Shayeb v. Holland

• Decision Date: 06 June 1947
• Citation: 73 N.E.2d 731,321 Mass. 429
• Parties: JOHN V. SHAYEB v. MARY E. HOLLAND.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

321 Mass. 429

73 N.E.2d 731

JOHN V. SHAYEB v. MARY E. HOLLAND.

Supreme Judicial Court of Massachusetts, Suffolk.

June 6, 1947

April 9, 1947.

Present: FIELD, C.

J., QUA, DOLAN RONAN, & WILKINS, JJ.

Contract, Validity Construction, For sale of real estate, Option. Landlord and Tenant, Option to purchase. Frauds, Statute of Notice.

A provision, that "the lessee at his option shall be entitled to the privilege of purchasing the aforesaid land and buildings," contained in a lease for ten years of premises used for the purpose of furnishing amusement to the public, where the lessee also had a right under the lease to make improvements, meant that, upon notification to the lessor by the lessee that he desired to exercise the option the lessor was under an obligation to convey the premises to him, free from encumbrances, within a reasonable time thereafter upon payment of a fair and reasonable price; and specific performance of such obligation might be enforced in equity.

The statute of frauds, G. L. (Ter. Ed.) c. 259, Section 1, Fourth, was no bar to a suit for specific performance of an option "of purchasing" contained in a lease of real estate which the court construed as obligating the lessor, upon its being exercised, to convey the premises within a reasonable time upon payment of a fair and reasonable price, although the option did not state specifically either a time for performance or a price.

A notice requesting a conveyance in fourteen days was not an unreasonable or insufficient method of exercising an option to purchase real estate which did not specify the method of exercising it or a time for performance.

BILL IN EQUITY filed in the Superior Court on November 13, 1946, seeking specific performance of an alleged agreement to convey premises consisting of amusement property on Revere Beach Boulevard and Ocean Avenue in Revere, described in a lease wherein the term lessee included his assigns.

The defendant demurred to the bill on the following grounds: "(1) That the plaintiff has failed to state a cause for equitable relief; (2) that the alleged agreement is unenforceable as a matter of law and in violation of the statute of frauds, c. 259, Section 1 (4)."

The demurrer was heard and sustained by Donnelly, J., and a final decree was entered dismissing the bill. The plaintiff appealed.

J. C. Jones, (J.

T. Bowes with him,) for the plaintiff.

S. H. Rudman, (J.

Schneider with him,) for the defendant.

RONAN, J. The plaintiff, the assignee of a lease given by the defendant of a parcel of land with the buildings thereon in Revere for the period of ten years ending December 31, 1946, brings this bill in equity for the specific performance of a paragraph in the lease which provides that "the lessee at his option shall be entitled to the privilege of purchasing the aforesaid land and buildings." The lease granted to the lessee the right to sublet and to make improvements upon the premises which were used for the purpose of furnishing amusement to the public, and the bill alleges that the lessee and the plaintiff have spent large sums in the development of the property. The plaintiff notified the defendant on October 17, 1946, that he desired to exercise the option to purchase the demised premises, but the defendant has refused to convey the property to him. The plaintiff appealed from an interlocutory decree sustaining a demurrer and from a final decree dismissing the bill.

The contract upon which the bill is based is alleged to have arisen out of the acceptance of the option by the plaintiff, and the question presented is whether the contract contains all the essential elements involved in a contract for the proposed conveyance of the demised premises. A contract must be complete and definite to support a decree for specific performance, Boston & Maine Railroad v.

Babcock, 3 Cush. 228, Callanan v. Chapin, 158 Mass. 113 , Giles v. Dunbar, 181 Mass. 22 , Jamestown Portland Cement Corp. v. Bowles, 228 Mass. 176; but a contract embodying all the material factors for the accomplishment of a transaction undertaken by the parties is not incomplete or indefinite because it fails to express in terms some matters concerning the performance of the contract and reasonably necessary for the attainment of its object. In the instant case, the offer of the defendant to sell the demised premises must be interpreted to mean that, if the offer is accepted by the plaintiff, she will within a reasonable time execute and deliver a deed of the premises, free from encumbrances, upon the payment of cash within a reasonable time after the acceptance of the offer by the plaintiff. Smith v. Greene, 197 Mass. 16 . Nickerson v. Bridges, 216 Mass. 416. Pearlstein v. Novitch, 239 Mass. 228 , 230-231. Grant v. Pizzano, 264 Mass. 475, 480. Laidlaw v. Vose, 265 Mass. 500 , 504, 505. Church v. Lawyers Mortgage Investment Corp. of Boston, 315 Mass. 1 , 6.

The offer of the defendant made no reference to the price of the land. The parties never agreed upon any definite price or made any attempt to do so, and never agreed upon any specific method for fixing the price. The plaintiff contends that the option should be interpreted to mean that the defendant offered to sell at a fair and reasonable price. The interpretation of this written option is a question of law for the court. Atwood v. Boston, 310 Mass. 70 , 75. Edmund Wright Ginsberg Corp. v. C. D. Kepner Leather Co. 317 Mass. 581 , 586.

The option was a material term of the lease and may well have been one of the factors that induced the execution of the lease by the lessee, especially where, as here, the lessee was permitted to make alterations, to erect a building and to improve the premises. The parties were dealing with each other not only as lessor and lessee but also as prospective vendor and vendee. The option was for the exclusive benefit of the lessee. It could not be continued as a binding obligation of the lessor except by the performance of the terms of the lease by the lessee. It was supported by the underlying consideration of the lease. It ran with the land and enured to the benefit of the plaintiff as assignee of the lessee. Leominster Gas Light Co. v. Hillery, 197 Mass. 267 . Judkins v. Charette, 255 Mass. 76 .

It is assumed that the parties were acting in good faith in executing the lease, and that they intended to proceed in a straightforward manner in carrying out the terms of the lease, including the option to buy if the lessee should exercise it, Clark v. State Street Trust Co. 270 Mass. 140 , Kennedy Bros. Inc. v. Bird, 287 Mass. 477 , Agricultural National Bank v. Brennan, 295 Mass. 325; and it is for this reason that courts will, if reasonably possible, interpret a contract so as to make it a valid and enforceable undertaking rather than one of no force and effect. Talbot v. Rednalloh Co. 283 Mass. 225 . Mutual Paper Co. v. Hoague-Sprague Corp. 297 Mass. 294. Weiner v. Pictorial Paper Package Corp. 303 Mass. 123 . This principle of interpretation has been frequently followed in this court. Speirs v. Union Drop Forge Co. 174 Mass. 175 . Niles v. Graham, 181 Mass. 41. Letts-Parker Grocer Co. v. W. R. Marshall & Co. Inc. 232 Mass. 504 . Greene v. Boston Safe Deposit & Trust Co. 255 Mass. 519 . Beacon Oil Co. v. Perelis, 263 Mass. 288 . Palmer Electric & Manuf. Co. v. Underwriters' Laboratories, Inc. 284 Mass. 550 .

The price of a parcel of land is undoubtedly an essential element of a contract for its sale. Ansorgl v. Kane, 244 N.Y. 395. A contract leaving the price of the land to a future agreement between the parties would be indefinite and incomplete and could not be enforced. Lyman v. Robinson, 14 Allen, 242. Sibley v. Felton, 156 Mass. 273 . Woods v Matthews, 224 Mass. 577. Hampden Railroad v. Boston & Maine Railroad, 233 Mass. 411 . It is true that the option in question does not in terms provide for the determination of the price by any subsequent agreement. We think that the offer to sell in the present case should be reasonably understood to be an offer to sell for a fair and reasonable price. Otherwise, the offer would have no...