Fergen v. Lyons, 162 Wis. 131

Fergen v. Lyons

162 Wis. 131 | Wis. | 1916

Lead Opinion

Maushall, J.

A covenant to renew a lease, if the terms are definitely fixed, or means are provided whereby they may be made certain by construction, is enforceable. This court considered that subject at length in Kollock v. Scribner, 98 Wis. 104, 73 N. W. 776, where the following rules were deduced from the authorities: A covenant to renew a lease calls for a new lease, — not an extension of an old one. An unqualified covenant to renew a lease calls for a new lease for the same period and upon the same terms as the original lease, except the agreement to renew. “When the agreement for a renewal contains language other than that appropriate to a general promise, so that, by resort to the settled rules for construction, the language of the covenant to renew and conditions of the renewal cannot be made certain, then such covenant fails for want of certainty.”

The promise to renew in this case is in language, not strictly appropriate to a general agreement to renew. It is *134ambiguous. Therefore the question arises whether it can be made certain by settled rules for construction.

One of the best known rules for construction is that it must be presumed parties, in making a contract, intended to use language effectively in all parts of it. Therefore, the instrument should be so construed as, if possible, to carry out such purpose. Jacobs v. Spalding, 71 Wis. 177, 36 N. W. 608; Hicks P. Co. v. Wis. Cent. R. Co. 138 Wis. 584, 120 N. W. 512; Burgess v. Dane Co. 148 Wis. 427, 134 N. W. 841. So if the agreement to give the respondent the first privilege of renting the farm, if not sold at the end of the year, can reasonably be read as an agreement upon the contingency mentioned to give a renewal for another year on the same terms as those of the original lease, that must be preferred to any meaning which would involve fatal uncertainty.

Another well known rule for construction is that a clause of a contract which is ambiguous by itself, must be read in connection with the rest of the instrument so as to clear up the uncertainty, if possible. Chicago, M. & St. P. R. Co. v. H. W. Wright L. Co. 123 Wis. 46, 100 N. W. 1034; Jacobs v. Spalding, supra. Applying that, our attention is attracted to those portions of the lease which indicate that it was contemplated respondent should incur expense which could not be beneficial to him without his carrying on the farm for a second term, and the broad discretion given him in respect to farming the land with reference to a future season. He agreed to do all the work of repairing the fences and was allowed free hand as to seeding the land to grass.

Another rule for construction is that a contract may be read in the light of the circumstances characterizing its making for the purpose of clearing up ambiguities. Within that rule, the allegation of the complaint falls that the rent stipulated in the lease was disproportionate to the advantages of a one-year lease.

The way the parties understood the lease in performance *135of its terms is another consideration. Respondent prepared sixty-five acres of the plow land for the next year’s work by seeding the same to grass and appellants co-operated with him in the matter. It was argued that this was a trilling matter, hut we do not so regard it. In seeding down the land to grass, respondent may well have been to considerable expense in properly preparing it so as to secure a good catch and put the surface in proper condition for a good hay crop and for advantageously harvesting the same.

Another and very important rule in such cases as this is that, in case of any ambiguity in the provision of a lease in respect to a renewal, the construction should be adopted which will favor the tenant rather than one which will favor the landlord. 24 Cyc. 990, 991.

There is very little use of citing precedents as controlling in a ease of this sort. The principles must govern. Language which would be involved in fatal ambiguity under some circumstances would not under others. A good illustration of that is Holloway v. Schmidt, 67 N. Y. Supp. 169, where a lease for five years contained an agreement that the lessee should have “the first privilege of a renewal” and it was held, in view of the circumstances characterizing the making of the instrument, that “first privilege of a renewal” should be construed to mean that a renewal lease for five years on the same terms as those of the original lease would be made to the lessee, provided the lessor made a lease.

Reading the renewal clause in question in the light of all the terms of the lease, and the circumstances pleaded and which may be proved, characterizing the making of the instrument, and applying thereto the rule that a meaning should be ascribed thereto which will sustain it, if that can reasonably be done, it is considered that such clause is susceptible of being made certain by application thereto of settled rules for construction. Assuming, as we must, that the parties intended to make a binding promise for a renewal of *136the lease, and, looking to all the circumstances which have heen mentioned, it seems that the renewal clause will reasonably admit of a construction to the effect of a general promise to renew, at the lessee’s option, in case of the farm not. being sold before the end of the first term, and the lessor’s concluding to lease the place for the succeeding year. Such a general promise, subject to'the contingencies mentioned, would call for a new lease for a year on the same terms as the original lease; but without any covenant to again renew. That was the view of the trial court and sustains the decision that the complaint states a good cause of action for specific performance so far as the character of the renewal covenant is concerned.

