Court Opinion

ID: 9553877
Source: CourtListenerOpinion
Date Created: 2023-08-07 19:36:39.108222+00
Date Added: 2024-06-11T15:32:29.730228
License: Public Domain

ALMA WILSON, Justice,
dissenting:
The contract in question between Mr. and Mrs. Castle [designated and referred to in said instrument as “Landlords”] and Double Time, Inc., [designated and referred to in said instrument as “Tenant”] leased for a period of five years a storeroom located in a shopping center building subject to certain specified terms, conditions and provisions. The fourth provision of the contract of lease granted “Tenant” [Double Time, Inc.] a conditional option to create anew its lease agreement with “Landlords” [the Castles] upon the following covenant:
*907LEASE
THIS LEASE, made and entered into on May 18, 1978, between Charles D. Castle and Lucy A. Castle [“Landlords”] and Double Time, Inc., an Oklahoma corporation [“Tenant”];
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4. Options to .renew: Tenant [Double Time, Inc.] shall have the right, at its option, to renew this lease for an additional five year term beginning July 1, 1983, and ending June 10, 1988, and if it renews for such additional term it shall have the right, at its option, to renew this Lease for a second additional five year term beginning July 1, 1988, and ending June 30, 1993. Tenant [Double Time, Inc.] shall notify Landlords [the Castles] of its election to renew by written notice delivered to them on or before April 30 next preceding expiration of the term or renewal term thereof. All of the terms and conditions of this Lease shall apply to and bind the Landlords [the Castles] and Tenant [Double Time, Inc.] during any renewal hereof except that a new Base Rental shall be mutually agreed upon in writing by Landlords and Tenant before commencement of the renewal term, which new Base Rental shall not exceed $30,000.00 for the first renewal term and shall not exceed $37,500.00 for the second renewal term. The Base Rental for each renewal term shall be payable to Landlords in 60 equal monthly installments, commencing July 1, 1983, and July 1, 1988, respectively.
If the parties have not reached written agreement as to the new Base Rental before commencement of the renewal term Tenant may, at its option, either: (a) withdraw the exercise of its option to renew and vacate and surrender the premises as upon termination hereof or (b) pay to Landlords on the applicable first-day of July 1/60 of the maximum Base Rental fixed above, in which latter event the Lease shall without more be renewed for the whole renewal term, with Base Rental payable for the full term of such renewal. [Emphasis ours]
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“Tenant” [Double Time, Inc.] at no time ever notified “Landlords” [the Castles] that it [“Tenant”, Double Time, Inc.] elected to exercise the option to renew. In fact, “Tenant” [Double Time, Inc.] although served has made no appearance in this matter and remains at trial or on appeal in default. The record is wholly without benefit of “Tenant’s” [Double Time, Inc.] testimony or participation. Permitting a stranger to the contract, such as the Appel-lees-sublesses to claim the purely contractual rights of another is contrary to the express contractual intention in this case and works to deprive relevant parties of the benefit of their bargain. Restatement of the Law, Property 2d Landlord and Tenant, § 16.1(l)(a) reads as follows:
Obligation Created by an Express Promise — Burden of Performance After Transfer.
(1) A transferor of an interest in leased property, who immediately before the transfer is obligated, to perform an express promise contained in the lease that touches and concerns the transferred interest, continues to be obligated after the transfer if:
(a) The obligation rests on privity of contract, and he is not relieved of the obligation by the person entitled to enforce it. [Emphasis added.]
Here, I am of the opinion that the parties agreed that Double Time, Inc., and Double Time, Inc. alone, bore the obligation to notify the Castles of any intention to exercise the option to renew. Because this obligation of Double Time, Inc. is created by contractual agreement and rests solely upon privity of Contract, Double Time is not relieved of such obligation regardless of any alleged third party rights based on “privity of estate”.
Were it not true here that the parties intended to render exclusive the covenant to notify, then I could acquiese in granting the sublessee/assignee the benefit of the covenant which encumbers the reversion-ary interest of “Landlords” [the Castles]; *908however, the promise of Double Time, Inc. conditions renewal upon its notice of election. The landowner under these circumstances thus is not forced to renew a lease without the participation of the party with whom he contracted. The contract under consideration specifically provided the right of the Landlords “to look to the Tenant [Double Time, Inc.] for the performance of all the covenants to be performed”. This I believe includes the right to notification by the designated Tenant, Double Time, Inc.