Shell Oil Co. v. Blumberg, 11452.

• Decision Date: 22 March 1946
• Docket Number: No. 11452.,11452.
• Citation: 154 F.2d 251
• Parties: SHELL OIL CO., Inc., v. BLUMBERG et al.
• Court: U.S. Court of Appeals — Fifth Circuit

154 F.2d 251 (1946)

SHELL OIL CO., Inc., v. BLUMBERG et al.

No. 11452.

Circuit Court of Appeals, Fifth Circuit.

March 22, 1946.

Forney Johnston, of Birmingham, Ala., and Philip M. Payne, of New York City, for appellant.

O. S. Lewis, of Dothan, Ala., Thos. B. Hill, Jr., of Montgomery, Ala., and C. R. Shannon, of Mobile, Ala., for appellees.

Before SIBLEY, HOLMES, and McCORD, Circuit Judges.

HOLMES, Circuit Judge.

This is an action (1) for a declaratory judgment construing a leasing agreement that included an option to purchase the realty leased, (2) for specific performance of the contract, and (3) to set aside a sale of the property leased. The questions raised on appeal require an interpretation of the following provisions in said lease contract:

"Lessee is hereby given an option to purchase the above described premises during the term of this lease or any renewal period, for the sum of Ten Thousand Dollars ($10,000.00). Lessee agrees, in the event it desires to exercise said option that it will give notice in writing, addressed and mailed to the last known address of Lessor, on or before thirty (30) days before said sale is to be completed; in which event Lessor agrees to convey said premises by warranty deed for the consideration above named, free and clear of any liens and encumbrances of whatsoever kind or character.

"If Lessor at any time during the term of this lease should desire to sell said property to a prospective purchaser, able, willing and ready to buy the same, Lessor shall so notify Lessee. Said notice shall give the name and address of the prospective purchaser and be accompanied by an affidavit by the Lessor that such prospective sale is bona fide, and that Lessor intends to sell and convey said property. Lessee shall thereupon have the right and option to purchase said property at the price and upon the terms offered by the prospective purchaser. Lessee agrees, in the event it desires to purchase, that it will within fifteen (15) days from the receipt of said notice signify its intention to buy said property and Lessor and Lessee will complete said sale with reasonable diligence and dispatch. Lessor to furnish abstract of title as hereinafter provided. In the event of a sale to any third party by the Lessor, and in the event such purchaser should thereafter desire to sell said property Lessee shall have the like option to purchase at the price offered by any bona fide prospective purchaser upon the same terms and conditions above set forth; it being understood that this right of the Lessee to purchase at the offered price shall be a continuing right during the existence of this lease whenever Lessor or any subsequent owner of the fee may desire to sell said property. Lessee's failure to exercise any option herein contained shall not in any way affect this lease or the rights of Lessee in the estate hereby created."

Upon taking possession of the leased premises, appellant erected a gasoline filling station thereon. On July 16, 1940, the appellee, Blumberg & Sons, submitted two separate and distinct written offers to a representative of the Bishop of Mobile, one to purchase the above realty for the sum of $20,000 cash; the other to purchase a lot on which was located a church building owned by the Bishop adjacent to and north of said leased premises, fronting 44 feet on North Oates Street, for the sum of $5,000 cash. In compliance with the terms of said lease contract, on August 7, 1940, the Bishop executed and mailed to appellant a notice of said offer on the leased premises, giving the name and address of the prospective purchaser, accompanied by an affidavit of good faith and his intention to sell, all in accordance with the provisions of the lease contract. By letter dated August 15, 1940, appellant advised the Bishop that it elected not to accept his offer to sell the leased premises, but stated that its rejection of the...