The within appeal is from a summary judgment entered in favor of Appellee Bank as Administrator with Will Annexed of the Estate of George Whittell, Jr.
The case involves a suit by Zephyr Cove Lodge, Inc., a corporation, the as-signee of the lessee Gene F. Empey, who is the sole stockholder and president of Zephyr Cove Lodge, Inc., against George Whittell, Jr., lessor, on the jurisdictional basis as provided in Title 28, United States Code § 1332. The issues presented center on the provisions of paragraph 4 of the lease, namely:
“4. The Lessees agree that in the event the Lessor makes a bona fide sale of Zephyr Cove Beach at any time during the term of this lease, the Lessor shall then have the right to cancel this lease without penalty on six (6) months’ notice in writing to the Lessees, but in such case the Lessor shall remunerate the Lessees for the unam-ortized cost of improvements which the Lessees have made on the premises, evidenced by receipted bills. In the event the Lessor does have a bona fide offer of sale, the Lessees will be given the first opportunity to purchase at the same terms and conditions of said offer.”
Leases on the Zephyr Cove property in which Empey, with others, had been lessees, contained the same provisions.
The property leased was known as the Zephyr Cove Beach, a resort consisting of 196.4 acres in Nevada with approximately 1400 feet of shoreline on Lake Tahoe. The lease was not recorded. This tract was a part of some 24,000 acres of Nevada land owned by Whittell which was the subject of the sale negotiations involved herein. The Zephyr Cove lease, executed on October 16, 1958, was between Whittell, as lessor, and Robert L. McDonald and Empey, as lessees. It was for the term January 1, 1959, to December 31, 1964. McDonald assigned his interest in the lease to Em-pey on June 2, 1959.
It is the position of the appellant, as stated by Empey, that it was the obligation of the lessor, under the provisions of paragraph 4 of the lease, to notify the lessee of any offer, if the lessor felt the price was satisfactory although the lessor also felt that a particular term or condition should be changed, and to give a right of first refusal at that price, or any adjusted price that the lessor considered satisfactory. The appellee contends that the lessor must propose to sell the property and terminate the lease to actuate the right of first refusal.
The crux of the case is whether the sentence calling for the right of first refusal is to be interpreted as an independent, free-floating provision unaffected by the first sentence of paragraph 4 of the lease, which concerned cancellation thereof on six months notice in case of a bona fide sale of Zephyr Cove Beach.
Mr. John S. Lewis, Jr., a real estate operator representing Whittell, opened negotiations in late October, 1962, with Joseph I. O’Neill, Jr., through a real estate broker, Charles G. Johnston, for the sale of the 24,000 acres of Whittell’s Nevada property.
There was some misunderstanding on the part of Johnston as to when the Zephyr Cove lease terminated under the provisions thereof. He first advised O’Neill that it expired in 1962 and, as late as May 28, 1963, he stated that Whittell had guaranteed there was no *1123lease on any of the properties that extended beyond 1963.
On June 3, 1963, Whittell and O’Neill signed an option agreement which gave O’Neill the option of purchasing the property in some fifteen parcels as detailed in the agreement. The option provided, among other things, that there was no lease on any of the properties “ * * covered by this option and agreement to purchase * * * ” beyond December, 1963, “ * * * excluding Zephyr Cove lease which runs to December 31, 1964.” This option authorized the purchase of the property in fifteen parcels within one year from notice of exercise of the option, or over a period of four years following notice by O’Neill to the bank of exercise of the option, which he was required to do within 180 days from June 3rd, the date thereof, all as detailed in paragraphs B1 and 2 of the agreement. The Zephyr Cove property was parcel No. 14 as listed in the option.
On June 6, 1963, newspapers in Nevada and California carried announcements of O’Neill having contracted to buy Whittell’s Tahoe land. Lewis, Sr., Whittell’s lawyer, in his deposition taken July 1-2, 1969, said that he learned on or about June 6, 1963, of the first refusal clause in the Zephyr Cove lease and a letter dated June 17, 1963, from Johnston to O’Neill, received by O’Neill on June 18th, clearly indicated that they knew of the lease option at that time.
