreed upon bj*- the said Bradley and said Knerr,’ which covenant together with other matter material to the determination of this matter in controversy bus been omitted from the copy filed. I have kept all covenants contained in said lease, and paid all the rent due under said lease up to the 31st day of October, A. x>. 1882, inclusive. Oii that day I exercised the option of purchase granted to me in the above mentioned clause in the contract of lease, and sent a written notice to plaintiff, notifying him that I would take the.premises described in the lease, pay to plaintiff the sum of eight thousand and five hundred dollars upon thedelivery of title for the said premises, and requested plaintiff to leave the title-papers with his, plaintiff’s attorney, so that my conveyancer might be able to prepare a deed of the premises. And further, I have at divers times, unto the said Caleb II. Bradley, or his-attorney, tendered and offered to pay the purchase money mentioned in said contract of sale, and demanded a deed for said premises, and insisted on my right to avail myself of the said option to purchase, and offered and now offer to pay the said purchase money with interest from the 31st day of October, A. D. 1882, upon the execution of a proper deed of conveyance to me. But the said Caleb H. Bradley has-at all timesdisregarded his said covenant "to sell the said premises to me for the sum specified in the said covenant. .

“ I am informed and submit that, having exercised my option and notified plaintiff thereof, as above stated, the relation of landlord and tenant under the said contract ceased; that I was not thereafter liable to plaintiff for rent, but only for the amount of purchase money agreed upon-in the above mentioned clause to be paid upon the execution of a. proper deed of conveyance from plaintiff to me.

“In accordance with the suggestion of plaintiff’s attorney that ‘a Bill in Equity would soonest determine the whole matter in controversy,’ I brought a suit in equity to December Term, 1882, Common Pleas Court No. 1, to compel the said plaintiff, Caleb H. Bradley, to convey to me the said premises under the agreement and facts as above stated. The proceedings in that suit are now pending, and I am advised that the determination of that suit will determine my liability in the matter of rent.

“ All of which I believe to he true, and expect to be able to prove on the trial of this cause.”

As the question here presented is upon the sufficiency of the affidavit, we must assume that all its material averments are true. And, although it appears from an inspection of the contract, produced under a rule in the court below, and here at the argument, that the clause recited in the affidavit and alleged to be omitted from the copy filed, is written upon the hack of that instrument, and is apparently not subscribed by the parties, yet, according to the averments of the affidavit, the contract contained this clause; whether or not the signatures to the endorsement were omitted by any act of fraud, or by mistake, or the signatures to the contract were, or were intended to be applicable not only to the contract but to the endorsement as well, or in whatsoever way the clause may be shown to be a part of the contract, is a matter of proof and for a jury. The cause cannot be tried on the affidavits of the-parties ; it is sufficient if the affidavit distinctly declares that the clause under which the defendant claims is contained in,, and forms part of the contract, and is omitted in the copy filed. How, or in what manner he may establish this, or whether he can establish it at all, will hereafter appear. We have nothing to do with the proof of execution at this stage of the proceedings. Nor can any question here arise under the statute of frauds and perjuries; that question can only be-disposed of when it is properly presented; we cannot anticipate-the proofs.

It is contended, however, that this option clause is executory in its character; that it refers to a time when further terms shall be mutually agreed upon; that it lacks mutuality, and does not appear to be founded on any valid consideration,, and that it is therefore not binding upon the parties. It must be admitted that it is executory, but it is none the less binding on that account; it does contemplate that if the option is-exercised, further terms will be mutually agreed upon; but the sale provided for is of the premises described in the lease,, an absolute sale, and the terms presumably relate to the mode of payment. The purchaser, however, renders the consideration of terms unimportant, by offering and tendering a cash payment of the whole sum on delivery of the deed, and as the clause is to be taken as a component part of the contract, its-consideration is presumed to be found in the fact of the lease, to which, for anything that appears, it may have been an, inducement.

Whatever may have been the contract relation between the partiés, under this clause at the outset, it seems clear under the ruling of this court in Newell’s Appeal, 4 Out., 518, that the effect of the notice of 31st October, 1882, was to create a valid contract of sale, and as such the vendor could have enforced it. The vendor’s duty was to tender his conveyance in compliance with the purchaser’s request, and demand the purchase money, the payment of which he might enforce in assumpsit or by ejectment.

The payment of the purchase money and the delivery of the deed are cotemporaneous acts under the contract. If. as it is intimated, the purchaser is without means, and his design is to keep the possession without payment of rent until dispossessed, such an unfortunate condition of affairs must be accepted as the result of an improvident bargain, which the vendor was not obliged to make. The vendee, however, avers in his affidavit, not only that in the written notice, he offered to pay the entire purchase money of $8,500, upon the delivery of the deed, requesting that the necessaiy papers to secure the title should be at once prepared, but that at divers times he tendered and offered to the vendor to pay the purchase money, and demanded his deed, and the vendor at all times disregarded his tender, and refused compliance with his agreement. The mutuality of the contract is undoubted; the vendor is bound to convey the property and the vendee to pay the purchase money for it.

The relation of landlord and tenant therefore ceased, as between the parties, on the 1st November, 1882, to which time the rent was fully paid, and from that date the parties assumed the relation of vendor and vendee. It will be understood that •this cause is here determined upon the facts set forth in the •defendant’s affidavit alone, the truth of which we are bound to assume; a full disclosure of.the facts may of course radically change our views.

The affidavit of defence is adjudged sufficient, the judgment reversed and a procedendo awarded.