Smalley v. Juneau Clinic Building Corporation
493 P.2d 1296
Alaska
1972
Check Treatment

*1 Appellants, al., Robert SMALLEY et R.

JUNEAU CLINIC BUILDING CORPO RATION, Appellee.

JUNEAU CLINIC BUILDING CORPO Cross-Appellant, RATION, al., R. SMALLEY et

Robert Cross-Appellees. Nos. Supreme of Alaska. Court 14, 1972.

Feb.

OPINION

RABINOWITZ, Justice. appeals fairly These out a arise com- plex setting involving leasing factual closely corporation building a held of a in- partnership a medical which at the ception composed of the lease was majority of the shareholders of the lessor corporation. Building Cor- Clinic Juneau

poration single story built a concrete medi- containing building, approximately cal 7,100 square space, in feet of useable corporation downtown The con- Juneau. ducted no business other than that related ownership to the and rental this build- 1, 1960, ing. August corporation On partnership a Clinic, medical Juneau composed Carter, of Doctors C. William C. Whitehead, Gibson, en- W. M. Jack 10-year agreement. tered into a writing signed The in lease was and was parties.1 However, it was not ac- Rent, knowledged. in the amount of $3,800 paid monthly. was to be In Novem- corporation ber sued Doctors Hansen, Smalley, Robert Peter R. O. nonpay- the estate of Doctor for perti- ment of rent under the lease. The preceded corporation’s nent facts which litigation initiation of this are as follows. The doctors and staff Juneau Annis, Juneau, R. appellants Han- J. building partnership occupied Clinic Smalley. sen and August of until under the lease from Holmes, Faulkner, Banfield, Michael M. During period 1967. June Doogan, Juneau, Boochever & fluc- partnership number of doctors Bldg. Corp.. recruited tuated. At the time was partnership May there Engstrom, Davidson, Allan Engstrom A. physicians were five other who were Evans, Juneau, & for Nola Gibson. partnership. members of Han- When BONEY, Before J., and RABIN- sen there were six other C. arrived ERWIN, However, OWITZ and during period of physicians. JJ. Carter, president, (“senior”) part- Gibson, secretary, 1. be full Doctors could signed corporation. ners, junior partners on behalf of the or associates. Smal- Car ter, eventually Whitehead, co-partners ley Gibson and became full Hansen do ing partners. Gibson, business under whose administratrix the name “Juneau Clinic,” signed partner. below, full lessees. The was a defendant stock corporation closely held, the son, Whitehead, with Gib holding and Carter a ma jority interest. corporation Smalley, sued four Thereafter

about months 1965 and six Hansen, for rent in- estate of Gibson gave left the clinic or notice of and the doctors fifth, expiration Gibson, due until tent was ex- to leave. A July superior court pelled pe- granted for a short Smalley, motion for riod and Gibson’s in October 1965.3 *3 partial holding summary judgment, the efforts, Despite intensive recruitment acknowledg- it lacked because void physicians practicing only there were three corporation then amended its ment. The by beginning at As the clinic the of 1967. due rent diminished, complaint, alleging it was for physicians the the number of Jan- remaining doctors were to work period forced uary and and for the of 1967 March long compensate high hours to for over- July April 1968. The trial through 30, 1967, head costs. On Gibson June for subsequently granted motion partnership. Smalley withdrew from the summary holding that the assets judgment, and partner- Hansen assessed then the partnership first were ship’s situation, financial found any judgment for ob- payment liable disastrous,4 immediately prac- and ceased rent, by and tained for that Smal- plaintiff ticing building. part-time at the clinic One Hansen, ley as the doing and business Ju- employees kept and two full-time were Clinic, solely any neau liable for premises purpose collecting for the payments plaintiff.6 rental found due transmitting patients’ and receivables rested, After had the court all employees occupied records. These two corpora- directed in favor of the clinic, a verdict small remaining offices in the there $37,500.7 until March 1968. for tion Apparently keep part- signed 3. in an effort to as a 5. Gibson the lease lessee. nership functioning, agreement Smalley obligated in Octo- themselves and Hansen .Gibson, Smalley, perform ber Henry between Dr. lessees under Akiyama (a partnership signing partnership I. mem- which time), signed provided partnership ber at that and Hansen was both expulsion. In after Gibson’s return bound and that new members the lease