Giglio v. Saia

• Decision Date: 04 January 1926
• Docket Number: 25341
• Citation: 140 Miss. 769,106 So. 513
• Court: Mississippi Supreme Court
• Parties: GIGLIO v. SAIA. [*]

106 So. 513

140 Miss. 769

GIGLIO v. SAIA. ^[*]

No. 25341

Supreme Court of Mississippi

January 4, 1926

Division A

SPECIFIC PERFORMANCE. Specific performance of renewal agreement in lease of property on terms to be agreed upon between parties cannot be enforced.

The specific performance of a renewal agreement in a lease of property, "upon such terms and for the payment of such rent as may be agreed upon between the parties," cannot be enforced in a court of equity, for the reason that it does not specify the terms on which the lessee has the right to renew the lease.

HON. C L. LOMAX, Chancellor.

APPEAL from chancery court of Bolivar county, second district, HON C. L. LOMAX, Chancellor.

Suit by C. J. Giglio against Mary Saia for specific performance of a contract. From a decree dismissing the original bill, and dissolving an injunction issued thereon, complainant appeals. Affirmed in part, and reversed in part.

Decree affirmed in part; reversed in part.

E. O Sykes, for appellant.

The lease in this case has been construed by this court to be a valid and binding one in the case of Giglio v. Woollard, 126 Miss. 6. This lease expressly states that, "party of the second part is to have the right and privilege of renting said store for another period of five years at the termination of this contract, upon such terms and for the payment of such rent as may be agreed upon between the parties hereto at the time, necessary repairs to be made by the party of the first part."

The authorities all agree that a grant is to be construed most strongly against the grantor and in favor of the grantee. Applying this rule, this lease must be construed most strongly against the appellee and in favor of the appellant.

The first thing to be considered is whether or not this clause is a valid and binding one under which the appellant is entitled to a renewal or an extension of the lease. There could be no question of its validity, had this clause permitted the renewal or extension upon the same terms and conditions as the old lease. All the authorities agree as to this.

The authorities, however, are divided upon the question as to the right to the specific performance of a contract where the parties have to agree upon the rental. It is submitted that our court is in accord with those authorities which permit the agreement to be enforced on the broad doctrine that, "That is certain, which can be rendered certain--'Id certum est quod certum reddi potest.'" We submit that, in this case, the terms referred to mean those general terms appertaining to customs generally applicable to that character of business; and the rent to be agreed on means a reasonable rent at the time the contract is renewed; and if the parties fail to agree upon this rent, a court of chancery will make them agree upon a reasonable rental. A recent case from another state similar to this case; which fully discusses these questions, and, which we submit, lays down the correct rule, is that of Young v. Nelson, 121 Wash 285, 209 P. 515, 30 Am. L. Rep. 568. Other cases sustaining our contention are Dreyfus v. Oil Co., 142 La. 564, 77 So. 283; Lagurmis v. Gerard, 190 N.Y.S. 207. It is our contention, however, that this state has aligned its decisions with that of the Washington court. I think this question is settled by Pugh v. Gressett, 101 So. 691. See also 13 C. J., page 271; Joy v. City of St. Louis, 138 U.S. 1, 8, 43, 11 S.Ct. 243, 34 L.Ed. 843; Miller v. Kendig, 55 Iowa 174, 7 N.W. 500; Worthington v. Beeman, 91 F. 232, 33 C. C. A. 475; Burton v. Wells, 30 Miss. 688.

The next question is, did this appellant in good faith attempt to take advantage of this clause in the contract? Taking the testimony of the appellee alone, it shows absolutely that in December, before the old lease expired in January, the appellant began to try to renew the lease, and, furthermore, that the appellee then and at all times has declined and refused to renew the lease or rent the building for a period longer than one year, directly in the face of, and contrary to her solemn contract. The appellant did everything within his power to comply with the contract and have the appellee execute a new written lease for a period of five years. The appellee without any excuse whatever declined to do so.

