Robert L. Merwin & Co. v. Strong

• Decision Date: 20 July 1970
• Docket Number: No. 18171.,18171.
• Citation: 429 F.2d 50
• Parties: ROBERT L. MERWIN & CO., Inc. and Maritime Contractors, Appellants, v. Donald S. STRONG and Cargo Services, Inc.
• Court: U.S. Court of Appeals — Third Circuit

429 F.2d 50 (1970)

ROBERT L. MERWIN & CO., Inc. and Maritime Contractors, Appellants, v. Donald S. STRONG and Cargo Services, Inc.

No. 18171.

United States Court of Appeals, Third Circuit.

Argued January 30, 1970.

Decided July 20, 1970.

Ronald H. Tonkin, Christiansted, V. I., for appellants.

Edward J. Ocean, Christiansted, V. I., for appellees.

Before HASTIE, Chief Judge, and STALEY and STAHL,^* Circuit Judges.

OPINION OF THE COURT

HASTIE, Chief Judge.

This suit originated in the Municipal Court of the Virgin Islands. The matter in dispute is the possession of a warehouse that had been leased by Robert C. Merwin & Co., Inc., to Cargo Services, Inc. and subsequently had been forcibly reentered and repossessed by Merwin against the will of Cargo Services. By claim and counterclaim both parties have asserted that they are entitled to possession of the property and each has sought damages and an injunction against the other. The trial court sustained Cargo Services' counterclaim and awarded it both actual and punitive damages.

On appeal to the District Court of the Virgin Islands, the judgment was affirmed. This appeal followed.

The facts and their legal consequences on the basic issue of right to possession were stated in the district court's opinion as follows:

"It appears that on January 1, 1966 in connection with the sale of a cargo handling business by Merwin & Co. to Cargo Services, Merwin & Co. leased the warehouse at No. 9 Strand Street to Cargo Services for a term of five years, ending December 31, 1970, with a provision that it would be surrendered upon 6 months written notice. On December 8, 1967 Merwin & Co. notified Cargo Services that the lease would be terminated as of June 15, 1968 on which date Cargo Services was requested to surrender possession. However on March 1, 1968 the parties entered into a new lease agreement covering this and other warehouse properties for the period from February 1, 1968 to December 31, 1971 at the same rentals, $525.00 per month in the case of the warehouse here in controversy. Paragraph 6 of this lease agreement provided in pertinent part:

`6. Anything hereinabove to the contrary notwithstanding, it specifically agreed that the reserved rent for the premises known as #9 Strand Street, Frederiksted, St. Croix, V.I. shall be at the rate of $525.00 per month until June 15, 1968, and shall be subject to renegotiation thereafter as per letter from Lessor to Lessee dated December 8, 1967. It is further agreed that the tenancy of the premises known as #9 Strand Street * * * shall be subject to termination, at any time, at the election of Lessor upon six (6) months written notice to Lessee.\'

"Taking the position that the lease agreement of March 1, 1968 did not operate to extend the lease of Cargo Services on the 9 Strand Street warehouse beyond June 15, 1968, Merwin & Co. about the 21st of June, 1968 forcibly took possession of the warehouse by breaking a lock which the defendants had placed thereon and entering the building. I agree with the Municipal Court that Cargo Services, by virtue of the March 1, 1968 lease agreement, had a valid subsisting lease on the warehouse continuing after June 15, 1968 and that the action of Merwin & Co. amounted to forcible entry and detainer. In defense of its action Merwin & Co. relies upon paragraph 6 of the March 1, 1968 lease agreement, particularly the statement that `the reserved rent * * * shall be at the rate of $525.00 per month until June 15, 1968, and shall be subject to renegotiation thereafter, as per letter * * * dated December 8, 1967.\' Somehow, this language is thought to bring into the new agreement the notice of termination as of June 15, 1968 which was given by the letter of December 8, 1967. The Municipal Court, however, did not think so nor do I. The acceptance of the new lease of March 1, 1968 involved the implied surrender of the old lease of January 1, 1966, 32 Am.Jur., Landlord and Tenant § 910, and the notice of termination given under the old lease fell with it. The reference to the letter of December 8, 1967 relates solely to the renegotiation of the rental rate and not to the renewal of the lease. The fact that the December 8, 1967 letter does not deal with renegotiation of rental is immaterial. The language is that of Merwin & Co. and if it is ambiguous, as it appears to be, the ambiguity must be resolved against that corporation as its draftsman, 32 Am.Jur. Landlord and Tenant § 128. Moreover the presence in paragraph 6 of an express provision authorizing the lessor to terminate the lease on the 9 Strand Street warehouse on six months written notice definitely negatives the idea that the lease was to terminate at all events on June 15, 1968, only three and one-half months later. I conclude that the Municipal Court rightly granted Cargo Services judgment for

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