partnership, part- to the Gibson’s readmittance woud the terms of the be bound Smalley agreed nership agreement. addition, he and in the event the lease Akiyama provided that either or Hansen itself that it would among partners binding should be remain- enure benefit of and to the ing upon partners at the time a final and above named dissolution each up winding partnership occurs, person any admitted to and then, any event, (emphasis added) Dr. and Mrs. .... Smalley Gibson and Dr. and Mrs. do summary judgment partial had the 6. This hereby agree, as of the date of such holding the “indemnification” effect of Akiyama event, Dr. hold Dr. Gibson, Smalley, agreements between liabilities, Hansen harmless from all meaning- supra, to be see note 3 any claims and demands of description existing against nature case is concerned. less insofar as this partner- said ship event, on the date of such includ- represented the reasonable That amount any ing but not limited to ob- further premises for rental the 10- value of ligation under that certain lease dated through July April period, month August 1, 1960 .... agreed $500, 30,1968, rental value less separate agree- time, At same plaintiff equipment the had sold. of some ment, Smalley’s return for “suc- liable for ten were found defendants cessful effort to have Gibson reinstated employees their had months’ rent because partnership,” agreed to hold occupied nine months after Gibson Smalley continuing harmless from ob- left, a one month no- found and the court ligation building under the lease for the required period to terminate tice Smalley partner if awas at the time of tenancy. partnership. dissolution of the Projected gross income with two mem- $17,920 monthly, projected bers was while gross expenses monthly. $19,200 totalled appeal recording and Hansen but similar Alaska statute. $3,800 Chambers, Waskey court’s determination that awas 224 U.S. 32 S. monthly reasonable rental and its refusal Ct. 56 L.Ed. 885 apply “indemnification” question The more difficult here is the corporation Gibson’s estate. The parties’ effect comply failure to appeals from the court’s determination statutory requirement the lease is void unenforceable. Gib- acknowledged. lease be The trial court urges son’s estate affirmance of the lower concluded that such failure rendered the every respect. court’s decisions in instrument invalid. The court noted that We first turn to the of whether the acknowledgment, issue previously which had trial invalidation permissive, of the 1960 lease been mandatory was made question was erroneous. Resolution of this replacing requirement that deeds *4 necessarily disposition controls of conveyances signed two witness- appeals. issues raised in these es. The trial that: court also stated superior The court my found lease to be As a policy, interpretation matter of invalid acknowledged. because it was not is that was this intended to surround the The trial decision based on an making was of an instrument of this kind interpretation formality which with 34.15.150(a) impress upon AS that would provides in part: . . . seriousness dealing manner, in land in this and that it conveyance A executed in the state of legislature’s was the intention that no in- land an interest in land in the state valid, strument failing thus should be acknowledged judge, shall be a before even if parties, between much less as to court, superior notary pub- clerk parties, third without the existence of lic, postmaster, or in the commissioner formality. that proved state or in with accordance §§ agree question We that this must ulti- chapter. 210 or of this 220 mately be decided a policy. as matter of applies lease statute to a for a However, agree we are unable to years. terfn of In the case at the cor bar interpretation trial court’s the effect poration challenge applica does not lack acknowledgment of an as between Moreover, statutory tion. we find the def parties to the lease circumstances of “conveyance” sufficiently inition of is discussing policy Before case. is- regard, broad include a lease. In this involved, appropriate sues we think it provides part: AS 34.15.350 prior consider leg- Alaska case and the law “[Cjonveyance” every history includes instru- islative 34.15.150(a). AS ment in writing by an estate which or While post-statehood there are no cases property, interest in including royal- real construing 34.15.150(a), AS a number of ty minerals, and other interests in cre- is Alaska territorial decisions were concerned ated, alienated, mortgaged or encum- predecessor with the various