Sinclair Refining Co. v. Allbritton

Decision Date15 July 1948
Docket NumberNo. 2791.,2791.
Citation213 S.W.2d 139
PartiesSINCLAIR REFINING CO. et al. v. ALLBRITTON et ux.
CourtTexas Court of Appeals

Appeal from District Court, McLennan County; D. W. Bartlett, Judge.

Action by C. B. Allbritton and wife against Sinclair Refining Company and others of trespass to try title to leased property, wherein lessee by cross-action sought specific performance of asserted contract of purchase. From the judgment, defendants appeal.

Judgment affirmed.

Cantey, Hanger, McKnight & Johnson and Sloan Blair, all of Fort Worth, for appellants.

Scott, Wilson & Cureton, of Waco, for appellees.

HALE, Justice.

This suit hinges upon the meaning and effect of certain optional provisions contained in an extensive indenture of lease. The indenture was written by Sinclair Refining Company, was dated September 20, 1935 and was signed by C. B. Allbritton and wife as Lessors and by the Company as Lessee. It consists of twenty-three related Articles, each dealing rather minutely with an appropriate sub-heading. Under the provisions contained in Arts. I, II, III and VIII thereof, Lessors agreed in substance to erect a service station, in accordance with plans and specifications therein referred to, upon a described tract of land situated in the City of Waco and to demise and lease said premises to Lessee for a term of ten years at a rental of $80 per month.

By the provisions of Art. XIII, under the sub-heading of "Extension Option," Lessors granted to Lessee the exclusive option of extending the term of the lease for five years, "to commence, if said option is exercised, at the expiration of the term herein granted. Lessee shall give written notice to Lessors of its election to exercise this option not less than thirty (30) days before the expiration of the original term of this lease." Arts. XIV and XV, hereafter set forth in full, relate to "Purchase Option" and "Purchase Refusal," respectively. By the former, Lessors granted to Lessee the exclusive option of purchasing the demised premises at any time during the original or extended term of the lease for the sum of $12,000, "provided Lessee shall give Lessors not less than thirty (30) days' notice of Lessee's exercise of this option." By the latter, it was provided that if Lessors should receive from a third party "at any time during the term of this lease" a bona fide offer to purchase the leased premises and should decide to sell the same for the amount named in the offer, Lessors should promptly give written notice thereof to Lessee and thereupon Lessee should have the option of purchasing the premises for said price and that Lessee should notify Lessors in writing within ten days after receipt of such notice whether it would exercise such purchase option. Art. XVI relates to "Breach or Default" and provides in effect that if Lessee should default in the payment of rentals, or otherwise, and should remain in default for a period of 30 days after notice thereof, Lessors should have the right of terminating the lease and declaring the same at an end.

In due time Lessee entered into possession of the demised premises and prior to the expiration of the original term of the lease it properly exercised its option to extend the term thereof for five additional years, in accordance with the provisions of Art. XIII of the indenture. On November 13, 1946, Lessee prepared written notice to Lessors that it had elected to exercise its option to purchase the leased premises for the sum of $12,000, in accordance with the provisions of Art. XIV of the indenture. This notice was duly deposited in the United States mails at Lessee's New York office and was received by Lessors on November 21, 1946. Thereafter, on November 25, 1946, while the extended term of the lease was in full force and effect, Lessors duly deposited in the mail at Waco, written notice to Lessee that they had received a bona fide offer from one Jim Clark of Waco to purchase the premises for the sum of $17,500, that they had decided to sell the same for that amount and that they were ready and willing to convey the premises to Lessee for such amount, in accordance with the provisions contained in Art. XV of the indenture. After receiving the latter notice, Lessee notified Lessors by letter dated November 29, 1946, that it was standing upon its asserted right to purchase the property for the sum of $12,000.

On February 12, 1947, Lessors instituted this suit against Lessee and its sub-tenants as a formal action in trespass to try title to the property described in the indenture of lease, alleging as ground therefor a breach and repudiation by Lessee of the terms of the lease contract. Lessee answered with a plea of not guilty, and by cross action sought specific performance of its asserted contract of purchase and sale of the demised premises for the sum of $12,000 by reason of its alleged exercise of its option to purchase for that amount. The case was tried before the court without a jury and resulted in judgment for Lessors and against Lessee on its cross action. Lessee has appealed.