On June 20, 1963, Lewis, Sr., wrote to Johnston that he, Lewis, Sr., had interpreted the lease clause “ * * * to mean that if the lease terminated on six months notice, Empey would have the right to buy at the same price it was offered to the other party. However, the lease will not be terminated and the construction of the provision would be in some doubt.”
O’Neill’s lawyer advised him that the lease gave Empey a right of first refusal in event of a bona fide sale and that as long as the lease was in force O’Neill should take only an option on the property. On August 13, 1963, Whittell and O’Neill executed a modification of the option and agreement to purchase to provide that upon receipt by the bank “ * * * of the sum of $2,800,000 on January 15, 1965, the bank shall release the deed covering parcel 14.”
On November 13, 1963, Lewis, Sr., advised Empey’s attorney, who had made inquiry as to any sale of the property, that no sale of the Zephyr Cove property, which was in Douglas County, would take place until after the Washoe County and Ormsby County parcels were sold and that Empey’s lease was in no danger as the group agreed to purchase the property in Washoe and Ormsby Counties over a period of approximately five years.
On November 11, 1963, Whittell extended the June 3rd option to March 3, 1964.
The State of Nevada had indicated a desire to purchase a portion of Whit-tell’s land here involved, and in December, 1963, the appraisals by the State of Nevada were completed and the appraised value was $5,000,000 rather than the $18,000,000 expected. This resulted in renewed negotiations and a tentative sale price, submitted by Whittell on or about March 24, 1964, of $11,000,000 with a lease of the Zephyr Cove property for $100,000 per year from January 1, 1965, to December 31, 1969, with the option to purchase the Cove property for $2,500,000. O’Neill, through Johnston, indicated to Whittell by telegram on March 30, 1964, that Whittell’s offer of March 24th was acceptable “in principal.” Whittell, however, refused to sign the sale documents and on April 27, 1964, told O’Neill that the sale was off.
O’Neill thereafter sued Whittell for the property and after trial in the United States District Court it was adjudged that there was no binding contract since there was an abandonment or mutual re-cision of the option.
Exhaustive discovery was had before the appellees’ motion for summary judgment was heard. All negotiations concerning possible sale of the Nevada property as a whole and the Zephyr Cove *1124property separately were covered in detail, as disclosed in the hundreds of pages of depositions and documents set forth in the record on appeal and as disclosed in the briefs of the parties. The appellant does not contend that there is additional evidence to be produced at trial but that he should be allowed to argue certain portions, disclosed in the record, to the jury.
The history of paragraph 4 of the lease, supra, and its appearance in prior leases of the property is covered in the discovery but there is no evidence of negotiations between the lessor and lessees as to the interpretations of the parties of the right to first refusal provision at the time paragraph 4 was first included in a lease on the Zephyr Cove property nor at the time of the execution of the lease here involved on October 16, 1958, for the period from January 1, 1959, to December 31, 1964.
The District Court, in a twenty-two page Order granting the appellee’s motion for summary judgment, details the facts and law to be applied as to both the case at bench and the companion consolidated case, Zephyr Cove Lodge, Inc., a corporation, v. RKO General, Inc., a corporation, and Joseph I. O’Neill, Jr., No. 71-1006. A separate per curiam opinion has been filed in that case.
In considering the propriety of the summary judgment herein, we of course, must view the evidence most favorable to the appellant. Having in mind that the issue is the interpretation of the provisions of paragraph 4 of the lease, any evidence of intent expressed orally between the lessor and the lessee or lessees should be considered, particularly for the purpose of ascertaining whether there be a material issue of fact to be determined.
The record does not disclose nor do the parties in their briefs point to any negotiations or communications between the parties to the lease involved, or as to a prior lease, which would indicate, or from which a trier of the facts might determine, what the parties intended by the provisions of paragraph 4 of the lease at the time it was entered into or to support appellant’s theory that the first refusal clause was to be deemed a provision to be exercised independent of the sale and cancellation provisions in paragraph 4. The opinions of O’Neill, his counsel and his realtor, Johnston, are not controlling.
