SHELL OIL COMPANY v. Addessi, 6708.

• Decision Date: 27 June 1966
• Docket Number: No. 6708.,6708.
• Citation: 363 F.2d 101
• Parties: SHELL OIL COMPANY, Plaintiff-Appellant, v. Albert ADDESSI et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

363 F.2d 101 (1966)

SHELL OIL COMPANY, Plaintiff-Appellant, v. Albert ADDESSI et al., Defendants, Appellees.

No. 6708.

United States Court of Appeals First Circuit.

Heard June 7, 1966.

Decided June 27, 1966.

George M. Vetter, Jr., Providence, R. I., with whom Matthew W. Goring and Hinckley, Allen, Salisbury & Parsons, Providence, R. I., were on brief, for appellant.

Adolph N. Anderson, Jr., Providence, R. I., with whom Charles H. Drummey, Providence, R. I., was on brief, for appellees.

Before ALDRICH, Chief Judge, McENTEE and COFFIN, Circuit Judges.

ALDRICH, Chief Judge.

This is a diversity action brought in the district court for the District of Rhode Island for specific enforcement of a Rhode Island contract. Plaintiff, Shell Oil Company, is a Delaware corporation. The defendants, hereinafter the Addessis, husband and wife, are citizens of Rhode Island. In 1954 the parties entered into a fifteen-year lease, on Shell's standard printed form, of a gasoline filling station in Cranston, Rhode Island, Shell being the lessee. However, by a typewritten provision it was stated, "This lease shall be subject to that certain agreement between the parties hereto, dated simultaneously herewith, said agreement being hereby incorporated by reference herein." (Ital. suppl.) This agreement provided that "The Addessis may, at their option, terminate said lease at any time during the term thereof by giving Shell at least one hundred eighty days notice and paying as consideration therefor * * *." The lease, also by typewritten insertion, contained the following provision:

"9. At any time during the original term of this lease or any extension thereof or any tenancy thereafter, Shell shall have the option to purchase the premises for the sum of * * *."

On November 12, 1964 the Addessis addressed a notice to Shell, stating, inter alia, that they "do hereby give Shell Oil Company notice that we will terminate the lease on May 17, 1965, said time between November 12, 1964, and May 17, 1965, being more than the 180 days notice required * * *." (Ital. in orig.) On January 19, 1965 Shell duly purported to exercise the option to purchase. The Addessis refused, and this action followed.

Upon the foregoing facts (and certain others which reduced the issues between the parties) sufficiently appearing, Shell sought a summary judgment of specific performance, and the Addessis sought a summary judgment of dismissal. The sole question presented by both motions was whether, by a proper construction of the documents, Shell's option to purchase was in existence after receipt of the notice of November 12, 1964. The district court, stating that "a notice to terminate effectively terminates the lease when served, not when the lessee must vacate the premises," granted the Addessis' motion. This appeal followed.

We do not agree with the district court. The italicized words in the notice of November 12, supra, stated the legal situation exactly. One hundred eighty days' notice must mean advance notice. The lease did not terminate until May 17, 1965, the date specified in the notice. "If a period of notice is required, the contract remains in force and must continue to be performed according to its terms during the specified period after receipt of the notice of termination." 6 Corbin, Contracts, § 1266 (1962). Cf. Rimnik Corp. v. Wallace, 1938, 61 R.I. 282, 200 A. 765, where the court observed that a notice to quit terminated the tenancy on the date specified to quit. We cannot accept the suggestion that between November 12, 1964 and May 17, 1965, Shell was not a tenant, and that during this period it did not have all of the rights as well as obligations that were provided in the lease. During argument we asked in what ways Shell's relationship as lessee was changed, but the question received no real...