The opinion of this court in Lumber Co. v. Norton, 111 Miss. 720, is very much in point. In that case the court dealt with the question of the difference between an option of renewal," and "option of extension." This question is not of importance in the case at bar for the reason that here the appellant gave notice in every way, that it was his intention to renew or extend, and was prevented from exercising his option by the arbitrary conduct of the appellee. In the Norton case, supra, the court holds that the right of a lessee to renew or extend a lease is a substantial and valuable right and a part of the original lease. We submit that we cannot be deprived of this valuable right by the arbitrary conduct of the appellant as is evidenced by this record. In the Norton case the court cites with approval Andrews v. Creamery Co., 96 A. S. R. 412. We also ask the court to read again this Andrews case, because in that case the negotiations for a renewal or extension were verbal and very similar to that in the instant case.

We submit that a court of equity will take care of the right of this appellant and require the appellee to specifically perform this solemn contract.

Forrest G. Cooper, for appellee.

The appellant seeks to have this court specifically perform a lease contract of five years, beginning January 1, 1924, and ending December 31, 1929. He has no written contract, but is standing upon an oral agreement and upon rights which accrued to him, as he claims, from the old lease contract which terminated December 31, 1923, giving a right to a new contract under certain conditions. He seeks to excuse the absence of a written contract apparently because of the claim that he was lulled into a sense of security by the statement of R. Danna that such was not necessary. He also contends that a written contract is not necessary because of the wording of the old lease contract.

Did the right of renewal in the old contract require a new lease contract? The old contract gave the tenant the privilege of a new contract if at its termination the tenant and the landlord would make a new contract, would agree upon terms, new stipulations, amount of rent, how the property was to be used, limitations upon subleasing and the hundred other stipulations frequently in lease contracts. In other words, the right to further use of the premises depended upon the landlord and tenant making another contract.

Most of the contracts with privileges of extension or renewal give the right to the tenant to renew for a definite period either for the same rents or upon a definitely agreed rental, or a definite mode of ascertaining the new rent, such as by arbitration. A contract of this kind for five years with additional privilege of five years is really a ten-year contract, which can be ended at five years by the tenant, but which he can hold for ten years if he wants it. The contract under review cannot be considered in that class. It is a five-year contract and with the additional right to a new contract for five years if the parties will make a new contract for five years. At the very most they made a new contract for one year.

There is a clear distinction between a privilege to extend a lease contract and an option to renew such a contract. In the first class of contracts the tenant may merely remain in possession and continue to pay rents and does not need a new contract. In the latter class of contracts the tenant has the privilege of a new contract and either something definite must be done to establish rights to the new period or a new contract must be made. If the contract under review gives any substantial rights at all it merely gives the right to a new contract and requires a new contract to enable the tenant to remain in possession. We believe very strongly that this new contract of five years should have been in writing to be binding, but will not burden the court with argument along this line because we feel it unnecessary. See Howard v. Tomicich, 81 Miss. 703, 33 So. 493.

In Crenshaw Gary Lumber Co. v. Norton, 111 Miss. 720, 72 So. 140, L. R. A. 1919E, 1227n, the court was considering a seven-year contract which contained a stipulation that it might be extended for another seven years upon the same terms. Of course, the court held that this was merely a fourteen-year contract which the tenant might abandon at seven years. The most hotly contested and the best reasoned lease contract case I have found is that of Masonic Lodge v. Presbyterian Church, 103 Miss. 130, 60 So. 66. The only difference between the "privilege of renewal" clause in that case and the one in our case is that in the Church case the length of time must be agreed upon in a new contract "at the will and pleasure of the Lodge," whereas in the Saia case a new contract "upon such terms and for the payment of such rent" as may be agreed upon.

We say this court has not aligned itself with those authorities holding that such a privilege gives the right of specific performance. We have found no case supporting that view. And most of those cited by counsel do not bear him out. He admits his view is contrary to the weight of authority.

Since the act of agreeing upon a rental requires the exercise of volition, unenforceable in law, a covenant in a lease for the renewal for a term of fifty years upon such rents as might be agreed upon between the parties is nugatory and confers no substantial right upon either party. Sammis v Huntington (19...