It is uncontroverted (1) that there was no sale of the Zephyr Cove property, (2) the lease was not terminated by Whittell, and (3) the lessee was in undisturbed possession of Zephyr Cove until the lease expired on December 31, 1964.
Discussion of Applicable Law
The authorities disclose that there are two general classes of first refusal clauses to be found in leases. Sometimes leases give the lessee an independent enforcealble right to buy the property during the term of the lease on the same terms and conditions which the owner had decided to accept from a third person making an offer in good faith. On the other hand, some leases make the right of first refusal a part of a provision which reserves to the lessor the right to cancel the lease in the event he decides to sell the premises.
We conclude the lease in the instant ease is of the second class, that the right to first refusal in the second sentence of paragraph 4 of the lease is not an independent right but that the first sentence of the paragraph and provision for cancellation therein must be read and considered as a part of and a condition to the first refusal right. The cancellation provision of paragraph 4 is for the benefit of the lessor, in that he has the authority to sell the property free of the lease, whereas the first right of refusal protects the lessee’s tenancy by giving him the right to buy the property to prevent cancellation of his lease by sale.
Both parties discuss Callaghan v. Hawkes, 121 Mass. 298 (1876). In that case, the lease gave Hawkes, the lessor, *1125the right to sell the property by giving the lessees two months notice thereof and also by giving them the right to purchase at the agreed price of sale. The lessees also had the right, in the event of sale, to take off the crops.
Hawkes sold the property, subject to the lease, and the lessees continued in possession to the end of the lease period. The Court held that the right of refusal did not come into effect since the lease was not cancelled, observing:
“The clause in question, in form and necessary legal construction, is enabling and not restrictive, and confers upon the lessor a right which he would not otherwise have had. Independently of, and notwithstanding this clause, he may sell the reversion. The whole effect of the clause was to enable him to terminate the lease, and sell the whole estate, first giving the lessees the opportunity of purchasing. This construction is fortified by the final clause, which allows to the lessees, in case of sale, the privilege of taking off the crops.”
To the same effect, Gulf Theatres v. Guardian Life Ins. Co., 157 Fla. 428, 26 So.2d 188 (1946), and Signal Oil Co. v. Republic Investment Co., 11 Wash.2d 325, 118 P.2d 957 at 959 (1941).
Superior Portland Cement v. Pacific Coast Cement, 33 Wash.2d 169, 205 P.2d 597 (1949), relied on by appellant, distinguishes the Signal Oil Company case, supra, wherein the Court said, as to a first refusal clause like that in the instant case:
“ ‘Cases holding that, where an option has been inserted in the lease giving the lessee the right to purchase, but containing no provision with reference to the surrender of the premises during the term of the lease, the option is enforcible, have no application to the situation presented in this case.
“ ‘The superior court correctly construed the lease as covering only a sale that would disturb the possession.’ ” [Pages 615-616.]
Appellant’s reliance on Wilson v. Brown, 5 Cal.2d 425, 55 P.2d 485 (1936), and Moreno v. Blinn, 81 Cal.App.2d 852, 185 P.2d 332 (1947), does not appear to be justified.
In the Wilson case, the lease provided:
“ ‘The lessors hereby reserve the right to sell the property at any time, and in case of sale, preference to purchase said property shall be given to said lessees.’ This same paragraph of the lease contained the provision that, in the event the lessees should not exercise said preference, they agreed to sell and convey their interest in the service station fixtures to the said lessors, or any person they might designate, at the then market value.” [Pages 485-486.]
The entire tract, of which the leased property was a part, was sold without giving the lessees the right to purchase the leased property. The purchaser contended that the right of first refusal was conditioned on termination of the lease. The Court disagreed, stating that the lessors had treated the provision as an independent right and not conditioned on termination of the lease. [Page 486.] The Browns, lessors, had told the purchaser, Baker, that he would have to see the Wilsons and Baker saw them and offered them the leased property. [Page 486.] There was conflicting evidence as to whether the lessees said they did not want to buy all of the leased premises and this point was resolved in favor of the lessees.
The Court ruled that the lessors had never treated the right of the lessees to purchase as conditioned on the termination of the lease by sale of the property.