By the six points upon which its appeal is predicated, appellant says the court below erred (1) "in refusing to give effect to its purchase option as contained in Article XIV of the lease contract"; (2) "in refusing to enforce the binding executory contract for the sale of the land in dispute, which contract came into existence immediately upon the giving to appellees by appellant of notice of appellant's exercise of the purchase option"; (3) "in giving effect to the purchase refusal clause (Article XV) after there had come into existence a valid and enforceable contract for the sale of the land at $12,000.00"; (4) "in failing and refusing to construe Article XIV of the lease contract as a separate and distinct entity, apart from Article XV"; (5) "in construing Article XIV (purchase option) of the lease contract in connection with Article XV (purchase refusal) of the lease contract, so as to deprive appellant of its right to purchase the land for $12,000.00"; and (6) "in terminating appellant's lease, together with its purchase option, on the land in dispute and in holding that appellant had breached and repudiated the lease contract by reason of appellant's insistence on its right to purchase the property for $12,000.00 in accordance with its purchase option."

It is elemental that the intention of the parties to a contract controls its interpretation. Barber v. Herring, Tex.Com. App., 229 S.W. 472, pt. 3; Reconstruction Finance Corp. v. Gossett, 130 Tex. 535, 111 S.W.2d 1066, pt. 4 and authorities. In arriving at such intention, it is the duty of the courts to consider the contract as a whole and to give reasonable meaning and harmonious effect to all related provisions thereof where that can be legally done. Swisher v. Grumbles, 18 Tex. 164; Davenport v. Sparkman, Tex.Com.App., 208 S.W. 658, pt. 1; Sun Oil Co. v. Burns, 125 Tex. 549, 84 S.W.2d 442, pt. 2 and authorities; Nevels v. Harris, 129 Tex. 190, 102 S.W.2d 1046, pt. 7, 109 A.L.R. 1464; Citizens Nat. Bank v. Texas & P. R. Co., 136 Tex. 333, 150 S.W.2d 1003, 1006. As said by the court in the last case above cited: "It is not usually proper to consider a single paragraph, clause, or provision by itself, to ascertain its meaning. To the contrary, each and every part of the contract must be construed and considered with every other part, so that the effect or meaning of one part on any other part may be determined."

Arts. XIV and XV of the contract here involved are in full as follows:

"Article XIV.

"Purchase Option:

"In consideration of the premises and further considerations herein specified, Lessors hereby give and grant to Lessee the exclusive option and privilege of purchasing the demised premises and Lessors' right, title and interest in any facilities connected with said property at any time during the original or extended term of this lease for the sum of Twelve Thousand and No/100 ($12,000.00) Dollars in cash, provided Lessee shall give Lessors not less than thirty (30) days' notice of Lessee's exercise of this option. Upon Lessee's giving such notice, Lessors agree to furnish free of expense to Lessee abstract of title prepared by a competent abstractor and certified from title in the Government to the date of conveyance, showing good merchantable title to said premises vested in Lessors; and upon the payment of the purchase price herein specified, Lessors shall convey to Lessee or its nominee by general warranty deed a fee simple title in and to said premises and improvements and appurtenances thereunto belonging, free and clear of all liens, encumbrances and charges of whatsoever character, with release of dower, curtesy, homestead, and all statutory rights, and shall convey to Lessee or its nominee by bill of sale or other appropriate instrument with like covenants of warranty, all personal property embraced herein not ordinarily conveyed by deed.

"The giving of such notice by Lessee shall fix and determine the right of Lessee to purchase said premises and property and the obligation of Lessors to sell the same, and a reasonable time thereafter will be allowed Lessors to furnish abstract of title and to cure defects, if any, in said title preparatory to the delivery of the deed and other instruments of conveyance, and the payment of the purchase price. Such purchase shall serve to cancel the within lease in all particulars, and if Lessors shall have been paid rents subsequent to the date of delivery of deed, such payment shall be applied on and constitute a part of the purchase price of said properties.

"If at the time of purchase there shall be a valid mortgage, trust deed or like encumbrance against said premises, Lessee shall have the right to deduct from the purchase price and pay to the proper party the amount of the indebtedness evidenced by such instrument if such payment can then be...

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2 cases
  • Mr. W Fireworks, Inc. v. NRZ Inv. Grp., LLC
    • United States
    • Texas Court of Appeals
    • February 21, 2023
    ...is option is largely for the benefit of the optionee, it will be construed against the optionee) (citing Sinclair Ref. Co. v. Allbritton , 147 Tex. 468, 218 S.W.2d 185, 188 (1949) ); see also Primesorb, Inc. v. 95 Corp. , No. 01-98-00987-CV, 2000 WL 351416, at *5, n. 6 (Tex. App.—Houston [1......
  • Sinclair Refining Co. v. Allbritton
    • United States
    • Texas Supreme Court
    • January 19, 1949
    ...facts, respondents were successful. The judgment was affirmed by the Court of Civil Appeals, Associate Justice Tirey dissenting. 213 S.W. 2d 139. For convenience we refer hereafter to the defendant-petitioners as lessee and the plaintiff-respondents as Lessee's option derives from article X......

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