American Oil Co. v. Rasar
| Decision Date | 06 December 1957 |
| Citation | 7 McCanless 37,203 Tenn. 37,308 S.W.2d 486 |
| Parties | , 203 Tenn. 37 AMERICAN OIL COMPANY v. George W. RASAR et al. |
| Court | Tennessee Supreme Court |
Cox, Epps, Powell & Weller, Johnson City, for appellants.
J. Malcolm Shull, Elizabethton, Simmonds, Bowman & Herndon, Johnson City, for appellees.
The question for determination in this lawsuit is: Did the Oil Company, as the assignee under a registered assignment from the lessee, properly exercise its rights to an option as given under the said lease contract for a renewal of said contract for the first five-year renewal period?
On March 2, 1950, one Myers and wife who were the owners of a tract of land in Carter County, Tennessee, leased this to Pan-Am Southern Corporation. On January 31, 1957, the Pan-Am Southern Corporation assigned this lease to the American Oil Company, complainant herein. On June 22, 1950, Myers and wife sold a half interest in this property to the appellees, Rasar and wife and on August 22, 1951, they sold the other half to other appellees, Rock and wife. All leases and deeds and assignments, etc., were duly recorded within a very few days after their execution.
The first lease of March 2, 1950, expired on June 30, 1957. This lease contained an option under Clause 6 thereof to the lessee to extend the same for two five-year periods, on the condition that the lessee give written notice to the lessors of their intention to extend this lease, at least 30 days prior to the expiration of the term then in force. The lease is on a printed form apparently prepared by the original lessee, the Pan-Am Southern Corporation. Of course throughout the lease the term lessor and lessee are capitalized. Clause 12 of the lease provides:
'It is further understood and agreed that all notices given under this lease shall be deemed to be properly given if delivered in writing personally, or sent by registered mail to the Lessor at the address herein shown, or to the Lessee at its principal office at 944 St. Charles Avenue in New Orleans, Louisiana. * * *'
More than 30 days before the expiration of the first term written notice was given to Myers and wife at their address shown in the lease, of the intention to extend the lease. No notice was given to any of the other parties nor is it claimed that they had notice.
Near the time when this lease expired and after time for any notice to extend it the then owners of the property, Rasar and Rock, notified the complainant that the lease would expire on June 30, 1957, and demanded that certain equipment of the lessees be removed from the property as provided in the lease. This equipment consisted of gasoline pumps, etc., and when the same was not removed the defendant lessors then went into possession. Then it was that the Oil Company filed this bill to enjoin Rasar and Rock from interfering with the property of the Oil Company on the premises. The cause was demurred to and upon the demurrers being overruled an answer was filed in which the matters in the demurrer was likewise relied on. The cause was then heard on bill and answer. The Chancellor sustained the answers and dismissed the bill. The matter was seasonably appealed, arguments heard and briefs filed and we now have the matter for determination.
The only people that were given notice of the present lessee's intention to renew the lease were Myers and wife who had some years before sold their interest to Rasar, Rock and wife. These instruments were recorded and during that period of time the original lessee had recognized them by paying the rent and complying with the terms of the lease to them as lessors.
On September 18, 1951, the then owners of the property, Rasar, Rock and wife, executed an assignment of the rentals to the Carter County Bank, Elizabethton, Tennessee, and this assignment was recognized by the then lessee Pan-Am Southern Corporation and all the rentals were thereafter paid to the bank.
On January 31, 1957, the lessee Pan-Am Southern Corporation and the complainant herein the American Oil Company entered into a written assignment of the lease whereby the Pan-Am Southern Corporation assigned all of its rights under the lease to the American Oil Company. This assignment was registered on March 11, 1957. Notice of the assignment of the lease was given by registered mail at that time to all the defendants.
When the American Oil Company gave notice of its intention to renew this lease on May 23, 1957, this intention (notice) was only addressed to Myers and wife. There was no notice given to Rasar or Rock and wife. (This is the lawsuit.) There is no question as to the form of this notice, as to contents, etc.
On September 18, 1951, (this is the same date that the assignment was made to the bank heretofore referred to) the defendants and then owners of the property, Rasar, Rock and wife, executed another instrument to the Pan-Am Southern Corporation to increase the amount of the property covered by the lease of March 2, 1950. This conveyance in its caption, which is on a multigraph form apparently prepared by the Pan-Am Southern Corporation, referred to the lease of March 2, between Myers and wife. Throughout this amended and supplemental lease is the language that Myers and wife 'appear as lessor' and then that the Pan-Am Southern Corporation 'appears as lessee'. This amended conveyance as said was between the present defendants who are the purchasers of the property from Myers and wife, to wit: Rasar, Rock and wife.
Subsequent to this lease the terms of the lease were carried out by the Pan-Am Southern Corporation with Rasar, Rock and wife on up until the question of this litigation arose, that is, the question of notice which was only given to Myers and wife who had years before sold their interest in the property to Rasar, Rock and wife. This rider or addition of additional property added to the original lease adopted all the benefits and obligations of the original lease.
The contention of the Oil Company is that since the lease provided that notice should be given to the 'Lessor' at the address as provided in the caption of the March, 1950 lease was given to these parties (Myers and wife, original lessors) that then the clause hereinbefore quoted in reference to notice of the lease has been complied with and that by giving this notice this lessee, assignee is entitled to the property under the terms of the lease for another five years.
To the contrary the obvious contention of the defendants was that both from a technical and a practical and a reasonable construction of the lease contract that notice of the lessees or lessees' assignee's intention to 'exercise its...
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