statutes which bered, prop- or which the title to real required conveyance that a deed or be exe- affected, erty except a will. cuted before two signing witnesses.8 The significance Also of corporation fact that the propo- cites these cases for the Supreme Court, United States speaking sition comply that failure to ac- through Holmes, knowledgment requirement has held that a does not make Justice lease was conveyance a under an an par- earlier instrument invalid as between the above, acknowledgment pre-1953 requiring 8. As noted was statutes two witnesses mandatory made at which time are contained in Civil Code of Alaska ch. requirement dropped. (Carter’s 1900) ; the two witness was 82 508 § Codes § then, (1913) ; (1933) ; Before the two witness re- CBA § § CLA quirement occupied position the same 22-3-9 ACLA acknowledgement occupies today. uphold Smalley, Han- Two cases seem to it, only precludes its rec- but rather ties to sen, position, but these two as and Gibson’s thus its effectiveness ordation and Zesch, 7 qualified. In Rolando v. Cross-appellee must be Gib- persons. third (1926), the territorial distinguish them on Alaska artfully seeks to son to be void as between found grounds. various original parties certain formalities where Morency Floyd, 2 Alaska observed, among them the two not district court held (1904), the territorial However, requirement. there were witness unwitnessed, unacknowledged, and many irregularities in the so execution sufficient, yet unrecorded deed could say the it is inaccurate grantor grantee, convey le- between only the two witness case concerned however, Morency, contained gal title. case is requirement.10 The second White- estoppel, the court strong elements of F.Supp. Foxhill, 13 Alaska head v. estoppel specifically an- referred involved an unwit- (1952), which nouncing holding. In Eadie v. Cham- its nessed, was subse- unrecorded deed which bers, 1909), (9th Cir. 172 F. quently The court stated lost. court held that a deed which had been wit- convey- document “ineffective as only person nessed one nonetheless convey.” ance” “valid as a contract but valid between the to the deed. However, to hold that the court went on *5 However, Supreme appeal on to the Court equitable right to grantee the first had an States, of the was reversed United the case conveyance subsequent from a demand separate grounds, on made it unnec- which grantee purchased the land from who had essary validity for court to decide the Significantly, grantor. the common Nelson, the deed.9 In Alas- James money grantee was not limited to first 117, 130, (9th ka F.2d Cir. specific damages to demand but was able 1937), the court found that convey. contract to performance of the acknowledgments are not essential to Thus, authority for the the case is not instrument, validity of an as between unacknowledged proposition that an privies. parties the immediate their legal is without effect.11 particularly applicable rule Thus, applicable case law review where, here, cases as a deed is relied ' in the cases are Alaska demonstrates that upon estoppel. creating as an split. deci- There is no consistent line of However, out, points the ac- clearly enunciating a state- sions decisive knowledgment requirement which James legal effect of ment of the law as to the pre-1953 permissive construed was the re- acknowledgment comply failure to with the quirement. not concern The case did predecessors, the statutes re- statute or its requirement, mandatory two witness which quiring two witnesses. post- analogous found is to the we have history legislative turn to We next require- mandatory acknowledgment above, prior 34.15.150(a). As noted AS addition, estop- relied on ment. James required to Alaska law attestation pel, quotation as the above indicates. ack and permitted two witnesses Waskey Chambers, 11.Although 224 U.S. that a the case does indicate S.Ct. 56 L.Ed. 885 deeds can be made between distinction statutory require- comply with form which seal; not there The lease was under not, (i. e., the ments those which do witnesses; subscribing the cer- were no conveys land, while the latter former acknowledgment indi- tificate did not equitable gives grantee an rise in the to partners subscribing cate conveyance) right this distinc- demand to persons who known to the officer to be the importance the case at no tion is of lease; and one of the lessors executed bar. and one of the lessees subscribed attor- neys not and the authorization such did appear document. For is a reasonable amendment suasive. we think nowledgment.12 The 1953 premise