Appeal by plaintiff and cross-appeal by defendants from Martin, Judge. Order from which plaintiff appeals entered 26 February 1981, and judgment from which defendants appeal entered 3 March 1981, in Superior Court, Orange County. Heard in the Court of Appeals 31 March 1982.
Becton, Judge. Judge Wells and Judge Hill concur.
Plaintiff instituted this action against defendants to obtain specific performance of a fixed price option provision contained in an agreement under which plaintiff leased a certain parcel of land from defendants' predecessors in title. Defendants counterclaimed, alleging breach of the first refusal provision of the contract and seeking monetary damages. The trial court granted partial summary judgment to defendants on the issue of specific performance and, after evidence on the question of damages to defendants, granted plaintiff's motion for a directed verdict. The major issue considered on appeal involves the propriety of the trial court's grant of partial summary judgment for defendants and its denial of summary judgment for plaintiff. For the reasons set forth below, we reverse.
On 9 September 1949, plaintiff, while doing business under the corporate name of The Texas Company, entered into a lease agreement whereby Thomas R. Pendergraft and wife Inez P. Pendergraft, as lessors, demised to plaintiff certain real property located on Franklin Street in Chapel Hill, North Carolina. The ten-year lease was to commence 1 February 1950, and contained four options to renew, each for a period of five years. The lease also contained the following option to purchase:
(11) -- Option to Purchase. Lessor hereby grants to lessee the exclusive right, at lessee's option, to purchase the demised premises, free and clear of all liens and encumbrances, including leases, (which were not on the premises at the date of this lease) at any time during the term of this lease or any extension or renewal thereof,
(a) for the sum of Fifty Thousand dollars; it being understood that if any part of said premises be condemned, the amount of damages awarded to or accepted
by lessor as a result thereof shall be deducted from such price.
(b) On the same terms and at the same price as any bona fide offer for said premises received by lessor and which offer lessor desires to accept. Upon receipt of a bona fide offer, and each time any such offer is received, lessor (or his assigns) shall immediately notify lessee, in writing, of the full details of such offer, including the name and address of any offeror, whereupon lessee shall have thirty (30) days after receipt of such notice in which to elect to exercise lessee's prior right to purchase. No sale of or transfer of title to said premises shall be binding on lessee unless and until these requirements are fully complied with.
Any option herein granted shall be continuing and pre-emptive, binding on the lessor's heirs, devisees, administrators, executors, or assigns, and the failure of lessee to exercise same in any one case shall not affect lessee's right to exercise such option in other cases thereafter arising during the term of this lease or any extension or renewal thereof.
Upon receipt of lessee's notice of election to exercise any option granted herein, which notice shall be given in accordance with the Notice Clause of this lease, lessee shall have a reasonable time in which to examine title and, upon completion of such examination if title is found satisfactory, shall tender the purchase price to lessor, and lessor shall thereupon deliver to lessee a good and sufficient Warranty Deed conveying the premises to the lessee free and clear of all encumbrances (including without limiting the foregoing the rights of dower and/or curtesy). All rentals and taxes shall be prorated between grantor and grantee to the date of delivery of the aforesaid deed.
Lessee's notice of election to purchase pursuant to either of the options granted in this clause shall be sufficient if deposited in the mail addressed to lessor at or before midnight of the day on which option period expires.
The Purchase Option of $50,000.00 set out above in Clause 11 of this lease can only be ...