It is thought that the covenant to renew here, in view of all the circumstances appearing by the complaint, expressly or inferably, is distinguishable from the cases cited on behalf of appellants where fatal uncertainty was found, but if that be not- so, it must be remembered that some courts treat ambiguous renewal clauses in leases with much less favor than others and are more inclined to follow precedent than principle. Our purpose is to test the renewal clause by the principles stated in Kollock v. Scribner, 98 Wis. 104, 73 N. W. 776, and not to vary therefrom in order to square the decision with the multitude of existing adjudications dealing with such covenants, or to write extensively to point out wherein the instant case differs from those relied upon by counsel for appellants. It is plain to be seen, however, that “with the privilege of longer” as in Howard v. Tomicich, 81 Miss. 703, 33 South. 493; “preference of renting said property so long thereafter as it shall be rented for a store” as in Delashmutt v. Thomas, 45 Md. 140; “privilege of five years longer, he paying additional rent on revaluation,” no provision being made as to- time or manner of revaluation, as in Streit v. Fay, 230 Ill. 319, 82 N. E. 648, — are quite different from “first privilege of renting the farm if not sold at the end of the year,” as in this case. In neither of the former *137could it be found by construction that the covenant to renew contained a general promise on a contingency or otherwise for a new lease on the same terms as the old one. The same is true of all the other cases cited to our attention,, though it is shown that in some jurisdictions language of a renewal •covenant has been held fatally uncertain which has been otherwise held elsewhere. 2 Tiffany, Landl. & T.1521.

It is contended on behalf of respondent that there was no ■sufficient tender of the down payment required for a renewal lease.’ That is answered by the pleaded fact that appellants had disabled themselves from keeping their covenant long before the renewal lease was demandable. A tender is not necessary, especially in support of an equitable action, where the facts show that it would not be accepted or has been, practicably waived by voluntary disability to do the thing which the tender would require to be done. That is equivalent to a refusal in advance, of a tender and waives it. Potter v. Taggart, 54 Wis. 395, 11 N. W. 678. “A tender is aived where the tenderee makes any declaration which amounts to repudiation of the contract, or takes any position which would render a tender, so long as the position taken by him is maintained, a vain and idle ceremony.” 38 Cyc. 134, 0. A clearer case of uselessness to make a tender could hardly he stated than the one appearing by the complaint.

The further contention is made that the failure to pay the xent under the original lease, when due, worked a defeasance of the renewal covenant. That does not seem so. The covenant to renew was not made conditional upon anything except the decision of respondent to take a new term, and the farm not being sold at the end of the first year. Appellants had until the close of the last day of such term to defeat the renewal covenant.' Therefore respondent’s offer to take the new term was in ample time in any view of the case.

Whether the respondent had a right to retain rent due on the original contract to secure himself for damages for breach ■of the covenant to renew does not seem to be material. Ap*138pellants bad their remedy to recover the rent and respondent his for a breach of the covenant for a new lease. The two matters seem to be independent of each other. In such a case, failure of the lessee to keep some covenant in the original lease is not a defense to an action to compel the lessor to perform his covenant to renew. 1 McAdam, Landl. & T. (4th ed.) 572.

• The foregoing covers all contentions made on behalf of appellants which impress us as requiring discussion. We reach the conclusion that the demurrer to the complaint was properly overruled.

By the Court. — The order is affirmed.

SiebecKeb and KebwiN, JJ., dissent.

Dissenting Opinion

BaeNes, J.

(dissenting). I think there is no ambiguity in the clause of the lease giving the lessee “the first privilege of renting the farm if not sold at the end of the year.” As I view it, it gave the lessee the privilege of renting, provided he was willing to enter into as favorable a lease as any one else. This is the plain and obvious meaning of the language used. The court construes the language as an agreement to renew the existing lease if no sale was made. If this was what was intended, it would have been an easy matter to have said so. Arbitrary rules of construction are more honored by being breached than by being observed, where they serve-to defeat the intention of parties to a written contract.