191 Ky. 595 | Ky. Ct. App. | 1921
Opinion of the Court by
Reversing.
The Palmer Hotel Company, a Kentucky corporation, owns its hotel property in Paducah and the adjacent building known in this record as the Kentucky Theatre.
On July 1, 1918, the hotel company by written contract leased the Kentucky Theatre “for the period of one year from July 1, 1918, with the privilege to the lessees to renew this lease at the expiration thereof under like terms for a period of one year from July 1, 1919, and a like privilege to renew for one year from July 1, 1920, and a like privilege to renew for one year from July 1, 1921,” to the six appellants, Kozy Theatre Company, Arcade Theatre Company, Lawrence Dallam, Leo P. Keiler, Rodney C. Davis and R. R. Kirkland. It was stipulated that the lessees were to pay to the lessor $1,800.00 a year rental, “payable at the rate of $150.00
Appellants took possession, paid the rent for the first year as due, and on June 14, 1919, caused to he written and delivered to Mr. J. C. Utterback, secretary, treasurer and general manager of the hotel company, the following letter:
“Mr. J. C. Utterback, Secy.,
Palmer Hotel Co.,
Paducah, Ky.
‘ ‘ My dear Sir:—
“Please be advised that we wish to exercise our right to continue the lease for the Kentucky Theatre for one year from July 1, 1919, as provided in the original lease, bearing date of July 1, 1918, and hereby bind ourselves for the said period to all conditions of the said original lease.
“Very respectfully,
“Kozy Theatre Co., Inc.,
By Bodney C. Davis, Pres.
“Arcade Theatre Co.,
By Leo V. Haag, Manager. ’ ’
Upon receipt of the above letter Mr. Utterback told Mr. Davis, who was himself one of the lessees and also president and general manager of the Kozy Theatre Company, that “it is all right and agreeable to us.” Mr. Utterback informed the other 'officers and directors of the notice and his consent to a continuance of the lease for another year and they informally approved of his action but no new lease was executed nor was any formal action taken with reference thereto by the hotel company.
The lessees through Mr. Davis paid to Mr..Utterback, who accepted same for the hotel company, rent at $150.00 per month for July and August, 1919; and each month thereafter during- the year ending- July 1, 1920, paid the same amount to appellant, Quincy B. Love, to whom and one G-reen the hotel company on August 8, 1919, leased both the hotel and Kentucky Theatre buildings for a term of fifteen years. Love having- acquired G-reen’s rights under their lease in April, 1920, assigned to appellee Behkopf all of his rights to the Kentucky Theatre.
This appeal is from the judgment of restitution entered in the circuit court upon a trial before the court without a jury of the traverse of a like judgment upon the inquisition before the justice of the peace who issued the warrant.
This court uniformly has recognized a technical distinction between a covenant to renew and a covenant to extend a lease, but has been just as consistent in holding that whether the privilege is to renew or extend depends upon the intention of the parties as shown by the entire lease and their interpretation thereof before the controversy arose, and that the mere fact it is called a privilege to renew is not conclusive. Illustrative oases are Brown v. Samuels, 24 Ky. L. R. 1216, 70 S. W. 1047; Ky. Lumber Co. v. Newall & Co., 32 Ky. L. R. 396, 105 S. W. 972; Grant v. Collins, 157 Ky. 36, 162 S. W. 539; Miller v. Albany Lodge, 168 Ky. 755, 182 S. W. 936; Mullins v. Nordlow, 170 Ky. 169, 185 S. W. 825; Gault v. Carpenter, 187 Ky. 25, 218 S. W. 254; Hurt v. McCord, 179 Ky. 1, 200 S. W. 2. See also Elliott on Contracts, section 4556.
The true rule to be gathered from these authorities as well as upon principle is that such a covenant in a lease, like any other, will be construed according to its terms if these are certain, but if there is. any doubt of what was meant by what was said in the lease the actions of the parties before a controversy arose may be examined to ascertain their own interpretation of its meaning, since they better than anybody else knew what they meant by what they said. But in thisi connection it must be borne in mind as was well said in Ky. Lumber Co. v. Newall, supra, that: “The word renew etymologically contemplates something more than passivity in
And that its meaning when used in a lease in connection with a privilege for an additional term is rarely ever free from doubt and usually must be explained by some other clause in the lease or by extraneous evidence, or both, is attested by the frequency with which the question is litigated and the lack of harmony in the decisions from different courts in attempting to construe its meaning and effect when so used. But as said in Grant v. Collins, supra, after reviewing numerous authorities: “The apparent conflict in the cases as will thus be seen turns rather on the differences in the facts than on a different conception of the law.” And the facts upon which nearly all of the cases turn will be found on examination to be additional clauses in the leases or the acts of the parties which explain what they meant by “a privilege to renew.”
Just what legal import ought to be ascribed to the word renew in this connection in the absence of explanatory facts, is really the question upon which the courts disagree. Some hold it requires the execution of a new lease, which however may be waived; others that there is no distinction between a privilege to renew or extend, while still other courts, among which is our own, take a middle ground. Our court has gone no farther in an effort to define the term when so used than to hold as in the Newall case that it means “something more than passivity” and as in Miller v. Albany Lodge, supra, that by its use “some positive act on the part of the.parties, or notice by the tenant is. required.”
