Hager v. Exxon Corp.

• Decision Date: 07 March 1978
• Docket Number: No. 13753,13753
• Citation: 241 S.E.2d 920,161 W.Va. 278
• Court: West Virginia Supreme Court
• Parties: Earl J. HAGER and Julia A. Hager v. EXXON CORPORATION.

Page 920

241 S.E.2d 920

161 W.Va. 278

Earl J. HAGER and Julia A. Hager v. EXXON CORPORATION.

No. 13753.

Supreme Court of Appeals of West Virginia.

March 7, 1978.

Syllabus by the Court

1. In an action seeking to have a lease declared null and void and to that end fraud or mistake is relied upon, such fraud or mistake must be alleged in the appropriate pleading with particularity and the failure to do so precludes the offer of proof thereof during the trial.

2. Where one enters into an agreement with another and, over a long period of time, acts pursuant to the terms thereof in a manner clearly acknowledging his acceptance of such agreement as an instrument of binding force, he will thereafter be estopped from denying the validity thereof on the ground that the other party was not authorized to execute the agreement.

Bowles, McDavid, Graff & Love, Paul N. Bowles and J. Thomas Lane, Charleston, for appellant.

David W. Knight, Princeton, for appellees.

CAPLAN, Chief Justice:

This is an appeal from a final order of the Circuit Court of Mercer County wherein that court declared a certain lease and supplements thereto null and void. Upon the refusal of the court to grant a motion for a new trial, this appeal was prosecuted.

Earl J. Hager and Julia A. Hager, his wife, plaintiffs below, are the owners of certain land in Mercer County which they have leased to the defendants, Exxon Corporation, since 1952. Exxon subleases this property to a dealer who operates an Exxon service station on the premises. On September 13, 1952 the parties entered into their original lease agreement under the terms of which the plaintiffs agreed to build a service station and Exxon's predecessor, Esso Standard Oil Company, agreed to lease said station for a period of fifteen years. This lease was cancelled by mutual agreement when, on September 12, 1953, these parties entered into a master lease, the subject of this controversy.

The 1953 lease provided for a twenty-year term with the right of the lessee, Esso Standard Oil Company, to renew as follows:

Lessee shall have the option of renewing this lease for Ten (10) additional periods of one (1) year each, the first of such periods to begin on the expiration of the original term herein granted, and each successive period to begin on the expiration of the period then in effect, upon the same terms and conditions as herein set forth and all of said privileges of renewal shall be considered has having been exercised unless Lessee gives Lessor notice in writing at least thirty (30) days prior to the expiration of the period then in effect of its intention not to exercise such renewal privilege.

On May 24, 1954, the parties entered into a supplemental agreement which amended the description of the leased premises to conform to a then recent survey. On August 20, 1958, by another supplemental agreement the rental for the leased premises was changed from $1,500.00 per year, plus one cent per gallon of gasoline sold in excess of 150,000 gallons per year, to a flat annual rental of $2,700.00. A further agreement was entered into between the parties on December 12, 1958 whereby Exxon obtained a first refusal option to purchase the land upon which the service station was situate.

Another supplemental agreement was executed by the parties by which Exxon obtained the privilege of renewing the lease for ten additional periods of one year each, in return for which Exxon agreed to erect a storage room on the premises. On August 17, 1965 these parties entered into their final supplemental agreement. Thereunder, Exxon was given the right to renew the lease for an additional ten one-year periods beginning on March 15, 1994. In consideration therefor, Exxon agreed to construct an additional service bay and assumed the responsibility of painting the building.

In each of the above supplemental agreements the parties specifically ratified and confirmed the 1953 lease, as demonstrated by the following language in the last supplemental agreement:

(S)aid original lease agreement, as heretofore supplemented and amended, is hereby confirmed and shall remain in full force and effect according to its terms and provisions.

Thus, the agreement entered into in 1953, as supplemented and ratified, provides for a twenty-year rental period from March 14, 1954 to March 15, 1974, with the right to renew for thirty additional one-year periods. Exxon has leased the premises since March 15, 1974 pursuant to its renewal options.

On August 25, 1975 the plaintiffs filed their complaint wherein they set out some of the terms of the 1953 lease and the supplemental agreements. They alleged therein that under the renewal privileges in the lease and the supplements thereto said lease was extended "to March 15, 2004, on the same terms and conditions as the original lease of September 12, 1953." It is pertinent to note, however, that the complaint acknowledges that the rental provision was amended by the supplemental agreement of August 20, 1958.

The plaintiffs further complained that the defendant had the right to cancel the lease upon written notice to the plaintiffs at least thirty days prior to the expiration of the period of the one-year renewal of its desire to cancel; also, that the plaintiffs have no right to negotiate the amount of the rents nor do they have the right under the terms of the lease to cancel as does the defendant.

In their complaint the plaintiffs quote Paragraph 15 of the lease which reads: "If Lessee holds over the premises herein described beyond the termination of the term herein created, or any extension thereof, or any renewal of this lease pursuant to the terms hereof, without having first renewed or extended this lease by written agreement, such holding over shall not be considered as a renewal or extension of this lease except on a month-to-month basis." They then allege that there have been no written agreements with reference to renewal or extension of this lease during the periods of the year-to-year renewals.

This lease has been extended on three occasions and on each occasion the extension has been by written agreement. Each supplemental agreement extending the lease contained specific provisions that, within such extension, consisting of ten one-year periods, the renewal shall be considered as having been exercised unless the lessee give notice in writing at least thirty days prior to the expiration of the period then in effect of its intention not to renew.

The plaintiffs then asked that the lease be declared null and void as unconscionable and against public policy. In the alternative, they ask that the lease be declared to be a month-to-month tenancy and that the defendant be required to vacate the property.

The defendant filed its answer and subsequently filed a motion for summary judgment. The court set this matter for trial and thereafter, on January 13, 1976, entered an order overruling the defendant's motion for summary judgment. The trial court further held in that order that: (1) the lease of September 12, 1953 was never a binding lease between the parties because it is not shown therein that the person executing the lease was authorized to act for Exxon; (2) there were never...