Opinion
Decided July 20, 1927.
Landlord and tenant — Option to purchase included in extension of lease, when — Irregular execution validated by recital or confirmation in subsequent valid instruments — Option not invalid, where possession taken and option recited in subsequent deeds — Both building and ground included by construing lease and option.
1. An option to purchase contained in a written lease is included in an extension of the lease which provides therefor, together "with all other conditions" of the lease.
2. Where an option for the sale of the real estate is contained in a written lease, the fact that the lease containing the option of purchase is not attested or acknowledged does not render the option to purchase invalid, where the purchaser takes possession under the lease, and where the option to purchase is recited, in substance, in subsequent deeds.
3. An option to purchase should be construed with reference to the lease and the plat referred to therein.
APPEAL: Court of Appeals for Franklin county.
Mr. Charles J. Pretzman, Mr. W.B. McLeskey, and Mr. Campbell M. Voorhees, for plaintiff.
Mr. Chapin B. Beem and Mr. William McE. Weldon, for defendants Spring and Acker.
Mr. L.F. Sater, Mrs. Dora S. Bachman, and Mr. James M. Schooler, for defendant Columbus Federation of Women's Clubs.
This is an action for specific performance of an option to purchase, contained in a lease. The lease was executed by Christian F. Jaeger to the plaintiff, and was dated December 7, 1914. The lease was for a period of five years and renewable at the expiration of said term by written notice provided for in the lease. The purchase option is as follows:
"Said party shall have the privilege of purchasing the above-described premises [see plat attached] for the sum of $32,500. This lease may be renewed for another term of five years at a monthly rental of $240, all other conditions to be the same provided notice of such desire to renew is given in writing at least six months before the expiration of this lease."
The written notice required to renew the lease was given by the lessees to Edward C. Turner, who was then the owner of the premises by conveyance from Jaeger. The plaintiffs within the period of the term of the lease as renewed took the necessary steps to exercise the option of purchase, and duly tendered the purchase price as provided for in said option. Edward C. Turner, who held the legal title to the property by conveyance from Jaeger, reconveyed to Jaeger; Jaeger, on February 10, 1920, conveyed the premises to Fred S. Spring and H. Wirt Acker; and on November 14, 1923, Spring and Acker conveyed a part of the premises to the Columbus Federation of Women's Clubs. The original lease contained the following description of the leased premises:
"That the first party hereby leases unto said second party the premises situated in the city of Columbus, county of Franklin, and state of Ohio, known and described as follows, to wit:
"`Being all the buildings located on inlot No. 113 and barn on rear of inlot No. 112 except a storeroom known as 129 South Front street; the above premises are also known as No. 131 1/2, 133, 135 South Front street, and 138 South Scioto street."
The plat referred to in the option clause was produced on the trial and contains a draft of the property referred to in the lease and the option of purchase. This plat was not physically attached to the lease at the time of its execution and delivery, or at the time of the record thereof. There is, however, no doubt of the identity of the plat, and that it was handed over contemporaneously with the lease by Mr. Jaeger to Major Collins, the representative of the plaintiff.
The title deed from Jaeger to Spring and Acker contains the following clause:
"Except all leases and options of purchase now outstanding for all or any part of said real estate, all taxes and assessments now a lien thereon, and not now due and payable, a mortgage for $10,000 executed by said grantors to the Buckeye State Building Loan Company, with interest from its date, and a mortgage in the sum of $15,000 executed by said grantors to the Reading Trust Company, with interest from the 9th day of February, 1920, all of which said grantees hereby assume as a part of the purchase price of said real estate."
It is also admitted in the pleadings that the defendants had actual knowledge of the existence of said written lease from Jaeger to the plaintiff, and of the contents thereof. The deed from Edward C. Turner reconveying the property to Jaeger contained the following recital:
"Except the option given by Christian F. Jaeger to the Volunteers of America, and except taxes and assessments payable after the June, 1924, collection all of which grantee hereby assumes."
