Fuller v. Michigan Nat. Bank

• Decision Date: 09 March 1955
• Docket Number: No. 67,67
• Parties: Ted A. FULLER, Plaintiff and Appellee, v. MICHIGAN NATIONAL BANK, Defendant and Appellant.
• Court: Michigan Supreme Court

Page 771

68 N.W.2d 771

342 Mich. 92

Ted A. FULLER, Plaintiff and Appellee, v. MICHIGAN NATIONAL BANK, Defendant and Appellant.

No. 67.

Supreme Court of Michigan.

March 9, 1955.

McCobb, Heaney & Dunn, Grand Rapids, for defendant and appellant.

Sigmund S. Zamierowski, Grand Rapids, Charles L. Dutchess, Grand Rapids, of counsel, for plaintiff and appellee.

Before the Entire Bench.

BOYLES, Justice.

The sole question here for decision is, what is the fair rental value of certain premises during a 5-year extension of a written lease.

Plaintiff is the lessee of the ground floor and basement of a certain brick building in Grand Rapids now owned by the defendant as lessor. In 1948 plaintiff rented the premises here involved, from the thenowners, for a term of 5 years ending May 31, 1953, for a rental of $300 per month, under a written lease which contained the following option 'Landlord hereby grants to tenant an option for a lease for 5 additional years at a rent to be agreed upon, dependent on then existing conditions, but in any event not to exceed a 100% increase over the rent in this instrument provided.'

In March, 1953, the plaintiff notified the defendant of his election to exercise the renewal option but the parties were unable to reach an agreement as to what the rental should be for the extended term. Thereupon the plaintiff filed this bill of complaint in chancery in the circuit court in Kent county alleging that the defendant had refused to renew the lease except at a 100% rent increase, that a fair rental for the renewal term would be $300 per month, asking the court to determine the fair rental for the renewal term, and that the court decree specific performance of the lease.

Issue was joined, testimony taken, the court found that a fair rental would be $350 per month and decreed specific performance. The defendant appeals, and asks that the decree be set aside and one entered for specific performance fixing the fair rental value of the premises for the renewal period at $500 per month.

The defendant claims that the trial court in determining fair rental value erred by restricting its consideration to comparative rentals for business like the plaintiff's (restaurant and bar) and disregarded evidence of rental value of comparable premises in the area and also of fair return on investment. Decision hinges upon what construction should be given to the wording of the option which the owner granted to the tenant for 'a lease for 5 additional years at a rent to be agreed upon, dependent on then existing conditions.'

The lease was prepared by an attorney for the owners and in case of doubt or ambiguity must be resolved most rigidly against the party preparing it, in determining its legal effect. Lower v. Muskegon Heights Co-operative Dairy, 251 Mich. 450, 232 N.W. 181; Higbie v. Chase, 306 Mich. 577, syllabus 7, 11 N.W.2d 248; L. A. Walden & Co. v. Consolidated Underwriters, 316 Mich. 341, syllabus 5, 25 N.W.2d 248.

Three witnesses qualified as experts and testified as to fair rental value of this property. Two of them testified for the plaintiff--one said $275 per month, the...