requirement and that the such deleted the two witness them- acknowledg as the lease in this case consider provision making substituted a agreements. Certain- mandatory.13 ment The trial court found selves bound carry ly various legislative where the out the in this action an intent to sur rent, (occupy, pay terms of making round the of such with instruments period many years, as etc.) over a oc- impress upon par formalities so as to case, the curred in the instant inference dealing ties the seriousness of land. agreement binding considered the implication main trial weight. is entitled to considerable Limit- finding, namely, unacknowledged leas non-acknowledgment ing the effect of parties, es will be void no between the has persons parties’ relations with third upon logical discernible basis which canwe preserve par- the inference choose between attestation and acknowl bound, ties consider themselves while at edgment impressing as means of serious compliance upon requiring the same time parties. ness link The clearest provisions those acknowledgment legisla which could be found between the protect who their interest change judicial tive and the wish result obtained unacknowledged instrument stran- prior below would be evidence that to 1953 gers agreement. courts to the non-compliance treated with the mandatory requirement two witness as fa policy These considerations com tal validity. so, to a lease’s If this were port purpose general rule that the we could readily more conclude that acknowledgment usually allow legislature had intended the same conse instrument to be or to be intro recorded quences accompany the new mandatory proof duced into further evidence without requirement acknowledgment. But, can purposes execution.14 Both these indicated, our review of the cases we do *6 acknowledgment be ascribed the Alaska not find pre-1953 decisions follow rule, unacknowledged conveyance since an Rather, such a trend. the cases evidence a may cannot not be read in be recorded split, majority with the upholding the va proof evidence further the without lidity despite noncompli conveyance.15 ance with the requirement. two witness therefore conclude that failure We possible Another legislative intent which comply mandatory acknowledg might assigned to the statute is that the requirement 34.15.150(a), ment of AS legislature intended that no instrument that affecting while and admissibili recordation was unacknowledged recorded, could be al- ty, making the not have the effect of does though if signed by parties it would be conveyance parties. as between the void valid as between Taking ap- them. this contrary The trial determination in proach, the 1953 amendment requiring ac- the case at bar erroneous. was knowledgment could be viewed as reflec- tive of legislature’s pur- judgment concerning facet that ac- One additional knowledgment ported invalidity question the lease in be a more effective way than attestation to eliminate remains to be discussed. The trial clouds titles disputes concerning specifically declined to consider whether legitimacy. interpretation is consistent the lease was invalid under the statute with vari- policy ous the lease per- considerations consider frauds in view of its decision that we (1949). 12. Darling, 22-3-9 § ACLA P.2d 238 Or. (1964). 13. SLA ch. § codified in § Cum.Supp. 22-3-9 AOLA 34.15.260. 15.AS g., Walsh, Cal.App.2d 14. E. Lillard v. (1959) ; 342 P.2d Houck v. signed by to be noncompliance it is with written and

was void because predecessors inter- charged (here, their we acknowledgment statute. Since est). as lease not void have held byit reason of non- between however, Gibson, Smalley, acknowledgment stat- with compliance did argument not that the raise

ute, necessary it to consider whether is requirements section 58-2-4 satisfy the by operation of lease is void rendered provided: which A.C.L.A.1949 Alaska’s statute of frauds. property, or in real estate interest No not exceed- other than a for a term agreement was entered into The lease power year, nor trust or ing one applicable that time August 1960. At created, concerning can be property, such provided part: law transferred, or declared otherwise than provided Except otherwise conveyance by law, by a operation of or promise section, or agreement, this or writing instrument in subscribed by undertaking not enforceable shall by transferring, party creating, or note memo- unless some or action it or same, declaring by his or lawful writing sub- be in randum thereof authority, agent under written and exe- party charged, to be