Conford, Kilkenny and Lewis. The opinion of the court was delivered by Conford, S.j.a.d.
This is an action for specific performance, and alternatively for damages, by reason of breach by defendant of his written agreement of December 10, 1958 giving plaintiff an option to purchase a drug store business at a formula price at the end of a five-year period. By the same agreement defendant employed plaintiff as co-manager and pharmacist of the drug store for the stated five-year period at a salary of $140 per week. It is clear from the written agreement and the evidence that the employment and option stipulations were, respectively, the bargained-for considerations for each other. There was a voluntary increase to $180 in plaintiff's salary in March 1962.
The trial court found a wrongful breach of the option agreement by defendant, but determined that specific performance could not be awarded because of the problem resulting from an intervening long-term lease, not assignable without the landlord's consent, the landlord not being a party to the litigation.
It consequently awarded plaintiff damages of $24,000, but it is not clear from the oral opinion of the court whether the award rested, on the one hand, upon the difference between the stipulated payment for and fair value of the services the plaintiff rendered, or, on the other, on the difference between the stipulated purchase price and fair value of the drug store business, or both. Nor are there precise findings of fact by which the damages on either basis can be definitely estimated.
Plaintiff does not cross-appeal from the denial of specific performance.
We may summarily dispose of those aspects of defendant's appeal which challenge the determination of the court on the merits of the controversy. We have no difficulty in deciding that the parties entered into a binding option agreement and that plaintiff's unequivocal acceptance of the offer to purchase on the contract terms converted the option agreement into an enforceable bilateral agreement for sale and purchase of the property. See Friedman v. Tappan Development Corp. , 22 N.J. 523 (1956). Defendant's refusal to honor his obligation under that agreement was unjustified.
The only real problem presented is as to the proper measure of damages in such a case as this and as to whether the findings of the trial court will sustain the verdict arrived at on the basis of a proper measure of damages.
Plaintiff undertook by his proofs to lay a basis for recovery both on the theory of restitution of the value of his services over and above the salary stipulated in the contract and on that of his loss of bargain in defendant's repudiation of his agreement to transfer the drug store business to plaintiff. Respecting the former, he submitted proof that in the negotiations attending the adoption of the written agreement it was recognized that he would be working for less than such services were worth because of the incentive of the purchase option. An expert testified that fair starting compensation for the services of a manager and pharmacist in such a store as this as of the time the agreement was entered into would be $225 per week and that bonuses might be added in subsequent
years for achieving increases in business "over a given point." Such bonuses would bring plaintiff's fair compensation to about $245 weekly in the two or three years when the gross business of the store attained about $225,000.
The contract option price formula was 25% of the gross business during the year prior to the exercise of the option. At the trial it seems to have been assumed that for purposes of computing plaintiff's damages on a loss-of-bargain basis his contractual cost was about $56,000, or 25% of the $217,607 gross business for the year 1963. However, the agreement stipulated payment of the purchase price in equal monthly installments without interest over a ten-year period. At the argument both parties agreed that, in view thereof, plaintiff's cost should be estimated at the discounted present value , as of December 10, 1963, of the seller's right to receive the $56,000 amount in equal monthly installments without interest over the ensuing ten-year period. This obviously will tend to increase the plaintiff's damages on a loss-of-bargain basis.
As for the proofs of the fair market value of the business as of the option date, the trial developed the anomalous circumstance that plaintiff's expert witness arrived at a lower valuation than did defendant's, the respective figures being $60,000 and $86,000. We will not here discuss this testimony beyond saying, contrary to defendant's argument in his brief, that in our judgment the proofs in the case as a whole afford a foundation for a factual finding ...