Spaulding v. Yovino-Young

SPENCE, J.

This is an action for specific performance of an option to purchase agreement contained in a written lease of certain real property. The trial court found that the option was not exercised within the time of its life and accordingly rendered judgment for defendants. Prom that judgment and an order denying a motion for a new trial, plaintiffs appeal.

The construction to be placed upon the several clauses of the lease definitive of the rights of the parties thereto is the sole issue in controversy. Plaintiffs contend that the “holdover” provision, allowing their month-to-month tenancy of the premises after the expiration of the term of the lease, operated to extend their option to purchase the property for a correlated period. Defendants object to this interpretation upon the ground that it would give an unwarranted scope to the language employed by the parties to express their under

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standing, inconsistent with, both practical and legal considerations. An analysis of the pertinent portions of the lease conforms with the trial court’s views in line with defendants’ position and its consequent decision in defendants’ favor.

The facts are simple and not in dispute. Defendants, as lessors, and plaintiffs, as lessees, executed a two-year written lease covering certain residential property in Oakland for the period commencing March 7, 1941, and ending March 6, 1943. The total rent stipulated was $840, payable in monthly installments of $35 per month on the 7th day of each and .every month. It was further provided: “Should the parties of the second part [plaintiffs herein] hold over the term herein created, such tenancy shall be from month to month only, and be on the same terms and conditions as herein stated.” The lease, in addition to being in the conventional form for the demise of real property, also contained the following option for purchase of the premises by the lessees: “It is further understood and agreed as part of the consideration for this lease, Lessors hereby give to the Lessees the option to purchase the real property herein leased for the sum of Thirty-five Hundred and Fifty ($3550.00) Dollars, in lawful money of the United States, provided, however, that said Lessees shall have paid all of the rental due up to the time of the exercise of said option; upon the execution of the necessary documents in connection therewith and the consummation of said sale, this lease shall cease and determine; said purchase price may be payable in cash, or as follows: Cash payment of Three Hundred and Fifty ($350.00) Dollars, upon which will be credited the total amount of rental paid to the date said option is exercised, after deduction, however, from said rental paid of” certain enumerated items as insurance and taxes “expended by Lessors” and “it being understood that the required monthly payments on the balance shall not exceed Thirty-five ($35.00) Dollars per month, including interest at six (6%) per cent per annum on the monthly decreasing balances.”