Steuart v. Mcchesney

498 Pa. 45 , 444 A.2d 659 (1982)

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Nature of the Case

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Facts

Steuart (P) executed an agreement on June 8, 1968, granting McChesney (D) the first right of refusal to a parcel of improved farmland based on the market value of the property according to the assessment rolls maintained by the County of Warren. The agreement was for the lifetime of P. On July 6, 1977, the property was appraised by a broker at $50,000. P received valid offers on the property on October 10 and 13, 1977 for $35,000 and $30,000. D then sought to exercise its option on the property by tendering $7,820. This amount was exactly twice the assessed value as listed on the tax rolls because the County assessed at 50%. That tender of the option was refused. P filed an action in equity to cancel the first right of refusal or have the exercise price be that of a bona fide third party offer or fair market value independent of assessed value. D sought enforcement of the option. The trial court construed the agreement as a preemptive right to purchase the land for the $35,000, the amount of the first bona fide offer. The court reasoned that the market price was merely a mutual protective minimum price for the premises in the absence of a bona fide third party offer. The Superior court reversed holding that the agreement must be interpreted by its plain language. P appealed.