scribed with such as are re- cuted formalities agent, agreement, his lawful if such quired by law. promise or is one fol- undertaking statute, they argue On the basis of this lowing : that the lease not “executed e., required formalities are law”—i. leasing An for a (f) no acknowledged was not and thus inter- period year longer than one .... property est in was created. Resolution of latter contention de- promise A3. contract or which pends exceptions on whether of section subject to subdivision 1 of this section apply 58-2-2 are found to to section 58-2- satisfy does requirements which not not, subdivision, If do and section -58-2-4 is of that but which is other- alone, standing read valid, then we would have to wise if enforceable ... hold the lease void because of its lack acknowledgment. We to reach decline (d) party whom enforce- prior result because which con- decisions admits, sought voluntarily ment is or in- *7 predecessors sidered section 58-2-4 its and voluntarily, any pleadings in his or at part treated that statute of the statute stage of this or other action or frauds, subject of and therefore to its ex- proceeding, making agreement of an O’Connor, ceptions. Geist Alaska F.Supp. (1950); Weiss v. Girtz, Ellis, (1922); Alaska 547 Treat v. permissible It shall not be raise 6 Alaska 305-313 the defense of of Statute Frauds unless party raising the same denies the ex- in determining We conclude that agreement, istence of an or a material this of frauds question statute sections 58- part thereof, in his verified answer or 2-2 together. and 58-2-4 read must be reply, provided, original party that if the Thus, exceptions furnishes section 58-2-2 deceased, agreement to an re- operation Study of section 58-2-4. quirement apply shall not his Smalley, of the record shows that personal representative.16 have the estate of Gibson admitted the making question. The lease instant case satisfies the of the lease in these requirements circumstances, out in we the lease set Section for it is hold that is not (Cum.Supp.1958).

16. § 58-2-2 ACLA violative of the statute of contingency frauds. thus the of withdrawals unnecessary by partners conclusion it makes to decide was foreseen and not unantici- corpo- pated. Additionally, the further issue as to whether the specifically lease performed sufficiently provided ration lessor under partners that individual the lease to out take the lease of the ambit continue to be liable under lease should dissolution, withdrawal, the statute of frauds. partner occur. circumstances, Under such neither the doc- arguments As alternatives to their that impossibility performance trine of nor acknowledg- the lease was void for lack of the doctrine of of purpose frustration noncompliance ment and for with the stat- Smalley available to and Hansen.17 frauds, Smalley ute of and Hansen have holdings regard Our to the issues of impossibility also advanced the doctrines of validity inapplicability of the performance purpose and frustration of asserted impossibility defenses of per- noncompliance to excuse their purpose formance and agreement. frustration of re- terms the 1960 lease Since quire that the trial court’s directed verdict we held have that the lease is not rendered be set aside and the case remanded for a acknowledgment invalid for lack of or retrial, new trial. noncompliance frauds, likely On one is- with the statutes of jury sues for resolution proper will be the we must Smalley now consider whether damages amount of to be awarded under and Hansen should be excused from their the lease. This in turn issue involves de- obligations application of either of question termination of the of whether impossibility these doctrines frustra- corporate lessor undertook reasonable mea- tion. mitigate Smalley sures to and Hansen’s Although impossibility and frustra damages under the lease.18 This is not to defenses, separate tion are here can part be taken as an intimation our on together be dealt with because we hold per- sole issues retrial will be those inapplicable both to the lease damages.19 taining to for similar Smalley reasons. At the times One final issue remains to be decided in joined part and Hansen appeals. Smalley appeal these and Hansen nership, they partner were aware that each superior partial judgment right agree had under the rendered favor of the estate of Gibson ment partnership, to withdraw from the “in- regarding the effect so-called Inc. Sons, State, 17. See Merl F. Thomas pleadings, is conceivable 19.Under (Alaska 1964) (impos- 396 P.2d Smalley and Hansen will be able to