In this appeal from the Superior Court of Coconino County, a rather involved land transaction gives rise to a question as to the right of an assignee of a lease to exercise renewal options.
Plaintiff-appellee, Double D-W Ranch, Inc., brought a declaratory judgment action against defendant-appellant, Amelie Pouquette, seeking a declаration of the rights of the parties under a certain lease agreement. The trial court entered judgment in favor of the plaintiff declaring that a valid, subsisting and enforceable lease exists between plaintiff and defendant.
On April 1, 1955, the defendant, as lessor, entered into a written lease agreement with Kenneth B. Trapp and Arlene Trapp, as lessees, of cеrtain unimproved real property situated in Coconino County. The lease provided for an initial term of ten years, with options to renew for additional ten-year periods up to and including the year 2005, at a rental rate of $600.00 a year, payable $350.00 at the commencement of the term on April 1 and $50.00 per month thereafter. All extension periods under the leаse were at the same rental. Options to extend the lease which were conditioned on lessee not being in default, were to be exercised in writing between January 1 and March 1 of the year of termination.
The lease further provided that lessees were entitled to sell, assign, mortgage or otherwise deal with the leasehold estate, without prior consent оf the lessor, and also provided for twenty-days notice by the lessor of any default by the lessees in performing the terms of the lease, including failure to pay rentals, during which period lessees were allowed to correct the default.
On May 23, 1957, the Trapps sold and assigned their leasehold interests to Norman B. Sharber and Rayma L.‘ Sharber. On July 10, 1963, the Sharbers entered into a written аgreement with the plaintiff to sell and convey their leasehold interest in the subject property to plaintiff. This agreement provided, among other things, *281 that the Sharbers would have the right to сancel the agreement in the event plaintiff failed to make rental payments due under the lease or payments due under the agreement of sale. The agreement further рrovided that plaintiff was to cause all renewal options in the original lease agreement to be exercised.
Since the Sharbcr agreement of July 10, 1963, contained a payment schedule for the. balance of the purchase price to be paid by plaintiff to the Sharbers, the agreement was escrowed with Northern Arizona Title Company and a written assignment of the lease was delivered to the escrow agent with instructions to deliver the same to plaintiff upon payment of all sums due under the agreement. The escrow agreеment also provided that all rentals due under the original lease with defendant were to be paid to the Title Company and forwarded to the defendant. The defendant was informed оrally of the acquisition by plaintiff of Sharber’s interest in the lease. The plaintiff continued to make regular monthly payments required under the lease until March 1, 1964.
Following the March 1, 1964, date, plaintiff made periodic payments in lump sums representing several months’ rent. 'The accounting by the escrow holder caused the parties to become confused as to the exаct status of payments under the lease, although it is undisputed that during this period of confusion, defendant did not object to late payments or lump sum payments covering several months, and nеver requested that plaintiff make the exact monthly payments on the dates and in the amounts required by the original lease agreement.
During this period when confusion existed as to whether rent was current, in arrearage, or paid in advance plaintiff, on December 14, 1964, caused written notice of its intention to extend the lease for an additional ten years to bе sent to the defendant. In October, 1964, prior to the time this notice was sent, plaintiff forwarded to the defendant a check for the sum of $150. In actuality, as determined by an accounting, this $150 chеck represented rental for the extended term of the lease commencing on April 1, 1965. Although the notice of intent to exercise the option to extend the lease was rеceived by defendant prior to the January 1 date specified in the lease, no objection was made by the defendant until this action was commenced and the trial court spеcifically found that defendant was not prejudiced by the early notice. Moreover, defendant negotiated the $150 check forwarded in October, 1964, and no tender of return of this sum was mаde by the defendant until after the trial commenced in 1968.
On May 21, 1965, the plaintiff submitted to the title company a check for $300.00 to be forwarded to the defendant as rental. Because of thе confused status of the rental payments, the title company requested an additional $150.00, which request was complied with by plaintiff. These sums, less the title company’s charges were forwarded to the defendant. This payment would have placed the lease rental payments current as of July 1, 1965. On July 21, 1965, the defendant through her attorney, notified plaintiff that she was forfeiting plaintiff’s leasehold interest immediately because plaintiff was in default and could not renew, and returned the last payment received to the title company. Prior to July 21, 1965, defendant had not given plaintiff any notice of default, as required by the original lease.
Plaintiff brought this declaratory judgment action in August, 1965.
Defendant, in her brief, presents several questions for review which together question the right of plaintiff to exercise the. option to renew. She also raises several questions concerning the timeliness of payments under the lease. At time of oral argument, however, counsel for defendant agreed that the defendant, by her prior actions, had waived any requirement that payments be timely made in accordance with the terms of the lеase.
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Defendant’s primary argument is based on the proposition that since the agreement of July 10, 1963, between plaintiff and Sharbers retained in Sharber the power to forfeit plaintiff’s interest in the leased premises, plaintiff as a matter of law was not an assignee of the lease, but merely a sub-tenant who had no power to exercise options to renew in its оwn name. Cf. First Trust Co. v. Downs,
We need not, however, determine whether plaintiff was an assignee of Sharber or a sub-tenant of Sharber. If plaintiff was an assignee, it was entitled in its own right to exercise thе option to renew the original lease. Penilla v. Gerstenkorn,
Defendant next contеnds that by her receiving notice of plaintiff’s intent to renew the lease prior to the January 1st date contained in the lease for such notice, she was not bound thereby. Normally, where a lease provides that an option to renew be exercised within a certain time, failure to give notice within that time limitation relieves the lessor from the obligation of renеwing the lease. Wolf v. Tastee Freez Corp. of America,
It having been agreed in oral argument that those provisions of the lease requiring' strict compliance with payment of rentals had been waived, we need not discuss any other contentions raised by defendant.
Judgment affirmed.