Leisure Sports Inv. Corp. v. Riverside Enterprises, Inc.

• Decision Date: 02 May 1979
• Citation: 7 Mass.App.Ct. 489,388 N.E.2d 719
• Parties: LEISURE SPORTS INVESTMENT CORPORATION v. RIVERSIDE ENTERPRISES, INC.
• Court: Appeals Court of Massachusetts

Page 719

388 N.E.2d 719

7 Mass.App.Ct. 489

LEISURE SPORTS INVESTMENT CORPORATION v.RIVERSIDE ENTERPRISES, INC.

Appeals Court of Massachusetts, Middlesex.

Argued March 13, 1979.

Decided May 2, 1979.

Bernard P. Rome, Boston (Alice M. Vogler, Boston, with him), for defendant.

Raymond J. Brassard, Boston (Stuart T. Freeland, Boston, with him), for plaintiff.

Before HALE, C. J., and ROSE and PERRETTA, JJ.

HALE, Chief Justice.

This is an appeal by the lessor, Riverside Enterprises, Inc.(Riverside), from a summary judgment ordering specific performance of an agreement to convey the leased premises to its lessee, Leisure Sports Investment Corp.(Leisure).On January 5, 1974, Riverside and Leisure entered into a five and one-half year lease which contained an option to purchase the premises and personal property located thereon.The option clause, set out in pertinent part in the margin, ¹ provided for exercise of the option during the term of the lease but not later than May 30, 1979.At the time the lease was executed and delivered, Leisure paid a sum in cash and delivered to Riverside two notes as rent.²The option clause provided that the cash payment and any payments on the notes would be credited against the purchase price if the option should be exercised.

On October 18, 1974, Leisure filed a voluntary petition under Chapter XI of the Bankruptcy Act, 11 U.S.C. §§ 701 et seq.(1976), for an arrangement of its affairs.The plan of arrangement was approved, Leisure was discharged from its unsecured debts (which included the two notes), and the holders of the notes were paid small dividends on their claims in full settlement.On February 12, 1975, the Bankruptcy Court determined that the lease was in full force and effect.³

More than two years later, on April 28, 1977, Riverside sent Leisure notice that the "lease is terminated effective 14 days from receipt of this notice," giving as grounds nonpayment of the two notes and the filing of the Chapter XI petition.On May 3, 1977, Leisure sent Riverside notice of the exercise of its option to purchase.Leisure subsequently notified Riverside and the holders of the notes that, in connection with the exercise of the option, Leisure would pay the two notes in full with interest.

On June 2, 1977, Leisure tendered performance and offered to pay off the notes.Riverside refused to convey the property, and Leisure brought the present action.The ensuing judgment for specific performance is the subject of this appeal.⁴

1.The ruling that the lease had not been terminated at the time Leisure exercised the option was correct.The default clause, set out in full in the margin, ⁵ requires the lessor to give written notice of termination and the effective date thereof before the lease shall expire.In its notice of termination of April 28, 1977, Riverside expressly set the termination of the lease "14 days from the receipt of this notice."Notice by Leisure of exercise of the option was given before expiration of the fourteen days and thus before the termination of the lease.Atlantic Richfield Co. v. Couture, 4 Mass.App. 230, 234, 344 N.E.2d 917(1976).

2.Also correct was the ruling that Leisure's right to exercise the option was not lost because of a breach of the lease provisions by nonpayment of the notes and by filing the Chapter XI petition.⁶That we assume, without deciding, that Leisure was in breach of the lease, ⁷ does not compel the conclusion that the judge erred in awarding specific performance.Atlantic Richfield Co. v. Couture, 4 Mass.App. at 233-234, 344 N.E.2d 917.But seeGannett v. Albree, 103 Mass. 372, 374-375(1869);Squire v. Learned, 196 Mass. 134, 136, 81 N.E. 880(1907);Saxeney v. Panis, 239 Mass. 207, 209, 131 N.E. 331(1921), each of which involved suits for specific performance of covenants to renew.There was no express condition in the lease that the lessee not be in default of any of the lease provisions in order to exercise its option.CompareDerman Rug Co. v. Ruderman, 4 Mass.App. 437, 440, 350 N.E.2d 727(1976).Riverside contends, however, that compliance with the lease provisions was an implied condition that attached to the exercise of the option.Written agreements are presumed to express the parties' final arrangements (seeFinnerty v. Reed, 2 Mass.App. 846, 847, 312 N.E.2d 578(1974)), and an omission of a term in a written lease is evidence that there was no such understanding.Snider v. Deban, 249 Mass. 59, 65, 144 N.E. 69(1924).Stop & Shop, Inc. v. Ganem, 347 Mass. 697, 701, 200 N.E.2d 248(1964).The judge, in declining to read into the lease an implied condition such as that contended for by Riverside, was justified in considering, as he did, not only the language used but the purpose for the lease provisions.SeeConnolly v. Haines-Ce Brook Inc., 277 Mass. 423, 427, 178 N.E. 650(1931).We find no error in his refusal to read the implied condition into the lease by implication where the implication is less than "clear and undoubted."Stop & Shop, Inc. v. Ganem, 347 Mass. at 701, 200 N.E.2d 248, and cases cited.

Specific performance is a matter within the sound discretion of the judge.Raynor v. Russell, 353 Mass. 366, 367, 231 N.E.2d 563(1967).Kaplan v. Bessette, 357 Mass. 233, 235, 257 N.E.2d 926(1970)."It ought not to be granted if it will result in imposing an undue hardship upon one party to an agreement or permit the other party to obtain an inequitable advantage.On the other hand, agreements are made to be performed, and relief should be given in the absence of special circumstances showing that it would be inequitable to do so."Freedman v. Walsh, 331 Mass. 401, 406, 119 N.E.2d 419, 423(1954).The record before us does not reveal such special circumstances as would make it unjust or inequitable for the judge to award specific performance in this case.Riverside received everything it bargained for under the option agreement.

3.The judge was also correct in ruling that the option was properly exercised and that a proper tender of the purchase price and accompanying documents was made on June 2, 1977.SeeAmerican Oil Co. v. Cherubini, 351 Mass. 581, 585, 222 N.E.2d 892(1967);Hurd v. Cormier, 358...