Laiben v. Department of Revenue
| Decision Date | 10 October 1978 |
| Docket Number | No. 60273,60273 |
| Citation | 572 S.W.2d 173 |
| Parties | Richard L. LAIBEN, Doris A. Laiben, J. Frank Laiben and Rita J. Laiben, Appellants v. DEPARTMENT OF REVENUE of the State of Missouri, A. Gerald Reiss, Director of Revenue, and J. Neil Neilson, Commissioner of Administration for the State of Missouri, Respondents. |
| Court | Missouri Supreme Court |
Victor Tell Neff, Barry, Neff & Gallaher, Jefferson City, for appellants.
John D. Ashcroft, Atty. Gen., Bruce E. Anderson, Asst. Atty. Gen., Jefferson City, for respondents.
This appeal, involving construction and validity of a real estate lease, turns on two questions: (1) whether the lease provided for an initial term of six or eighteen months; (2) if for eighteen months, whether the execution of a lease for a term of more than one year was beyond the constitutional powers of State agents to contract and thus void.
The trial court held that the lease provided for an initial term of only six months and that defendants, having given the prescribed notice to terminate, were authorized to vacate the premises without liability for further payment of rents. We affirm.
The cause was submitted on a stipulation of the parties which included the following facts pertinent to the issues: On December 11, 1972, the owners 1 of a building in the City of St. Louis entered into a lease with the Missouri Department of Revenue (Department) for office space, providing for what is described as an "initial term" of six months beginning January 1 and ending June 30, 1973. More than sixty days prior to June 30, 1973, lessee notified lessor of its intention to terminate at the conclusion of the term and pursuant to that notice, vacated the premises. After June 30, 1973, the Department secured other offices in the St. Louis metropolitan area for the operation of its business formerly conducted on plaintiffs' premises and it is conceded that the General Assembly appropriated adequate funds for the rental and leasing of properties for the operations of the Department during fiscal 1973-74. Meanwhile the lessors diligently, but without success, sought to obtain other lessees for the vacated premises during the period July 1, 1973 to June 30, 1974, and it is for the rents from this period they now make claim.
While the lease contains fourteen paragraphs, the controverted provisions are found in five paragraphs, which we have numbered for convenient reference in the order they appear in the lease:
(2)
The Lessor leases unto the said Lessee the following described premises located at Suite 100-4401 Hampton Ave. (63109) State of Missouri, to wit: first floor (street grade entry level) professional office suite including existing teller cages and lobby counters containing approximately 6311 square feet on the South side of the main entrance lobby and a supplemental 1184 square feet on the lower level having direct private stair access from the first floor. Said suite has two private office rooms, two records vault areas and restroom facilities on the first (ground) floor and one record vault and private office area constructed in the lower level with access to general restroom and stair areas. Existing carpeting in the first (ground) floor to be cleaned and divided partition wall to be erected (at Lessor expense) behind teller cages to provide private general office area on the west side of premises. (Underscoring in the original.)
(3)
To have and to hold said premises with their appurtenances for the Initial term of this Lease which shall be for a period of 6 months, beginning Jan. 1st 1973 and ending June 30th, 1973 for the monthly rental of Two Thousand Five Hundred Dollars, payable on the last day of each month during the said term. (Underscoring, except for the phrase "initial term of this Lease," appears in the original.)
(4)
To have and to hold said premises with their appurtenances for the yearly term beginning July 1st, 1973 and ending June 30th, 1974 for a yearly rental of Thirty Thousand Dollars ($30,000), payable at the rate of Two Thousand Five Hundred Dollars, per month on the last day of each month during the said term. * The premises contain Approximately 7495 square feet. 2 (Underscoring in the original.)
(5)
The Lessor hereby grants to the Lessee the option to renew this Lease for Five (5) successive one year periods, on the same rental terms and conditions provided herein. If the Lessee remains in the said premises after the period for which they are let, or any extension thereof, or the Lessee shall fail to notify the Lessor of his intention to vacate these premises, it shall be considered as evidence that said Lessee has exercised its option to renew this Lease for a one year period. The Lessee agree (sic) to notify the Lessor in writing not less than sixty (60) days prior to the expiration of the period for which the premises are let, if it intends to vacate the premises. A letter from the Director, Department of Revenue, stating the said intent to vacate, sent by registered mail, return receipt requested, mailed to Alfred E. Long, 2319 Hampton Ave., St. Louis, Missouri 63139 (sic). 3
(7)
(T)his lease shall not be binding upon the Lessee unless and until general appropriations have been made by the Missouri Legislature for payment of rental on behalf of the Lessee for The fiscal period embracing the term of, renewal or extension of this Lease. (Emphasis added.)
Although the parties press conflicting views as to the meaning of the lease, curiously both contend that the language of the lease is not ambiguous, but instead argue that the lease is merely less than artfully drawn. This ignores the fact that the term "ambiguous" means a susceptibility to two or more meanings as well as a vagueness of meaning, First National Bank of Malden v. Farmers New World Life Ins. Co., 455 S.W.2d 517, 522 (Mo.App.1970); Tenney v. American Life & Accident Ins. Co., 338 S.W.2d 370 (Mo.App.1960), and clearly this lease is rife with patent ambiguities.
We find that the trial court was justified in concluding that the language of the lease permitted the Department, on timely notice given, to terminate the tenancy at the end of the Initial six month term. 4 This conclusion rests in part on the fact that paragraphs # 3 and # 4 each describe a separate term of lease. Paragraph # 3, by its express language, sets forth an "initial term" of six months, and the term provided in paragraph # 4 is described by the general expression, "yearly term." Each period or term thus placed in separate paragraphs was accompanied by its corresponding schedule of rental payments. Other lease provisions comport with our interpretation of the lease.
Paragraph # 4 is a telling indication of the parties' intentions as to the length of each term granted in the lease. It speaks of "The fiscal period embracing the term of, renewal or extension of this lease." (Emphasis ours.) The fiscal period for Missouri, as provided by law, is July 1 to June 30 of the year following. § 33.110, RSMo 1969. The language of the lease ties each term to a fiscal year and by employing the phrase "embracing the term of," necessarily contemplates terms, renewals or extensions not in excess of 12 months. The first or "initial term," albeit for only the final six months of fiscal 1972-73, was linked to and embraced by the State's fiscal period, July, 1972, through June, 1973. Stated otherwise, it appears the parties intended that the initial term of the lease and any renewal or extension thereof be confined within Missouri's fiscal periods, and the obligation of the Department for the payment of rents be similarly restricted.
Moreover, while not necessary to our holding, it may reasonably be argued that this language reflects a concern for the provisions of art. IV, § 28 of the Missouri Constitution 5 and of this Court's decision in White v. Jones, 352 Mo. 354, 177 S.W.2d 603 (1944). There it was held that § 9265, RSMo 1939 6 (since repealed), forbade state eleemosynary institutions from entering into a lease for six years because the lease created a "debt" for which at the time no adequate appropriation existed. Consequently, the lease was void Ab initio. The drafter of the lease at bar may have considered the relevant language of art. IV, § 28 sufficiently similar to the proscription of § 9265 to warrant inserting the provision concerning appropriations by the General Assembly during the state's annual fiscal periods, but whatever the subjective consideration of the drafter, the "terms" or "periods" of...
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