Nor need we now attempt a definition, which manifestly would be difficult, since an additional clause in this lease and the acts of the parties explain what they meant by its use sufficiently for the purpose of this case.
The additional clause which we have heretofore quoted, as in the Grant-Collins case upon which appellees so confidently rely, makes it clear a simple holding over and payment of rent beyond the first period was insufficient to satisfy the terms of the lease, but there the analogy between the two cases ends.
In the case at bar the lessees, or rather some of them, gave timely notice of their desire and intention to “re
This certainly was no simple holding over by sufferance under the statute as in the Grant-Collins case. It was not so understood by either party; but was very clearly the performance of what each party not only believed but actually agreed to be a “renewal” or continuance of the original contract and therefore their interpretation thereof, hence upon authority of all of the Kentucky cases and most others we must so construe it, unless as contended by appellees, (1) the notice was without force or effect because not signed by all the lessees; or (2) the assent by Utterback to a renewal and his actions thereafter are not binding upon the lessor or its assigns because (a) not in writing, and (b) it was not approved at a formal meeting of the board of directors.
(1) There are cases such as Buchanan v. Whitman, 151 N. Y. 253, and James v. Pope, 19 N. Y. App. 324, cited by appellees and with which we do not disagree, to the effect that a landlord is entitled to hold all of the original lessees to a renewal or extension, and that some having retired from the business those remaining can not enforce the -privilege for an additional term. But that rule has no application here since all of the original lessees continued as such and the notice signed by two of them was given for all and so understood not only by Utterback but also by appellees, Love and Rehkopf. This is shown by the fact that they gave notice to each of the original lessees to quit possession and made all of them defendants to this action for forcible detainer. Even if the notice for this reason was defective, which we do not hold, that question clearly has been waived by not only the original lessor but by its assignees as well by accepting rent from the lessees on the second year knowing it was paid for all and as tenants under an extension of the original lease and not as tenants by sufferance. But it is argued the Arcade Theatre Company by surrendering its charter as a corporation and becoming a co-partnership within the first period so changed its character as to call for the application of the rule.
(2) (a) The contention that the verbal consent of Utterback to the “renewal” construed and called by them a continuance of the contract for an additional term is within the statute of frauds and therefore without binding effect, is based upon the theory that there could be no renewal except by the execution of a new lease. But obviously there is no merit in this contention upon the construction given the contract by the parties and therefore adopted by us as the true one, that a new lease was not required since the lessees by giving notice and holding over hold under the original contract and not the notice; and the giving of the notice is not an agreement within the statute of frauds. 16 R. C. L. 885.
The recent case of Cincinnati, N. O. & T. P. Ry. Co. v. Depot Lunch Boom, 190 Ky. 121, is not in point because there was no provision whatever for an additional term in the expired lease and the verbal promise of a new lease relied upon there in defense of forcible detainer was an entirely independent promise in no wise connected with the original contract and within the statute of frauds. So also with the other cases cited by appellant in this question.
(2) (b) The only authority cited in support of the contention that a corporation can act only through its directors at an official meeting regularly held and that its acts can be proven only by the records of such a meeting is a statement found in Bastin v. Givens, Admrx., 170 Ky. 201, 185 S. W. 835, of the
It is clear therefore that the lessor the Palmer Hotel Company and its assigns, Love and Rehkopf, are bound by the acts of Mr. Utterback, and for the same reasons upon like evidence the Kozy Theatre Company became bound by the acts of Mr. Davis, its president and general manager, in both the execution and extension or' “renewal” of the original contract at the expiration of the first period.
This being true it is apparent Love and Rehkopf could not terminate the contract at the end of the second year upon notice to appellants to surrender possession. It is likewise clear it seems to us that even if the privilege had been technically one for a renewal requiring the execution of a new lease appellees could not take advantage of their own refusal to execute same and evict appellants after they had signed and tendered it to them for that purpose. But however that may be the; appellees took the lease as it already had been construed; by the original parties thereto and appellants before the' expiration of the second year did all and more than they, were required under that construction to perfect their' right to a further extension thereof.
In this view of the case we need only notice one of the several other questions argued in briefs. That is whether or not the lessees because of their failure as a whole and of one of their number to comply with section 199’b, Kentucky Statutes, .are deprived of their right to urge their contract in defense of this action. Section 199b of the statutes forbids any person or persons to carry on, conduct or transact any business in this state under an assumed name until a statement has been filed in the county clerk’s office of the county where they propose to operate giving the name to be used and names and addresses of the persons so engaged.
But by subsection 4 of this section it is provided that the act shall not apply to Kentucky corporations or “be deemed or construed to prevent the lawful use of a
Therefore with reference to such facts tbe statute can only be fairly and reasonably construed to mean that when a party makes a contract with several as to one of whom it is voidable at tbe option of tbe first party and be elects to avoid it as to that one, tbe contract must be treated as having been made only by those who bad tbe right to make it in determining their rights and obligations thereunder.
In our opinion tbe appellants, are entitled to bold tbe premises under their exercise of tbe option provided in tbe lease, and appellees did not bave tbe right to evict them.
Wherefore tbe judgment of restitution is reversed and tbe cause remanded for proceedings consistent herewith.