Jamson v. Poulos

• Decision Date: 06 June 1969
• Docket Number: No. 37191,37191
• Citation: 184 Neb. 480,168 N.W.2d 526
• Parties: Nick JAMSON, Appellant, v. John POULOS and Amorfia Poulos, husband and wife, et al., Appellees.
• Court: Nebraska Supreme Court

Page 526

168 N.W.2d 526

184 Neb. 480

Nick JAMSON, Appellant, v. John POULOS and Amorfia Poulos, husband and wife, et al., Appellees.

No. 37191.

Supreme Court of Nebraska.

June 6, 1969.

Syllabus by the Court

1. A provision in a lease granting the lessee an option to purchase the property during the term is supported by the consideration paid for the lease and cannot without the consent of the lessee be revoked during the period granted for its exercise.

2. Where a lease of real property contains an agreement giving the lessee the privilege of purchasing the property covered by the lease which is not specifically restricted to the lessee, such covenant runs with the land and the option to purchase passes upon assignment of the lease to the assignee thereof.

3. Covenants in a lease against assignment or underletting are not favorably regarded by the courts and are liberally construed in favor of the lessee.

4. An option to purchase real estate contained in a lease agreement is not terminated by the death of the lessee during the term and before the exercise of the option, in the absence of express limitation.

5. Where the rights of an assignee of a lease have been recognized by a lessor notwithstanding prohibition against assignment of the lease, and no forfeiture of the lease for the lessee's breach of covenant or condition has been declared during the term thereof, the assignee may exercise the option given the lessee by the lease to purchase the leased property.

Cunningham & Blackburn, Grand Island, for appellant.

Higgins, Higgins & Huber, Grand Island, Madgett & Hunter, Hastings, for appellees.

Heard before WHITE, C.J., and CARTER, SPENCER, BOSLAUGH, SMITH, McCOWN, and NEWTON, JJ.

SPENCER, Justice.

This is an action for specific performance of a contract with option to purchase real estate. The matter was tried on a stipulation of facts. The trial court dismissed plaintiff's petition and he perfected an appeal to this court.

On August 22, 1959, John Poulos and Amorfia Poulos were the joint owners of the following described real estate: The north 22 feet of the south 64 feet of Lot 1, Block 56, Original Town, now City of Grand Island, Hall County, Nebraska, upon which was situated a two-story brick building, the ground floor of which had been used for business and commercial purposes and the upstairs floor of which was unimproved and vacant. On that day, the Pouloses entered into an agreement with Karl A. Rasmussen who was the owner of adjoining property upon which was situated the Koehler Hotel and Tavern, leasing to him the following described property: 'The second floor of the building situated on the North Twenty-two (22) Feet of the South Sixty-four (64) Feet of Lot One (1), Block Fifty-six (56), Original Town, Grand Island, Hall County, Nebraska,' for a term of 10 years for the sum of $360 per year, payable in advance. Said lease contained the following provision: 'Second party must furnish heat and water and is given the right to install a door or passageway between the leased property and the property owned by second party immediately adjoining to the North and to make such repairs and improvements desired all at his own expense. Second party agrees, at the end of the lease, to close the passageway and fix the door as it was originally, providing second party has not bought the above described real estate. Second party is given the option of purchasing, at any time during the term of the lease, the above described real estate for $22,000.00 and to give first parties notice, in writing, of his intention to purchase. In case the Second Party accepts his option to purchase, then the taxes and rents will be pro rated to the date of sale.'

Karl A. Rasmussen went into immediate possession of the second floor of said building, installed a doorway between the leased property and the Koehler Hotel property, and made expensive and permanent improvements to the leased premises. Rasmussen died December 31, 1959, and by the terms of his last will and testament and by assignment of his heirs, the Koehler Hotel property and the leased premises were assigned to his son, Harold B. Rasmussen.

On October 7, 1961, Harold B. Rasmussen sold and conveyed the Koehler Hotel property and assigned his interest in the lease agreement to the plaintiff herein, who took possession of said premises and made further repairs and improvements thereon. The Pouloses did not at any time give consent in writing to any of the assignments. However, the assignments were made with their knowledge, and defendants accepted rental payments from the assignees.

The lease in question is on a Huffman form which contains the following printed provision: '* * * that he will not sell, assign, underlet or relinquish said premises without the written consent of the lessor, under penalty of forfeiture of all his rights under this lease, at the election of the parties of the first part * * *.'

Defendants admit that because of their acceptance of the rent payments there is a valid lease in effect for the balance of the term of the original lease, but contend that the option was personal to Karl A. Rasmussen and terminated at his death in the absence of a further agreement with the Pouloses. On July 3, 1962, the defendants Poulos conveyed the property to their daughter, Antonia J. Poulos, now Antonia J. Poulos Giallourakis, who is the present record holder of...