Moore v. Maes

• Decision Date: 03 March 1949
• Docket Number: 16188.
• Parties: MOORE v. MAES et al.
• Court: South Carolina Supreme Court

52 S.E.2d 204

214 S.C. 274

MOORE v. MAES et al.

No. 16188.

Supreme Court of South Carolina

March 3, 1949

Shimel & Ackerman, of Charleston, for appellants.

Morris D. Rosen and C. R. Burbage, both of Charleston, for respondent.

FISHBURNE Justice.

The complaint in this case seeks specific performance of an option for the purchase of two lots located at the Northwest Corner of Carolina and Reynolds Avenues, Navy Yard, South Carolina, together with the buildings thereon, which property is described as follows:

'All that certain lot, piece, or parcel of land situate, lying and being in Chicora Place, in the County of Charleston, and State of South Carolina, being known, numbered, and designated on the plat of Chicora Place, recorded in Plat Book D, Page 197, in the R.M.C. Office of Charleston County, as Lots One (1) and Two (2) in Block A.'

The premises in question were leased by the appellant, Mon Maes to Jesse Fabian, the assignor of the plaintiff-respondent for the term of three years. The lease, which is attached to the complaint as an exhibit, provides for a tenancy commencing August 1, 1941, and ending July 31, 1944, at a rental of $125 per month, payable in advance on the first day of each month. It further provides that 'Jesse Fabian shall have the option to renew said lease for a like term, at an increase of twenty-five per cent. (25%) in the rent, upon sixty (60) days notice, prior to the termination of this agreement.'

Then in a subsequent paragraph, the option to purchase the demised premises is given to the lessee 'during the term of this agreement, for the sum of Fifteen Thousand Five Hundred ($15,500.00) Dollars.'

Jesse Fabian, the lessee, entered into possession of the premises and thereafter, in accordance with the terms of the agreement, the lease was renewed at the date of its expiration, July 31, 1944, for another term of three years; and commencing August 1, 1944, the lessee paid to the lessor the additional rental of twenty-five per cent.

On March 1, 1945, Fabian assigned all interest he had in the lease and its extended term, to the plaintiff, Ronald Moore, who went into possession of the property, paying therefor the same increased monthly rental to the lessor which had been paid by Fabian. Thereafter, on January 13, 1947, Moore gave written notice to the appellants, Mon Maes and his wife, Julia Maes, that he wished to exercise his option to purchase the property for the agreed price of $15,500, and requested that the transaction be concluded on or before January 31, 1947, before another monthly payment of rent should fall due, on February 1st. The appellants refused to comply, and this suit for specific performance promptly followed.

To clarify the situation we should state that the action was brought against Mon Maes and his wife, Julia Maes. The latter was made a party defendant under the allegation that she was co-owner (an undivided one-half interest) of the leased property with her husband, and that although she had not signed the lease, she had authorized her husband as her agent to enter into the lease and option to purchase.

The cause was referred to a special master, who found from the evidence that Julia Maes was not bound by the option; that specific performance should be required of Mon Maes as to his undivided one-half interest in the property, and recommended that the master be authorized to execute and deliver unto the plaintiff a deed therefor upon payment by him of the sum of Seven Thousand Seven Hundred and Fifty ($7,750) Dollars, this amount being one-half the contract price. Certain deductions from the above figures were recommended by the master in favor of the plaintiff to which we will hereafter refer. The findings and recommendations of the master were confirmed by the circuit court. Both the master and the circuit court held that the option to purchase contained in the original lease, was extended with the renewal of that lease for an additional three years; and that such option could be exercised not only during the original term of three years created by such lease, but also during the extension of that term.

The primary question presented by the appeal from the judgment of the lower court is: Where the original lease or agreement to lease provides for an extension of the term, at the tenant's election, is an option therein contained, to purchase the leased property, likewise extended?

The courts are not in complete agreement on this question, but the present tendency and, in our opinion, the better rule, supported by a majority of the courts, is to hold that where a lease with a right of renewal contains an option to purchase, it will be considered as an indivisible contract. Unless otherwise limited, the lessee's option may be exercised during the period of renewal or extension. Schaeffer v. Bilger, 1946, 186 Md. 1, 45, A.2d 775,

163 A.L.R. 706; 32 Am.Jur. Sec. 308, Page 285; 51 C.J.S. Landlord and Tenant, § 84, page 643; Annotations, 37 A.L.R. 1245, 39 A.L.R. 1108, 163 A.L.R. 711.

The specific point presented has never been passed upon by our court, although the case of Jackson v. Rogers, 111 S.C. 49, 96 S.E. 692, is analogous. There are, however, numerous cases from other jurisdictions which uphold the principle declared.

In Johnson v. Bates, 1940, 128 N.J.Eq. 183, 15 A.2d 642, 643, the court passed directly upon the question we have here. A lease for the term of one year contained an option agreement to purchase which provided that the option had to be exercised 'on or before the expiration' of the lease, and it also gave to the lessee the privilege to renew for four additional terms of one year each. Holding that the lease had not expired when the tenant sought to exercise the option to purchase during the renewed term, the court, speaking of renewal leases, said:

'In such case, if the lessee were to avail itself of the renewals provided for by the express terms of the lease, the lease could not be said to have ceased to exist at the end of the first year; on the contrary, the life of the lease would, in those circumstances, continue and extend for additional periods of one year each, at the election of the lessee, until the privilege of renewal were exhausted or forfeited.'

The question whether the renewal of a lease also renewed the option to purchase contained in the original lease agreement was likewise answered in the affirmative in Volunteers of America v. Spring, 1927, 27 Ohio App. 229, 161 N.E. 215, where the original lease provided that it 'may be renewed for another term of 5 years * * *, all other conditions to be the same,' the court saying that this language was broad enough to include the option to purchase.

Another well considered case, announcing the same rule, is that of Schaeffer v. Bilger, 1946, 186 Md. 1, 45 A.2d 775, 163 A.L.R. 706. To the same effect is Rubin v. Gochrach, 186 Va. 786, 44 S.E.2d 1; First-Citizens Bank & Trust Co. v. Frazelle, 226 N.C. 724, 40 S.E.2d 367; Meadow Heights Country Club v. Hinckley, 229 Mich. 291, 201 N.W. 190.

We think under the terms of the lease entered into between the lessor and lessee, that the option to purchase contained in the original lease continued during the extended term and could be exercised as a matter of right at the election of the respondent, who is the assignee of...