Farm Supply Co. of Albany, Inc. v. Cook

• Decision Date: 16 November 1967
• Docket Number: Nos. 1,No. 43019,2,3,43019,s. 1
• Citation: 159 S.E.2d 128,116 Ga.App. 814
• Parties: FARM SUPPLY COMPANY OF ALBANY, INC. v. Alice F. COOK
• Court: Georgia Court of Appeals

Page 128

159 S.E.2d 128

116 Ga.App. 814

FARM SUPPLY COMPANY OF ALBANY, INC. v. Alice F. COOK.

No. 43019.

Court of Appeals of Georgia, Division Nos. 1, 2, 3.

Nov. 16, 1967.

Rehearing Denied Dec. 11, 1967.

Certiorari Denied Feb. 13, 1968.

Syllabus by the Court

1. Construction of ambiguous written contracts is a matter for the court, and no jury question is raised unless after application of all applicable rules of construction the ambiguity remains.

2. Ambiguous or doubtful provisions in leases are to be resolved against the lessor.

Farm Supply Company of Albany, Inc. brought an action, as lessee, for a declaratory judgment against its lessor, Mrs. Alice Faye Cook, to resolve a dispute in the construction of the lease and adjudicate the ownership of money deposited by the plaintiff into the registry of the court as payment under protest of the balance of rental payments claimed by the defendant lessor to be due. The petition alleges substantially as follows: The lease, executed on February 15, 1955, covered three contiguous tracts of land in Albany, Ga. The lease provides for a monthly ground rental of $150, which covers all three tracts, plus 'such additional rentals as are hereinafter specified.' It further provides that all or any portion of Tracts 1, 2 and 3 may be subleased jointly by lessor and lessee upon mutually agreed upon terms, with arbitration procedure provided in case of disagreement over the reasonableness of terms. Plaintiff lessee was given the sole rights to the subleasing and rental proceeds therefrom as to Tract 1. All subleases of Tracts 2 and 3 were to be signed both by lessor and lessee and were required to provide that rental payments be made jointly to said two parties. The lessor was obligated to pay all the ground tax on Tracts 1 and 2 was to pay it jointly with the lessee on Tract 3. The lessee was made responsible for property taxes and municipal assessments, except paving, for all improvements on Tracts 1, 2 and 3 made by the lessee and/or the sublessee. The disputed provision is as follows: '7. In addition to the one hundred fifty ($150) dollars per month ground rent, lessor shall be paid as additional rent the first one hundred and no/100 ($100) dollars per month realized from any subleases, and fifty percent (50%) of all monthly rentals realized over one hundred ($100) dollars under any subleases as to Tracts two and three. Lessee shall be entitled to receive fifty per cent (50%) of all rentals from such subleases each month after the first one hundred ($100) dollars has been paid lessor.' There are two outstanding subleases, rentals from which are to be shared in accordance with said Paragraph 7; i.e.: those on Tract 2 and Tract 3, with monthly rentals of $200 and $600, respectively. Plaintiff's construction of the lease is that, in addition to the $150 ground rent, the defendant lessor is entitled only to the first $100 of the aggregate of all rentals received from all subleases relating to Tracts 2 and 3, together with 50% of the balance of such rentals from all subleases remaining after deducting said $100. Defendant contends that, in addition to the ground rent, she is entitled to receive the first $100 from each sublease relating to Tracts 2 and 3 plus 50% of the balance of rentals from each sublease remaining after deducting said first $100.

Defendant filed an answer, admitting the above allegations and alleging a former lease, which the present lease had superseded, plus other circumstances surrounding the execution of the present lease. Plaintiff filed demurrers to the answer and a motion for summary judgment, supported by an affidavit of plaintiff's attorney, to the effect that the lease in dispute had been prepared by defendant's attorney.

The court overruled the plaintiff's motion for summary judgment and granted a declaratory judgment in favor of the defendant (holding that the construction of the lease was a matter of law for the court), from which judgment the plaintiff appeals.

Swift, Pease, Davidson & Chapman, W. G. Scrantom, Jr., Columbus, Burt & Burt, Hilliard P. Burt, Albany, for appellant.

Lee & Hitchcock, William S. Lee, Albany, for appellee.

EBERHARDT, Judge.

1. What is now Code § 20-701 has been in every Code, including the first: 'The construction of a contract is a question of law for the court. Where any matter of fact is involved (as the proper reading of an obscurely written word), the jury should find the fact.' It was the common law rule long before the first code. A matter similar to an obscurely written word is the inclusion of an unfamiliar abbreviation. Holland v. Long & Bro., 57 Ga. 36(1). Rules to be applied in construing contracts are found in Code § 20-704, and others may be found in some of the decisions.

