# Chapman Drug Company v. Chapman > Tennessee Supreme Court · September 9, 1960 · 207 Tenn. 502 URL: https://www.frixlaw.com/law-library/cases/9770410 ## Case - **Full name:** Chapman Drug Company v. Mrs. Sue J. Chapman - **Court:** Tennessee Supreme Court - **Decided:** September 9, 1960 - **Citations:** 207 Tenn. 502; 11 McCanless 502; 341 S.W.2d 392; 1960 Tenn. LEXIS 485 - **Precedential status:** Published - **Opinion:** On rehearing - **Judges:** Tomlinson - **Cited by:** 35 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9770410 ## Opinion text On Petition To Rehear. There has been presented to us a courteous, forceful and dignified petition to rehear herein. *517 We are fully satisfied, after again reviewing the record, our opinion, briefs herein, and reading other authorities that the question now presented was fully answered in our original opinion. The petitioner says in this petition to rehear that: “Tour petitioner insists, however, that the real question for determination is whether or not the option to purchase in the lease has in fact been exercised by the lessee. ’ ’ The answer to this question is contained in the last paragraph of the lease, which is: “In order to exercise the option herein provided, the lessee shall give to lessor notice of its determination to exercise the option not more than one year nor less than ninety days prior to the termination of the lease, # * * > J The answer to this petition to rehear on the question said to have been overlooked by us is contained in the case cited by the petitioner on the petition to rehear of Lake Shore Country Club v. Brand, 339 Ill. 504 , 171 N.E. 494, 502 , in this language: “By ‘exercise of such privilege and option’ the parties plainly referred to the time of election. The right to elect under an option contract is the right to convert an option into a binding promise, and an election is the act which so converts the unilateral contract into a bilateral one. The right of the optionee to elect continues for the full period of time unless prior to its expiration he surrenders or fails to comply with the option. The right of an election in an optionee is the right to bring the parties into an agreement binding upon each. Clearly, therefore, the exercise of the privi *518 lege and option is the act which converts the option into a binding promise. The sufficiency of the election must be determined at the time of the exercise of such privilege and option and by the terms of the option contract itself. James on Option Contracts, sec. 839.” In this Lake Shore case it is true that the court held that the option had not been exercised because of previous defaults which, of course, voided the lease contract, and in voiding it the option contract was likewise voided. In the case now before us though the factual situation is entirely different from that in the Lake Shore case. For reasons expressed in the original opinion, we held that this lease contract and likewise the option contract contained therein was not breached in effect prior to the time of the exercise of the option. In Snead v. Wood, 24 Ga.App. 210 , 100 S.E. 714, 715 , 101 A.L.R. 1433 , 1439, the Georgia Court held: * * ‘the mere giving of a timely unconditional notice’ that the optionee ‘had elected to purchase the land at the price on the terms stated in the option contract’ was an exercise of an option contained in a lease which provided that the lessee should have the ‘option’ to purchase the property ‘at the expiration’ of the lease for a specified sum, * * *” The court further said: “* * # The ‘exercise’, of an option to purchase is merely the election of the optionee to purchase. The elements of the act commonly called ‘ exercising the option’ are: First, the decision of the optionee to purchase the property under the terms of the option; and, second, the communication of this decision to the op- *519 tionor within the life of the option. An election * # * involves merely the giving of notice thereof to the op-tionor.” “* * * if the option contains no stipnlation that the whole or any part of the purchase price must be so paid, and provides for notice merely, and contemplates that the price shall be paid after the act of election, when the deed is tendered, the option can be legally exercised without the payment or tender of any part of the purchase price.” The Pennsylvania Court in Atlas Portland Cement Co. v. Am. Brick & Clay Co., 280 Pa. 449 , 124 A. 650, 652 ; 101 A.L.R. 1438 , has in very unmistakable terms answered the question as posed and as is set forth by the quotation from the lease above in this language: “Acceptance in writing was the only thing necessary to make a binding contract of sale; * * *.” In United Farmers’ City Market, Inc. v. Donofrio et al., 43 Ariz. 35 , 29 P.2d 144, 147 , that court said: “Such acceptance completes the contract, exhausts the option, and estops the purchaser from subsequently repudiating it or choosing the other alternative. Castle Creek Water Co. v. Aspen, 10 Cir., 146 P. 8 , 8 Am.Cas. 600. This is equally true of a lease with option to purchase. Mon ihon v. Wakelin, 6 Ariz. 225 , 56 P. 735 ; Swanston v. Clark, 153 Cal. 300 , 95 P. 1117 .” We think that what we said in the original opinion and what we have said herein is a complete answer to the propositions as raised by the appellee herein. The result is that the petition to rehear must be denied. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9770410. Public record. Not legal advice.