Hull v. Quanah Pipeline Corp.
| Decision Date | 15 November 1978 |
| Docket Number | No. 16042,16042 |
| Citation | 574 S.W.2d 610 |
| Parties | Mary Lee Simmons HULL et vir., Joe Hull, Appellants, v. QUANAH PIPELINE CORPORATION, Appellee. |
| Court | Texas Court of Appeals |
This suit involves an option of renewal in a lease contract. Mary Lee Simmons Hull and husband, Joe Hull, as plaintiffs, brought this suit against Quanah Pipeline Corporation, as defendant, in the District Court of Sutton County, seeking a declaratory judgment to determine whether a certain lease dated June 16, 1976, terminated one year later, or whether the lease was enforceable against the plaintiffs, as lessors, as a perpetual lease at the option of the defendant. The trial court held that the lease in question was valid and enforceable, and the instrument was construed as granting unto the defendant the right to renew the lease from year to year indefinitely or perpetually for the same consideration and under the same terms and conditions as the primary term of said lease. The trial court made extensive findings of fact and conclusions of law.
Plaintiffs' sole point of error is that the trial court erred in construing the lease in question as granting to the defendant the right of indefinite or perpetual renewal of said lease.
The lease in question covers a tract of approximately two acres of land for a primary term from June 16, 1976, to June 16, 1977. It provides for an annual rental of $200 to be paid yearly. The pertinent provisions with regard to the option to renew are set forth as follows:
It is further agreed that for and in consideration of the covenants and agreements and the payment for the initial term above set forth, the Lessee shall have and is hereby granted by the Lessors, and (sic) indefeasible option to extend such lease for an additional year and from year to year thereafter for the same consideration and under the same terms and conditions as set forth herein by Lessee paying Lessors the annual rental provided herein each year prior to the anniversary date of this lease. . . .
It is the intention that said Lessee shall have the use and benefit of said real estate so long as used for the above purposes and the annual rental is paid for the use thereof. . . .
It is further understood that upon the exercise by Lessee of the option for extension of this lease, said extension shall be upon the same terms and conditions as herein provided for the primary term of one year and no new agreement need be entered into.
In summary, appellants contend that (1) generally, an option to renew a lease at the end of the term is satisfied with only one renewal of a like term, otherwise a lease in perpetuity would be created which the law does not favor; (2) the construction of the lease by the trial court constituted a taking of plaintiffs' property without just compensation and without due course of law; and (3) the option to renew is invalid because it is not supported by any consideration. We do not regard the cases and authorities cited by plaintiffs as controlling.
The rule appears to be that while the right to perpetual renewal is not favored and there is no presumption that the parties intended to create a...
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...law and will be enforced by the courts. See, e.g., Williams v. J.M. High Co., 200 Ga. 230, 36 S.E.2d 667 (1946); Hull v. Quanah Pipeline Corp., 574 S.W.2d 610 (Tex.Civ.App.1978); R. Cunningham, W. Stoebuck, and D. Whitman, The Law of Property § 6.62 (1984). Specifically, a provision grantin......
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