Johnson v. Kindred State Bank

• Decision Date: 28 September 1903
• Citation: 96 N.W. 588,12 N.D. 336
• Court: North Dakota Supreme Court

96 N.W. 588

12 N.D. 336

JOHNSON ET AL. v. KINDRED STATE BANK

Supreme Court of North Dakota

September 28, 1903

Appeal from District Court, Cass county; Pollock, J.

Action by C. M. Johnson and George Halland against the Kindred State Bank. From a judgment of dismissal, entered for defendant after an order sustaining a demurrer to the complaint plaintiff appeals.

Affirmed.

A T..Cole, for appellants.

Parol evidence is admissible to explain a written contract which is equally capable of two constructions. Ripon College v Brown, 68 N.W. 837. To vary elements of contract admissible, Ingersoll v. Truebody, 40 Cal. 603. If equally susceptible of two constructions, Lee et al. v. Cravens et al., 48 P. 159; McPhee et al. v. Young et al., 21 P. 1014; Brown v. Markland, 52 P. 579; covenant of lessee to insure, binding. Damages, amount of loss, Jacksonville M. P. Ry. & Nav. Co. v. Hooper et al., 160 U.S. 514, 40 L.Ed. 515. On interpretation of contract and parol evidence the following are authorities: Knight v. Worsted Co., 2 Cush. 271; Erie Cattle Co. v. Guthrie et al., 44 P. 984; Lee v. Butler, 46 N.E. 52; Hendricks v. Crowley, 31 Cal. 472; Miller, Clayton Electric Co. v. McKeesport & J. W. R. Co., 179 Pa. 350, 36 A. 287.

Notice of increase or decrease of rent on holding over after expiration of year, does not vary the terms of lease but carries them with it. Re Canada Coal Co., 27 Ont. Rep. 151; Rand v. Purcell, 58 Ill.App. 228. Parol evidence is admissible to show intent as to provisions, not to wipe them out. McKinstry v. Babcock, 26 N.Y. 378; Johnson et al. v. Bratton et al., 70 N.W. 1021; Seymour v. Bowles, 172 Ill. 521, 50 N.E. 122; Tracy v. Albany Ex. Co., 7 N.Y. 472; Bradley v. Slater, 70 N.W. 258; Manf'g Furn. Co. v. Kremer et al., 64 N.W. 528; Machine Co. v. Faulkner, 64 N.W. 163; Pool v. Philips, 167 Ill. 432, 47 N.E. 753; Hammond v. Martin, 40 S.W. 347; White v. Rice; 70 N.W. 1024. An agent disregards specific instructions at his peril; if he adopts his own course and loss to his principal ensues, he is liable, although he used reasonable diligence, Heinemore et al., v. Heard et al., 50 N.Y. 27; Butts Adm. v. Phelps, 79 Mo. 302; and he who covenants is more strongly bound, Whitney v. Mer. Union Exp. Co., 104 Mass. 152; Fuller v. Ellis, 39 Vt. 345; Milwaukee Co. v. Hacker, 21 Wis. 613; Sawyer v. Mayhew, 51 Me. 389; Thompson v. Stewart, 3 Conn. 172, 8 Am. Dec. 168; Austill v. Crawford, 7 Ala. 355; Short v. Skepwith, 1 Brok. (U.S. ) 103. The breach of contract is the gist of the action and must be averred. Grant v. Sheerin, 84 Cal. 197, 23 P. 1094; Wheeler, etc., Mfg. Co. v. Worrall, 80 Ind. 297; Wilson v. Clarke, 20 Minn. 367; Rich v. Calhoun, 12 So. Rep. 707; Tracy v. Tracy, 59 Hun. (N.Y.) 1; Phipps v. Hope, 16 Oh. St. 586; Holman v. Criswell, 13 Tex. 38; White v. Romans, 29 W.Va. 571.

In the case at bar it was necessary to state the facts constituting the covenant and breach thereof, and so doing it was proper to plead interpretation of lease. Holding over is subject to all of the covenants of the lease. Salisbury v. Hale, 12 Pick. 416; Weston v. Weston, 102 Mass. 514; Schyler v. Smith, 51 N.Y. 309; Finney v. St. Louis, 39 Mo. 177; Bonney v. Foss, 62 Me. 248; Bacon v. Brown, 9 Conn. 339; Moore v. Beasley, 3 Oh. 294; Bradley v. Slater, 70 N.W. 258; Kollock v. Scribner, 73 N.W. 776; Dutton v. Gale Mnf. Co., 43 Hun. 198; Scott v. Beacher, 52 N.W. 20; Roley v. Crabtree, 72 Ill.App. 581.

R. M. Pollock, for the respondents.

There is no holding over and no renewal of any lease in the transaction between the parties. The lease itself provides for a tenancy of more than one year.