The true rule relative to the duty of the court to construe is asserted in Davis v. United, etc., Life Ins. Co., 215 Ga. 521(2), 111 S.E.2d 488: 'Construction of ambiguous contracts is the duty of the court, and it is only after application thereto of the pertinent rules of construction, and they remain ambiguous, that extrinsic evidence is admissible to explain the ambiguity.' To the same effect is McCann v. Glynn Lumber Co., 199 Ga. 669, 679, 34 S.E.2d 839, where it was asserted that '(T)here can be no ambiguity within the rule to which we have referred, unless and until an application of the pertinent rules of interpretation leaves it really uncertain which of two or more possible meanings represents the true intention of the parties.' To state it another way, although there is ambiguity in a contract it raises no jury question unless the ambiguity remains unresolved after application of all applicable rules of construction. This rule was applied in General Gas Corp. v. Carn, 103 Ga.App. 542, 546, 120 S.E.2d 156, all of the judges of the whole court concurring, save Chief Judge Felton, who dissented for another reason.

It does not follow that merely because there are two possible interpretations which might be employed in construing a contract the matter automatically becomes a question for the jury. If that were true the court would rarely, if ever, construe a contract as Code § 20-701 declares its duty to be. The role and function of a court is higher than that of a mere referee. If there has been a tendency to relegate it to that role it is because we have failed to recognize and apply the true role which the Supreme Court reasserted in Davis, supra.

'The construction of the written contracts was, of course, for the court, though factual issues were presented as to the meaning of certain technical words and ambiguous terms, such as 'pilot house' and 'shop drawings" (in a construction contract). R. P. Farnsworth & Co. v. Tri-State Construction Co., 271 F.2d 728, 733 (CCA 5, Ga.), cert. denied, 362 U.S. 941, 80 S.Ct. 807, 4 L.Ed.2d 770.

Now what are the pertinent rules to be applied here, and is there a remaining ambiguity after making application?

There is the matter of attendant and surrounding circumstances, and the lessor urged before the trial court and this court that consideration should be given the matter of a former lease between the parties on the same property, which had been executed several years previously and which had been terminated by the lessor for default in rental payments. The lease in question specifically provides that it 'supersedes' the former lease executed December 19, 1950, thus wholly supplanting it, rendering it obsolete and removing it as a matter affecting the rights of the parties. The former lease, no longer in effect, or its terms, does not constitute 'attendant and surrounding circumstances' nor does it appear that the present lease does not 'speak the whole contract.'

Words in the contract are to be afforded their usual and common signification, unless they are technical terms, or terms used in a particular trade or business. The disagreement here involves no technical or trade terms. The words are usual and ordinary ones, to be given their usual and ordinary meaning.

In the first sentence of Paragraph 7, the amounts of rental which the lessor is to receive are spelled out, viz., ground rent of $150 per month, and additionally the first $100 per month realized 'from any subleases and 50 percent of all monthly rentals realized over $100 under any subleases * * *.' The use of subleases in the plural is significant, as well as the use of the words 'all' in referring to the division of rentals realized over $100 per month from subleases. 'All monthly rentals realized over $100' can refer only to the aggregate receipts from all subleases. This is clearly made to appear from the additional provision in this paragraph requiring that the lessee pay in addition to the ground rent 'the first $100 per month realized from any subleases,' and 50 percent of the excess. If the provision for $100 per month were intended to apply, as contended by the lessor, to each and every sublease there would have been no limitation to the first $100 realized; rather it would have been simple and easy to have made the provision apply to each and every lease by adding those words after 'the first $100 realized from'. But it was not done and we cannot find that the parties so intended. While lessor contends that the word 'any' as used in this lease means 'each' or 'each and every' we find this insonsistent with the use of the plural 'subleases.'

2. Lease contracts are generally construed against the lessor. ¹ This rule is applied in substantially all of the jurisdictions (51 C.J.S. Landlord & Tenant § 232, p. 859; 32 Am.Jur. 133, Landlord & Tenant § 128), though we have been unable to put our hands on a case from either of the courts in this State stating it in these very words. However, it was applied by the Supreme Court in Epping v. Devanny, 28 Ga. 422; Deich v. Reeves, 203 Ga. 596, 48 S.E.2d 373, and by this court in Williams v. Bernath, 61 Ga.App. 350, 6 S.E.2d 184; Shiflett v. Anchor Rome...