sibility), citing Williston, Contracts evidentiary marshall a sufficient (rev. 1938), § at 5511 ed. for the legal persuade the trial basis proposition unanticipated cir- jury estop- regarding there is a issue cumstance, the risk of which should not pel claiming corporate from lessor upon promisor, may be thrown make rentals under lease. performance so difficult from that ex- attempted estoppel Hansen to raise the pected promisor as to excuse the *8 from in a issue somewhat nebulous fashion v. Fuller- duty perform; his to Jones relying chiefly major on the fact that the Garvey Corp., (Alaska 386 P.2d 838 closely stockholders of the held lessor cor- 1963) (frustration) ; United States poration prominent members of the Mining Co., 517, Buffalo Coal Smalley 345 F.2d partnership. Additionally, lessee (9th 1965) (frustration) ; Cir. point Me- and Hansen to the fact that gan Updike Corp., 551, Grain F.2d withdrawals of Whitehead and Gibson (8th 1938). 553-554 Cir. partnership’s caused the decline of the practice, Gibson, medical and since that Fowler, Coffin v. major corporation, 483 P.2d stockholder in the (Alaska 1971) ; compare persuaded Jones v. Fuller- them remain in to the last Garvey Corp., (Alaska unprofitable 386 P.2d partnership, medical 1963), applied where we inequitable corpo- contract law would be to allow the purpose doctrine of frustration in de rate lessor to hold them to the terms of ciding problem. a landlord-tenant the lease. Building Clinic between agreements entered into demnification” Juneau Carter, lessor, and Wil- C. C. Corp., In Smalley with and Hansen. Gibson Gibson, all and W. partial sum- liam M. Whitehead motion for granting Gibson’s J. lessees, any obliga- co-partners, as judgment, the trial stated mary this withdrawing partners of tions due part partnership Gibson, partnership, predecessor its defendants as between that succeeding partnerships. Hansen, or Smalley the assets of are first liable partnership Clinic promised: agreement, In the Gibson second payment any judgment obtained for Smalley In that Dr. should the event subject of the by plaintiff for rental partners remaining at among the . premises; . . that defend clinic up winding dissolution and time a final Smalley and ants d/b/a Juneau occurs, then, in such partnership of the plaintiff for solely are liable event, Smalley shall be relieved Dr. subject premises after rental June any obligation further under [the lease] . . . issue revolves Determination of be- now estate contends Gibson’s agreements around two which involved partnership on cause left the Gibson Smalley and Hansen. On October June any he cannot be held liable for part- of the unanimous vote date. debts accrued after that partnership pursuant provided procedures ners and partnership agreement, in the Gibson argument merit some has expelled Four partnership. was from the under trial court’s determination days part- he later readmitted (and Smalley and the lease was void hence nership. In of his readmis- consideration lease, but liable Hansen were not under the sion, separate entered into two Gibson rental only reasonable were liable first, agreements. In the Gibson tenants), but it premises holdover wives, Smalley, along agreed their light unpersuasive in determina of our Akiyama that in the Dr. event that or between tion lease was valid as that the Hansen Dr. do hereafter from parties. obligation pre-exist- withdraw The lease die, expelled, the partnership, departure partner or are ed Gibson’s or become from continuing ship, obligations disabled since arise as such partnership, or in the event ei- into.21 time a valid lease entered part- ther of among them should harmless partners to hold his agreeing remaining obligation ners at the time final disso- exist any from liabilities lution and winding up of the bound ing against partnership, occurs, then, any event, escape un such way Dr. in a that he cannot himself Mrs. Gibson and Dr. and in constru Mrs. der of this case. For the facts hereby attempt agree, do as of the of such ing agreements, date must these we event, Akiyama parties.22 Dr. hold Dr. give to the intent of effect liabilities, agree Hansen all harmless from intent two that the We think any claims and demands of nature and them gauged ments description existing against partner- selves, that, the event said to establish event, dissolution, ship including on the partners date until remained any obligation but not further limited to harm were to be held Smalley and Hansen arising under August lease dated certain claims for rent less previously indicated, Joray Corp., *9 partial 20.As F.2d 21. 