Clapp, Jayne and Francis. The opinion of the court was delivered by Francis, J.A.D.
The Chancery Division declined to compel the defendant, Cortlandt Investors, Inc., to convey certain premises to the plaintiff, Julius Sand, trading as Scotty's Truck Terminal, pursuant to an option contained in a lease. Sand appeals.
The defendant, London & Company, Inc., owned a tract of land fronting on Woodruff Lane, Elizabeth, New Jersey. On August 1, 1950 it leased a portion thereof (described by metes and bounds) to plaintiff for a term of five years ending July 31, 1955. Provision was made for automatic renewal thereafter on a year-to-year basis subject to the right of either party to terminate on 90 days' notice prior to the expiration of any annual period.
The lease contained the following first refusal option to purchase:
"20. If at any time during the existence of this lease or any extension or renewal thereof, the landlord shall receive an offer for the sale of the particular lands demised herein to the tenant named herein, and as above described, and as appears on the sketch annexed hereto, the landlord agrees not to accept such offer or make any contract
of sale thereof, without first giving the tenant named herein an option to acquire and purchase said lands upon the same terms and conditions contained in such offer of purchase.
21. The landlord agrees to give the tenant notice in writing by registered mail of the terms and conditions of such offer, and if the tenant fails to enter into a bona fide contract upon the same terms and conditions as those proposed to the landlord by the prospective purchaser of said lands, within 10 days after the receipt of such registered notice, then the landlord shall have the right, and shall be at liberty to make a contract for the sale of said lands and may thereupon give notice of the termination of this lease to the tenant, as provided for herein."
On July 23, 1951 the lessor notified Sand that an offer had been received to buy a portion of the demised premises 100 feet by the full depth of the lot, approximately 370 feet. (The frontage of the leased premises was 125 feet.) The price proposed was 50 cents per square foot. Additional information was furnished also that the prospective purchaser was to have an option to buy the remaining easterly parcel of 100 foot frontage, within three years, at 55 cents a square foot. The name of the offeror was not given.
Plaintiff engaged counsel who looked into the matter and ascertained that no lower price would be entertained. Consequently he did not exercise the option to acquire ownership.
Thereafter, on October 30, 1951 London & Company, Inc., notified Sand that its property, including the demised land, had been sold to Cortlandt Investors, Inc., and that subsequently accruing rents should be paid to the new owner. Cortlandt Investors, Inc. sent a similar notice. The deed is dated October 24, 1951 and was recorded on the same day. Plaintiff was not advised that Cortlandt was not the prospective purchaser referred to in the July 23 notice. Attornment was made to the new owner and thereafter rent paid to it.
In July 1954 Cortlandt exercised the termination provision of the lease. Plaintiff then caused an examination to be made of the records and discovered that the deed bore revenue stamps indicating a purchase price of approximately 20.09 ...