Appeal, No. 224, Jan. T., 1962, from decree of Court of Common Pleas of Centre County, June T., 1960, No. 2, in case of Young Men's Christian Association v. Thomas C. Harbeson. Decree affirmed.
Lillian Raycroft, for appellant.
Roy Wilkinson, Jr., with him Harry Thatcher, and Love and Wilkinson, for appellee.
Before Bell, C.j., Musmanno, Jones, Cohen, Eagen and O'brien, JJ.
OPINION BY MR. JUSTICE MUSMANNO
The Young Men's Christian Association, a nonprofit corporation, located in Chester, filed a complaint in equity in the Court of Common Pleas of Centre County, against Thomas C. Harbeson, the defendant, seeking specific performance of an option to purchase certain property, as specified in a lease agreement between the parties. The defendant resisted performance on the basis that the option clause had not been properly renewed in a succeeding term of the lease; also, that the plaintiff was in default in rent. The court held that, despite the plaintiff's default in certain respects, its holding over after termination of the lease constituted a renewal of it but that the renewal did not include the right to purchase the property. The complaint was dismissed and the plaintiff appealed.
The facts follow. Thomas C. Harbeson is the owner of 225 acres of land in Potter Township, Centre County. On August 10, 1945, he and the Y.M.C.A. of Chester entered into a written lease for a five-year term with
the provision that the lessee had the privilege to renew for two extra five-year terms provided it gave notice to the lessor of such intention 90 days prior to the expiration of the term involved. The lease further stipulated that the Y.M.C.A. had the option to purchase the property for $6500 at the end of the last additional term, upon giving 30-day notice.
The agreement was properly renewed for the term from May 15, 1949 to May 14, 1954 but the lessee failed at the end of that term to renew as prescribed by the lease. Instead, on February 18, 1954, four days subsequent to the last day for serving the 90-day notice of renewal, the lessee wrote the lessor: "We would appreciate it very much if you would advise whether or not you would agree to a renewal of the lease for an additional five year term with the same rights, privileges and conditions and options to purchase as contained in the present lease."
The defendant replied on February 22, 1954: "As I read our lease agreement dated Aug. 10, 1945: The original 5 year period of the lease expired May 15, 1949. The first 5 year renewal expired May 15, 1954. The second and final 5 year renewal period ends May 15, 1959. If the above is the correct interpretation, your lease does not expire or terminate until May 15, 1959 ..."
However, the lessor indicated very clearly in that communication that he was dissatisfied with the announced purchase price: "... I must say that with the inflation we have had since this lease went into effect on August 10, 1945, I could not afford to sell the property as it now is for that amount ... Therefore, in view of the foregoing, to protect all our interests a re-negotiation would seem desirable at some time prior to May 15, 1959. However, for my ...