In the conveyance from Spring and Acker of a portion of the premises to the Columbus Federation of Women's Clubs the following recital appears:
"This deed is also executed, delivered, and accepted subject to all leases on said premises expiring not later than January 1, 1925, and including the lease to the Volunteers of America executed December 7, 1914, and recorded in Lease Record 31, page 329, Recorder's office, Franklin county."
It also appears that the representatives of the Columbus Federation of Women's Clubs had actual notice at the time of the purchase of substantially all the facts in connection with the plaintiff's option to purchase.
The right of the plaintiff to enforce the option of purchase is resisted by Spring and Acker and also by the Columbus Federation of Women's Clubs. The counsel representing the defendants insist that the plaintiff has failed to show any valid contract or legal right to enforce the option contract. It is claimed that the lease only involved the building, and not the real estate itself. We think this claim is without foundation. While the lease itself, in the descriptive clause, refers to the buildings, and also to the premises and the house numbers, yet in the purchase option reference is made to a plat, which, with the aid of the lease, sufficiently identifies the property to be purchased. The plat, although not physically attached, may, by virtue of the recital, be considered for the purpose of description and to identify the property. In addition, it is undisputed that the plaintiff took possession, as lessee, not only of the building, but of the entire premises. This shows a contemporaneous construction by the parties themselves of the scope of the lease. It would be unreasonable, we think, to hold that the parties contemplated the sale of the buildings only for the amount stipulated in the option contract. It is clear, in our judgment, that the parties by the option contract intended to include the real estate as well as the buildings.
Again it is contended by counsel for the defendants that the lease, not being acknowledged, was valid only from year to year, and did not constitute a valid lease for five years, and did not entitle the lessees to a renewal.
In the state of the present case we are not required to express an opinion upon the abstract question of the validity of an unacknowledged written lease for five years. The unacknowledged written lease in the instant case is fortified by the lessee's undisputed possession under the lease, and by repeated recitals in the title deeds, properly executed, acknowledged, and recorded. Jaeger, the lessor, in his deed to Spring and Acker, defendants, solemnly recited the lease and option to purchase upon which the plaintiff relies. Turner, in reconveying the property to Jaeger, made the same recital in his duly executed deed. Both in reason and authority it is clear that an irregular instrument may be validated by a recital or confirmation in a subsequent duly executed instrument. By the recitals referred to the irregular lease and option to purchase became valid as against the lessor and his grantees. How can Spring and Acker take advantage of the irregularity in the execution of the lease when their own title deed contains confirmation thereof? The Columbus Federation of Women's Clubs in their own immediate title deed from Spring and Acker merely accepted the lease to the plaintiff, but nevertheless they are bound by the recitals recognizing the validity of the lease in their chain of title. We therefore hold that the lease to the plaintiff was valid as against the defendants, and that the option of purchase is also valid so far as the form of the lease is concerned.
There is some complaint made as to the validity of the extension of the lease, but we are of the opinion that, by the giving by plaintiff of the notice required in the lease, the original lease is automatically extended. Another question, and the one perhaps most seriously contested by counsel for defendants, is whether the renewal of the lease also renewed the option to purchase. Counsel for defendants contend that the option to purchase died with the original lease and was not subject to renewal. Authorities from outside of the state are cited to that effect, and counsel for plaintiff cite the case of Gross v. Clauss, 6 Ohio App. 140, to the effect that the renewal of the lease renews also the option. In the instant case, however, the language of the lease as to renewal, "all other conditions to be the same," is more specific. This is broad enough in our judgment to include the option to purchase. We are strengthened in this construction by the adopted construction of the parties to the instrument. Turner, who conveyed subsequent to the expiration of the first five-year term, recognized in his deed the existence of the option to purchase, as did Jaeger, the original lessor, in his deed to Spring and Acker, who likewise conveyed after the first five-year term had expired. Whether these recitals would constitute a renewal of the option to purchase we do not decide, but we are clear that they constitute evidence which this court may consider as to the reasonable interpretation of the renewal clause.
We therefore reach the conclusion that the plaintiff is entitled to a decree for specific performance in the premises described in the amended petition as against all of the defendants.
Decree accordingly.
FERNEDING and KUNKLE, JJ., concur.