In the Moreno case, supra, the lessor, Blinn, leased thirty acres to Moreno for a period of six years. The lessor had “permission to sell said property, but giving tenant first right to purchase.” [185 P.2d at page 333.] The lease also provided that the lessee had the right to remove improvements on expiration of the lease. There was no provision for *1126termination of the lease on sale of the property. In February, 1943, Blinn sold seven of the thirty acres, after Moreno approved the sale and quitclaimed the seven acres sold. Blinn sold to Garcia the remainder of the thirty acres by straight deed, not subject to Moreno’s lease, in October, 1943. Garcia was aware of the terms of the lease. In February, 1944, Moreno offered to purchase the property for the price sold to Garcia. In the meantime, he had paid • rent to Garcia. Blinn contended that Moreno’s right to purchase was conditioned on the lessor’s desire to sell and terminate the lease. The Court said the lease was recorded shortly after it was made and that it was not necessary to give the respondent an option to buy in order to protect his rights for the term of the lease. Holding that first refusal was an independent right, the Court states:
“The language used would indicate that he (Moreno) was given an unlimited right to purchase the property if the lessor decided to sell. Not only is this a reasonable interpretation, but it is supported by the acts and conduct of the parties.
* * * * * *
“A further consideration is that when the Blinns sold to the Garcias their deed was not made subject to the respondent’s lease. * * * The lessor attempted to sell without a reservation as to the lease rights, and, under any view, the right to exercise the option came into existence.” [Page 334.]
Appellant also relies on Gilbert v. Van Kleeck, 284 App.Div. 611, 132 N.Y.S.2d 580 (1954). That case concerned leases of two separate stores upon a portion of the premises involved. One was occupied as a barber shop and was leased to Mr. Ferrara by Van Kleeck on February 15, 1945. The other store was leased to a firm, Crosby and Mertz, later Crosby-Mertz, Inc. Each lease gave an option to the lessee to purchase the entire parcel of which the leased premises were a part on the same terms as offered to any prospective purchaser whose offer the lessor was willing to accept, with the further provision to sell and cancel the lease in the event of a bona fide sale of the property.
Following receipt of Van Kleeck’s letter notifying Ferrara and Crosby and Mertz of impending sale of the property to Gilbert and offering the premises to the lessees on like terms, Crosby-Mertz, Inc., exercised the option to purchase and the property was sold to it.
Gilbert, plaintiff in the lower court, who became the assignee of the option to purchase under the Ferrara lease, sued for specific performance of the contract to purchase between himself and Van Kleeck and of the option to purchase he held as assignee of Ferrara. The appellate division ruled that the purchaser, Gilbert, could not defeat the second option to Crosby and Mertz by purchasing the first option to purchase and then asserting he was exercising the first option “ * * * by matching his own offer.”
The Court considered the contention that the options to purchase were merely conditions with which the lessor must comply if he desired to cancel the lease. After discussing Callaghan v. Hawkes, supra, the Court observes that all the parties, by their conduct prior to suit and by their pleadings in the ease, construed the provisions of the lease as giving the lessees enforceable options to purchase without regard to the provisions for cancellation of the leases. The lessor, Van Kleeck, wrote to the lessees inquiring as to their wishes to purchase the property upon receipt of the purchase offer from plaintiff. Gilbert, in his complaint and amended complaint, alleged his right to purchase the premises under the first refusal rights as set forth in the two leases, referred to above, and these allegations were admitted in the answers. The Court said:
“The construction so agreed upon by all the parties is controlling here.” [Page 589.]
Obviously, the Court, in its ruling, relied on the clearly defined conduct of the *1127parties which evidenced the intent that the option of the lessees to purchase was a right independent of any provision for surrender of the leased premises following sale of the property. We do not have a comparable situation at bench. Here, as soon as the provisions of paragraph 4 came to the attention of the parties, every effort was made to preserve the lessee’s rights under the lease. Whittell is not to be faulted for doing what was required to avoid the necessity of offering the Zephyr Cove property for sale to the lessee.
We conclude that the right of the appellant to purchase the Zephyr Cove property under the conditions of paragraph 4 of the lease did not accrue. The summary judgment dismissing the action as to the appellee herein is Affirmed.