183 Richman v. summary judgment 1950). (4th had the effect of hold- Cir. 670-671 ing agreements the “indemnification” be- Gibson, Valdez, Smalley, Hansen, City tween and see 22. of 437 Port Valdez Co. meaningless supra, (Alaska 1968). 3 *10 where, contractual dispute over unambigu it is there certain clear whether in- the actual to ascertain is, terms in order obligations of ous. If it then the theory that parties on tention of from the con determined must be differ- things to mean different ambig words can Only if the contract tract itself. people. ent taken to as may parol testimony be uous thereto. certain the intention Thus, contains the law Alaska now ap- court, authority opposing case two while In Alaska Placer Co. this fa- cases, majority opinion proaches. relied Since citing previous Alaska approach”, I would “objective in- theory contractual vors upon opposing re- directly and Placer Co. espoused overrule Alaska terpretation Professors its any possible uncertainty over Wigmore.5 approach move Corbin4 and every hearing case demise.6 require 6.See Erwin, (1960). Evidence or Not Parol Parol Contracts § 3 Corbin on Alaska, Alaska Law Jour- Evidence (3d Wigmore ed. Evidence § 5. 9 nal 20 1940). notes and 6 insofar P.2d 771 as this case is concerned. 1305 from Admittedly agree parties, the lease.23 of the the objects the sought to ac- be specifically pos complished ments did not envision the and the surrounding circum- sibility might not remain Gibson stances at the time the nego- contract was partner. Yet his withdrawal did not in tiated.” Pepsi Bottling Cola Co. v. New any lesson way duty Hampshire or relieve him his of Co., Ins. 407 P.2d 1013 to Smalley hold (Alaska and Hansen 1965). harmless. Since we find two the plain The language agreements agreements the ambiguous of indi toas whether it was cates agreed that Gibson parties intent Smalley provide hold of that the and Hansen harmless of assets “as the date of partnership Clinic Juneau whether or not he were to was a be made pay- [dissolution]” first liable for the partner at that time. ment judgment rent, of a we hold under the criteria of Pepsi Cola this issue holding Our effect of the “in- was an inappropriate one resolution agreements requires demnification” that we summary judgment. At the new trial evi- decide a second facet of the trial court’s will dence have to be properly adduced to construction agreements. of these This resolve this issue. point concerns whether the trial court cor- rectly decided that the assets of the Juneau Reversed and for a remanded new trial. Clinic partnership are first pay- liable for ment of judgment obtained the cor- CONNOR, J., participating. not porate lessor for rental of the prem- clinic ises. ERWIN, (concurring). Justice argues that at most the of specifically disposition I concur in personal were “limited opinion, majority in the issues raised liability of Hansen and Smalley and did ’ remove an exist- go but further and go not to the of assets “parol evidence ing ambiguity Alaska’s partnership.” the language But rule”. agreements may also be construed so as to opinion returns to the majority The lead one to the conclusion that interpretation con “objective theory” of of protect meant interests Restatement tracts followed as well as those 1 Contracts Professor Williston2 personally. individuals these cir Given adopted specifically which had been previously cumstances we held have of Alaska Placer uncertainty prior where Alaska3 the case ambiguity or exists in 1969). Lee, (Alaska 218 language employed agreement, Co. v. 455 P.2d view requires court to “may approach intent thereto as objectively to language ascertained of a contract wording and conduct Pepsi City Bottling See also Valdez of Val- Cola v. New Port Co. Co. 1968) ; dez, (Alaska Hampshire Co., Ins. 407 P.2d 1013 437 P.2d 771 (Alaska Erwin, 1965), “Parol or Not Parol we said : Evidence . Alaska,” are in We Evidence 8 Alaska L.J. those (1970). authorities which hold that where the terms of are [contract] clear 229-231, 1. Restatement §§ Contracts unambiguous, the intent of the must ascertained from the instru- itself, ment and that where there is Williston, §§ Contracts Law uncertainty ambiguity, may intent (3d 1961). 600-601, ed. language be ascertained from parties, objects City Valdez, conduct sought 3. Port Co. v. Valdez accomplished 1968) ; (Alaska Pepsi to be and the sur- Cola P.2d rounding Co., Hampshire Bottling circumstances at the time the v. New Ins. Co. negotiated (footnote 1965). (Alaska contract 407 P.2d omitted).