J. E. Blank, Inc. v. Lennox Land Co.

• Decision Date: 20 July 1943
• Docket Number: 37647,37649
• Citation: 174 S.W.2d 862,351 Mo. 932
• Parties: J. E. Blank, Inc., Appellant-Respondent, v. Lennox Land Company, a Corporation, Respondent-Appellant
• Court: Missouri Supreme Court

174 S.W.2d 862

351 Mo. 932

J. E. Blank, Inc., Appellant-Respondent, v. Lennox Land Company, a Corporation, Respondent-Appellant

Nos. 37647, 37649

Supreme Court of Missouri

July 20, 1943

Reported at 351 Mo. 932 at 959.

Original Opinion of July 20, 1943, Reported at 351 Mo. 932.

Douglas C. J. All concur except Gantt, J., absent.

OPINION

DOUGLAS

On Motion for Rehearing.

Plaintiff through additional distinguished counsel, vigorously contends we have incorrectly analyzed Section VI wherein we rule it covers taxes levied "upon the income of the lessor represented by or derived from said rental." We took the quoted words from Section VI itself. Stripping away the alternatives and other language not pertinent to the issue before us, Section VI imposes on plaintiff the obligation for taxes thus: "Such sum of money as, under any law, shall be required to be paid because of the sum of the rentals received by lessor, by way of tax upon the income of the lessor represented by or derived from said rental, or by way of any other tax levied in the exercise of the power of taxation in any of its aspects without exception on account of the nature or extent of any such tax."

Plaintiff asserts Section VI comprehends but one tax only -- one in the nature of a "rentals" tax "irrespective of the form which such tax in collection might assume" and that an income tax upon the person of lessor based on its income even though such income is derived from the rental is in nowise included. To the writer the language of Section VI seems clearly to cover an income tax but because of divergent judicial views on this issue we have held it to be ambiguous.

The principle that an ambiguous contract will be given the construction placed upon it by the contracting parties has been expressed and followed many times in this State. See 7 West's Mo. Digest, "Contracts" Key number 170. In our principal opinion we have pointed out the Federman sublease, which supplied the form of the clause in the present sublease, was construed to cover income taxes of the same nature as the present federal income tax. The parties have given the present sublease the same construction and have done so annually for eleven years. Plaintiff has reimbursed defendant for income taxes throughout that period. When this sublease was entered into the present form of income tax was in force, the witholding tax charged directly against rentals had been repealed.

The principle of practical construction arising from the conduct of the parties is not subservient to the rule that an ambiguous lease is to be construed most strongly in favor of the lessee. Such rule of construction is generally recognized but has received only scant support in this State. Riesenberg v. Realty Co., 214 Mo.App. 43, 258 S.W. 23 supra; Amzi Realty & Building...