There is no ambiguity about the expression in the lease. Where there are ambiguous expressions extraneous evidence may be employed to interpret them; but the court cannot impart into the contract, or impress upon it anything not included in it. I Green Ev. section 175, 277; Dent v. No. Am. Steamship Co., 49 N.Y. 390; Farmers Loan & Trust Co. v. Com. Bank of Racine, 15 Wis. 424.

OPINION

COCHRANE, J.

The complaint alleges the incorporation of defendant; that plaintiff Johnson is the owner and Halland the mortgagee of the leased premises; that on June 21, 1900, plaintiffs and defendant entered into a written lease of the described property, a copy of which is attached to the complaint as "Exhibit A," and made a part of the complaint; that defendant was required by the terms of this written lease to write $ 400 insurance on the building on the leased premises; that it was agreed and understood between the parties that said insurance should be maintained and kept in force by defendant in some company for which it was agent as long and for the full time during which the lessee remained in possession of the premises under the terms of the lease; that on May 28, 1901, while defendant was occupying the premises under the terms of the lease, the building was totally destroyed by fire; that prior to its burning, defendant negligently permitted the insurance thereon to lapse and cease, "against the covenant and agreement of said defendant with the plaintiffs," and plaintiffs were damaged thereby in the sum of $ 400; that defendant elected to and continued to remain in possession and use of the leased premises after the expiration of the first year, under the terms of the lease, and was in possession at the time of the fire; that plaintiffs demanded before suit that defendant pay them $ 400 because of the destruction of the building and the loss incurred by and on account of the negligence and failure of said defendant to keep said building insured, as aforesaid, and by reason of the fact that said defendant has broken and violated its express covenant as to insurance. Exhibit A, referred to in the second paragraph of the complaint, and attached to it, in its formal part recites its making on the 21st day of June, 1900, the description of the property, and its pertinent part read as follows: "To have and to hold the above-rented premises unto the said lessee, its successors and assigns, for and during the full term of one year from and after the 15th day of May, 1900, and as many weeks, months, or years after May 15, 1901, as said Kindred State Bank may desire from time to time; and the said lessee agrees to and with the said lessor to pay as rent for the above-mentioned premises the sum of $ 96, payable May 15, 1901, and as rent for the time building is used after the expiration of one year it is agreed that the lessee shall pay at the rate of $ 8 per month, said rent to be paid to George Halland for and during the full term of this lease. It is hereby further agreed that said Kindred State Bank, as agents for C. M. Johnson and George Halland, shall have certain repairs and painting done on building, as agreed with C. M. Johnson this day, and deduct the actual cost of the same from the rent when paid; also to write $ 400 insurance on building, and deduct from rent." To this complaint defendant demurred, and, as grounds therefor, specified that the complaint did not state facts sufficient to constitute a cause of action. The demurrer was sustained by the trial court, and an order made directing the entry of judgment for the dismissal of plaintiff's action, with costs. This appeal is from the judgment.

The action is founded upon the written lease, a copy of which is made a part of the complaint by reference, and its plain purpose is to recover damages for a breach of the stipulation therein "to write $ 400 insurance on building, and deduct from rent." The terms of this writing will control in determining the sufficiency of the complaint as against demurrer in every particular where the terms of the lease do not sustain the allegations as to its contents; and where the averments are contradictory of or inconsistent with it, they will be disregarded. Willard v. Davis (C. C.) 122 F. 363; Freiberg v. Magale (Tex. Sup.) 7 S.W. 684. To state a cause of action, therefore, this complaint should allege a breach of the contract to write $ 400 insurance upon the building, and consequent damages. This is not done. The facts set forth as a breach are that, prior to the burning of the building, defendant permitted the insurance thereon to lapse and wholly cease, against the covenant and agreement of defendant. There is no covenant in the lease that the insurance was to be maintained by defendant for any time, or that it was to be rewritten. It was simply to write it. Consequently, no breach of contract is pleaded. But appellant urges that there is a latent ambiguity in the insurance clause of this lease, in that the contract is silent as to the time for which the insurance written should run; and he has attempted to supply the time by alleging an agreement between the parties that the insurance should be written and kept in force by defendant for the full time it remained in possession of the premises under the lease, and that the covenant to write $ 400 insurance was a continuing covenant. We think that, when suing upon a contract which is ambiguous or uncertain in its provisions, when applied to the subject-matter of litigation, the pleading should so state, and by averment point out wherein plaintiff claims the contract to be uncertain, and put some definite construction on it by way of averment. Durkee v. Cota, 74 Cal. 313, 16 P. 5. Under the pretense of construing a written contract, new terms cannot be added to it. The writing is only the outward and visible expression of the meaning of the parties to it, and no other words can be added to, or substituted for, those used. The duty of the court is to ascertain, not what the parties may have secretly intended, as contradistinguished from what their words expressed, but what is the meaning of the words they u...