Appeal from judgment of Court of Common Pleas of Dauphin County, Sept. T., 1973, No. 215, in case of Bobali Corporation, a Pennsylvania Corporation v. Tamapa Company, a Pennsylvania Corporation.
James D. Crawford, with him Kimber E. Vought, Sanford M. Rosenbloom, and Schnader, Harrison, Segal & Lewis, for appellant.
William D. Boswell, with him Arthur Berman, and Berman and Boswell, for appellee.
Watkins, P. J., Jacobs, Hoffman, Cercone, Price, and Spaeth, JJ. (Van der Voort, J., absent). Opinion by Cercone, J.
This is an appeal by defendant, Tamapa Corporation, from a judgment entered in the Court of Common Pleas of Dauphin County. The case originated when the parties instituted an amicable action in assumpsit in order to resolve a controversy between them concerning the construction to be given a real estate instrument containing both an option to purchase at a specified price, and a first refusal option to purchase at an unspecified price, if, at some future time, it was offered by a third party. The court below entered judgment in favor of the plaintiff, Bobali Corporation, and against the defendant Tamapa Corporation. For the reasons that follow we affirm the lower court's judgment.
The material facts were stipulated by the parties and are therefore not at issue. On January 20, 1971, Bobali (formerly known as Gibson Boulevard, Inc.) and Tamapa entered into an Agreement of Sale whereby Tamapa agreed to purchase a certain tract of land from Bobali for $278,000. As part of the consideration for Tamapa entering into the Agreement of Sale, Bobali agreed to grant Tamapa an option to purchase an additional tract of land which was contiguous to the first tract. The exact terms and provisions of this option were contained in a separate Option Agreement of Sale (hereinafter Option Agreement) which was made a part of the Agreement of Sale. On April 13, 1971, settlement under the Agreement of Sale was consummated, and the previously referred to Option Agreement was executed. The Option Agreement provided Tamapa with an option to purchase the contiguous tract (hereinafter designated as the "premises") upon compliance with certain terms.*fn1 By letter
dated March 21, 1973, and in compliance with the Option Agreement, Bobali notified Tamapa that Certon Corporation had offered to purchase the premises for $393,487.50 (hereinafter the "third party offer"). In a letter dated April 12, 1973, Tamapa advised Bobali that, in accordance with the Option Agreement, it was exercising its fixed option to purchase the premises at the stated price*fn2 or if for any reason the fixed option had terminated or was not available to Tamapa, Tamapa was, in the alternative, exercising its right of first refusal, at the price of
the third party offer. By letter dated April 27, 1973, Bobali informed Tamapa that it was accepting Tamapa's exercise of its right of first refusal, but was rejecting Tamapa's exercise of the fixed option, contending that the right to exercise the fixed option terminated upon receipt of notice of the third party offer. Although Bobali agrees Tamapa is entitled to purchase the premises, there is a dispute between Bobali and Tamapa as to whether the fixed option price or the right of first refusal price is the operative purchase price.
In hopes of expeditiously resolving this dispute the parties agreed to institute an amicable action in assumpsit; and that Tamapa would deposit in escrow the difference between the fixed option price and the first refusal price (which is determined by the terms of the third party offer).
The question before us is one of interpretation. Tamapa contends that the Option Agreement provides that the fixed option price may be terminated only upon a bona fide sale of the optioned premises and, therefore, the mere bona fide third party offer [by Certon] to purchase the optioned premises did not preclude Tamapa from exercising its fixed option to purchase at the stated price. Bobali, on the other hand, contends that, under the language of the Option Agreement, upon the communication to Tamapa of a bona fide third party offer to purchase the optioned premises the fixed option price of Tamapa was superseded leaving Tamapa with only its right ...