Purdy v. Carlson

MUSSELL, J.

This is an appeal by cross-complainants from portions of a judgment rendered against them in an action involving the interpretation of option clauses in two leases executed by the parties.

[527]

The record consists of a settled statement on appeal. It appears therefrom that in August, 1947, plaintiff Purdy leased two parcels of real property in Orange County to the defendants. The lease on the parcel described as the “Wilshire property” contained the following provision;

“It is further understood and agreed by and between the parties hereto that the lessee shall have the option, at any time during the first three years of this lease or during any extension thereof, to purchase said premises as hereinafter specified for lawful money of the United States; the price thereof is to be not less than Twenty Thousand Dollars, and if, at the time of the exercise of the option said real estate value is greater, Lessee shall have a first refusal to purchase said real property in the event Lessor should desire to sell the same, and in such event, Lessor shall notify Lessee in writing of the terms and conditions of any bona fide offer to purchase said real property by any third person, and thereafter for a period of ten days Lessee shall have an option to purchase said real property upon such terms and conditions. The net rent paid in excess of upkeep, interest and taxes shall be credited on purchase price.”

The lease on the second parcel, known as the “Spadra property, ’ ’ contained an option provision identical with the quoted provision in the “Wilshire property” lease except for the amount set forth therein, which was $35,000.

The trial court found that both leases had been renewed to July 31, 1953, and were in full force and effect; that a controversy existed between the parties as to the meaning of the option provisions of said leases and concluded that the said option provisions should be construed to mean that plaintiff is under no obligation whatsoever to defendants to sell said premises unless plaintiff desires to sell the same; and that in the event plaintiff desires to sell the premises, he must offer to sell the same to defendants at a price equivalent to the highest bona fide offer that he can obtain from any third party.