## Facts

- Landowners leased a 79-acre farm to tenants for three years at $100 per month and granted an option to purchase the farm for $21,000 exercisable during the lease term.
- The tenants took possession and made several thousand dollars in improvements.
- The tenants bought a pipeline milking system from the landowners and executed a $1,440.95 promissory note, which remained unpaid.
- Lacking funds to purchase the farm themselves, the tenants arranged to sell the farm to a third party for $22,000 shortly before the option expired; the plan would have paid the $21,000 option price and left the tenants $1,000.
- The third party was financially able to pay, but the landowners interfered and disclaimed any intention to sell to the tenants, causing the third party transaction to fail.
- The tenants did not formally tender $21,000; they timely notified the landowners (about two weeks before expiration) that they were exercising the option and wanted a deed.
- After the lease term, the landowners retook possession of the farm and also repossessed the milking equipment in the course of retaking the property.

## Issues

1. Whether equity should order specific performance of a written, definite land option contract rather than limiting the tenants to damages.
2. Whether the tenants made a sufficient offer of performance to exercise the option despite not formally tendering the purchase price.
3. How the decree should account for rental value during delayed performance and interest on the unpaid purchase price.
4. Whether the landowners’ repossession of the milking equipment waived their right to enforce the promissory note.

## Decision

- Specific performance was ordered on rehearing; the court reinstated the equitable remedy and rejected limiting relief to the $1,000 market differential.
- The tenants’ timely notice that they were exercising the option and requesting a deed was a sufficient offer of performance under the circumstances.
- The decree was modified to charge the landowners with the property’s rental value (for their post-lease use of land that should have transferred) and to charge the tenants interest on the unpaid purchase price (for their use of the unpaid funds).
- The landowners’ repossession of the milking equipment, incidental to retaking the farm, did not waive enforcement of the note; judgment on the note for the landowners was sustained.

## Legal Principles

- A written, definite, fair land-sale contract supported by consideration and enforceable without hardship is ordinarily specifically enforceable in equity.
- Formal tender of the purchase price may be excused where the seller repudiates or interferes such that tender would be futile; timely notice of exercise and readiness to perform can suffice.
- In specific performance, equitable accounting may include charging the seller with rental value for possession and charging the buyer interest on the unpaid purchase price to prevent windfalls.
- Waiver of a contractual right requires intentional relinquishment; repossession of property incidental to regaining possession does not, by itself, waive the right to collect on an associated note.

## Conclusion

The court enforced the land purchase option through specific performance, treating the tenants’ timely exercise notice as sufficient despite no formal tender because the sellers’ interference made tender impracticable; it also balanced the equities through rent-and-interest offsets and held that incidental repossession of equipment did not waive the sellers’ right to recover on the unpaid note.


Loveless v. Diehl, 236 Ark. 129, 364 S.W.2d 317 (Ark. 1963)