Sinclair Refining Co. v. Miller

• Decision Date: 19 September 1952
• Docket Number: Civ. 103-51.
• Citation: 106 F. Supp. 881
• Parties: SINCLAIR REFINING CO. v. MILLER et ux.
• Court: U.S. District Court — District of Nebraska

106 F. Supp. 881

SINCLAIR REFINING CO. v. MILLER et ux.

Civ. 103-51.

United States District Court D. Nebraska, Omaha Division.

September 19, 1952.

David R. Warner, Dakota City, Neb., for plaintiff.

Mark J. Ryan, South Sioux City, Neb., for defendants.

DONOHOE, Chief Judge.

This is an action for specific performance of an option contract for the purchase of certain real estate. Pursuant to Rule 56 (a), Federal Rules of Civil Procedure, 28 U.S.C.A., the plaintiff has moved for a summary judgment in its favor. The pleadings and certain admissions of the defendants, deemed to be admissions by reason of defendants' failure to respond to plaintiff's request for admissions (File No. 8) within the time required, Rule 36(a), Federal Rules of Civil Procedure, 28 U.S.C.A., disclose that there is no genuine issue as to any of the following material.

Facts.

The plaintiff, Sinclair Refining Company, hereinafter referred to as Sinclair, is now, and has been at all times material to this action, a corporation duly incorporated and existing under the laws of Maine. The defendants, Fred Miller and Elsie Miller, husband and wife, are now, and have been at all times material to this action, citizens of the state of Nebraska, residing at 218 West 17th Street, South Sioux City, Dakota County, Nebraska.

By a written agreement, admittedly genuine, dated February 14, 1936, defendants leased to plaintiff Sinclair the following described real estate:

"The West Sixty (W.60) feet of Lots One (1), Two (2), Three (3) and Four (4), Block Eight (8), Central Addition to the City of South Sioux City, Dakota County, Nebraska, having the approximate Dimensions of Sixty (60) by Eighty-six (86) feet",

together with certain improvements to be placed thereon by the defendants to fit the described premises for use as a gasoline filling station. The initial term of the lease was for a period of ten years to commence upon completion of the improvements. By a supplemental agreement between plaintiff and defendants, dated October 27, 1936, October 3, 1936, was fixed as the date for the beginning of the ten-year leasehold term. The lease provided for a monthly rental of $70 payable in advance.

By the terms of the lease the plaintiff was given the following extension option:

"For the considerations herein named, Lessor gives and grants to Lessee the exclusive option and privilege of extending the term of this lease for Five (5) years, beginning at the expiration of the orginal term hereof, provided Lessee shall notify Lessor of Lessee's exercise of such option not less than Thirty (30) days before the expiration of the original term. Upon the giving of such notice, this lease shall be extended, and shall continue in full force and effect, with all of the agreements, obligations, conditions, and covenants herein set forth, for and during said extended term of years; and the execution by the parties of a new lease or an instrument of any kind, extending the term of this lease in accordance with such notice, shall not be required."

On July 5, 1946, plaintiff, in the manner provided in the lease, exercised its option to extend the leasehold period for five years from October 3, 1946, to October 3, 1951.

On January 31, 1951, the defendants gave the plaintiff another option, continuing for 60 days, to lease the premises which are the subject of this suit for a period of five years beginning October 3, 1951. This option expired unexercised and the rights given thereunder have been extinguished.

By Article XIV of the lease, dated February 14, 1936, the plaintiff was given the following purchase option:

"For the considerations herein named, Lessor hereby gives and grants to Lessee the exclusive option and privilege of purchasing the leased premises, including all, if any, of Lessor's improvements and property thereon, whether real, personal or mixed, free and clear of all liens and encumbrances, for the sum of Eight Thousand and no/100ths ($8,000.00) in cash at any time during the original Ten (10) year term or during the option Five (5) year term, should Lessee exercise the option set out in the preceding Article, provided Lessee shall give Lessor not less than Thirty (30) days' notice of Lessee's election to exercise this purchase option. Upon Lessee's giving such notice, Lessor shall comply with the requirements of the second succeeding Article, entitled, `Conveyance Requirements.'"

In connection with the purchase option the lease sets forth the following conveyance requirements:

"The giving by Lessee of notice of the exercise of any purchase option hereinbefore granted, shall fix and determine the right of Lessee to purchase the property included in the option which Lessee elects to exercise, and the obligation of Lessor to sell the same. Lessor shall furnish, free of expense to Lessee, within Thirty (30) days after the receipt of said notice, a complete Abstract of Title certified from title in the Government, Title Statement, or Title Guarantee Policy prepared and issued by a financially responsible title abstract company, or a Title Certificate commonly referred to as a `Torrens Certificate of Title,' showing good merchantable title in Lessor as of a date not earlier than the date of said notice. A reasonable time will be allowed Lessee to examine such abstract or other evidence of title, and if the same does not then show good merchantable title in Lessor, a reasonable time will be allowed Lessor to cure defects and clear the title preparatory to delivery of deed and any other instruments required to effect the transfer and conveyance.

"Upon acceptance by Lessee of said title, and payment to Lessor of the purchase price herein specified, Lessor shall convey to Lessee or its nominee, by General Warranty Deed, a fee simple title in and to said real estate and the 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 also deliver to Lessee, free of expense to Lessee, such abstract or other evidence of title, showing good merchantable title to said premises in Lessor at the time of delivery of deed.

"If any personal property shall be included in the option, Lessor shall furnish evidence, satisfactory to Lessee, of Lessor's ownership thereof, and shall convey the same by Bill of Sale with full covenants of warranty.

"Such purchase shall serve to cancel the within lease in all particulars, and if Lessor shall have paid rents covering a period subsequent to date of delivery of deed, such payment shall be applied on and shall constitute a part of the purchase price of the property conveyed.

"If at the time of purchase there shall be a valid mortgage, trust deed, or like encumbrance against said premises or any part thereof, which cannot be then paid and satisfied without payment of penalty or bonus, the amount of indebtedness evidenced by such instrument shall be withheld by Lessee from the purchase price and conveyance shall be made subject to said indebtedness, Lessee assuming payment thereof."

On August 17, 1951, plaintiff transmitted by registered mail the following notice to the defendants at their residence:

"Registered Mail Return Receipt Requested "Notice of Election to Exercise Purchase Option "Fred Miller and Elsie Miller 218 West 17th Street South Sioux City, Nebraska

"You and each of you are hereby notified That the undersigned, Sinclair Refining Company, Lessee in that certain lease dated February 14, 1936, executed and delivered by you as Lessor covering the following described premises, to-wit:

"The West Sixty (W.60) feet of Lots One (1), Two (2), Three (3) and Four (4), Block Eight (8), Central Addition to the City of South Sioux City, Dakota County, Nebraska, having the approximate dimensions of Sixty (60) by Eighty-six (86) feet;

together with property of yours thereon specified in said lease which was extended by notice to you dated July 5th, 1946, has elected to exercise and does hereby exercise that certain option and privilege granted the undersigned in said lease of purchasing the above described premises and property free and clear of all liens and encumbrances for the sum and purchase price of Eight Thousand and no/100 ($8,000.00) Dollars in cash.

"You are further notified and requested To furnish to the undersigned at your expense an Abstract of Title as provided in said lease. Abstract of Title may

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