Lonergan v. Connecticut Food Store, Inc.

• Decision Date: 18 March 1975
• Citation: 357 A.2d 910,168 Conn. 122
• Court: Connecticut Supreme Court
• Parties: Evelyn P. LONERGAN v. CONNECTICUT FOOD STORE, INC.

Page 910

357 A.2d 910

168 Conn. 122

Evelyn P. LONERGAN v. CONNECTICUT FOOD STORE, INC.

Supreme Court of Connecticut.

March 18, 1975.

George S. Linardos, Hartford, with whom, on the brief, was Francis R. Sablone, Jr., Hartford, for appellant (defendant).

Herbert A. Lane, Willimantic, with whom, on the brief, was Jackson T. King, Jr., Norwick, for appellee (plaintiff).

Before HOUSE, C.J., and MacDONALD, BOGDANSKI and LONGO, JJ.

LONGO, Associate Justice.

The plaintiff, Evelyn P. Lonergan, is the owner of a building, located at 1166 Main Street in Willimantic, consisting of two separate units rented as retail stores. In April, 1962, her husband began negotiating with the defendant's district representative for the leasing of the store that was vacant. Her husband, now deceased, informed her of the negotiations, and she authorized him to enter into a lease on her behalf for a reasonable period of time of approximately five years.

The written lease was prepared by the defendant. The lease which has been made a part of the record, was for a term of five years beginning May 1, 1962. Paragraph 14 of the lease, however, contained the following provision for renewal: 'Upon the expiration of the term of this Lease, the same, including this clause, shall automatically be extended for a period of one year and thence from year to year, unless the Lessee shall give notice to the Lessor of termination at least sixty (60) days before the end of the original term or any extension thereof.'

The plaintiff, claiming that the lease did not create a right to perpetual renewal in the lessee, on numerous occasions demanded that the defendant vacate the premises upon the termination of the five-year term on April 30, 1967. Nonetheless, the defendant occupied the premises from the date of the lease and indicated no willingness to vacate voluntarily.

The action in four counts was instituted by the plaintiff on December 3, 1969, claiming possession of the premises, damages and cancellation of the lease. The case was referred to Hon. Joseph E. Klau, state referee, who, upon a hearing, found the issues for the plaintiff on all counts and granted all of the relief sought, including $9485 in damages. The defendant has appealed from the judgment.

I

The defendant has assigned error in the conclusion of the referee, hereinafter refereed to as the court, that the language of the lease could not be interpreted as creating a right in the lessee to renew the lease perpetually. The court's conclusions are to be tested by the finding. Brockett v. Jensen, 154 Conn. 328, 332, 225 A.2d 190. The conclusions reached by the court must stand unless they are legally or logically inconsistent with the facts found or unless they involve the application of some erroneous rule of law material to the case. Johnston Jewels, Ltd. v. Leonard, 156 Conn. 75, 79, 239 A.2d 500.

Although this is the first occasion this court has had to rule on the issue, it is well settled in most other jurisdictions that, absent statutory provision to the contrary, the right to perpetual renewal of a lease is not forbidden by the law, either upon the ground that it creates a perpetuity or a restraint on alienation or upon any other ground, and such provisions, when properly entered into, will be enforced. Nakdimen v. Atkinson Improvement Co., 149 Ark. 448, 456, 233 S.W. 694; Williams v. J. M. High Co., 200 Ga. 230, 236, 36 S.E.2d 667; Ehrhart v. Spencer, 175 Kan. 227, 232, 263 P.2d 246; In re State Highway Commissioner, 372 Mich 104, 108-9, 125 N.W.2d 482; Lloyd's Estate v. Mullen Tractor & Equipment Co., 192 Miss. 62, 75-76, 4 So.2d 282; Blackmore v. Boardman, 28 Mo. 420, 426; Burns v. City of New York, 213 N.Y. 516, 520, 108 N.W. 77; see also 61 Am.Jur.2d, Perpetuities and Restraints on Alienation, § 41; 70 C.J.S. Perpetuities § 11; annot., 31 A.L.R.2d 607, 622-23. We acknowledge the clear weight of authority as stating the correct view of the law on this issue.

Courts do not favor perpetual leases, however; thus a provision in a lease will not be construed as conferring a right to a perpetual renewal 'unless the language is so plain as to admit of no doubt of the purpose to provide for perpetual renewal.' Thaw v. Gaffney, 75 W.Va. 229, 232, 83 S.E. 983, 985; see also McLean v. United States, 316 F.Supp. 827, 832-34 (E.D.Va.); and see, generally, cases collected in the annotation in 31 A.L.R.2d 607, 623-24 and supplement. Furthermore, '(a) perpetuity will not be regarded as created from an ordinary covenant to renew.' McLean v. United States, supra, 829. Rather, '(t)here must be some peculiar and plain language before it will be assumed that the partie sintended to create it.' Winslow v. Baltimore & O.R. Co., 188 U.S. 646, 655, 23 S.Ct. 443, 446, 47 L.Ed. 635.

In this connection, we have stated that in determining the intention of the parties to a lease, '(t)he controlling factor is the intent expressed in the lease, not the intent which the parties may have had or which the court believes they ought to have had.' Ingalls v. Roger Smith Hotels Corporation, 143 Conn. 1, 6, 118 A.2d 463, 465; Perruccio v. Allen, 156 Conn. 282, 285, 240 A.2d 912; Hansel v. Hartford-Connecticut Trust Co., 133 Conn. 181, 194, 49 A.2d 666; Colonial Trust Co. v. Hilton, Inc., 111 Conn. 77, 83, 149 A. 513. Rather, 'the lease must be construed as a whole and in such a manner as to give effect to every provision, if reasonably possible.' Ingalls v. Roger Smith Hotels Corporation, supra; Perruccio v. Allen, supra; Geyer v. Lietzan, 230 Ind. 404, 409, 103 N.E.2d 199.

The language in paragraph 14 of the instant lease, insofar as it purports to create in the lessee the right of perpetual renewal, is far from clear. It states that, upon the expiration of the original five-year term, the lease, 'including this clause, shall automatically be extended for a period of one year and thence from year to year, unless the Lessee shall give notice to the Lessor of termination at least sixty (60) days before the end of the original term or any extension thereof.' (Emphasis added.) Nowhere in the provision appear any of the words customarily used to create a perpetual lease, such as 'forever.' 'for all time,' and 'in perpetuity,' words whose presence or absence in a lease is of considerable significance to a court in deciding whether a right of perpetual renewal was intended by the parties. Geyer v. Lietzan, supra; McLean v. United States, supra, 316 F.Supp. 832; Kilbourne v. Forester, 464 S.W.2d 770, 773 (Mo.App.); annot., 31 A.L.R.2d 607, 624-25. It is true that words in paragraph 14 emphasized above presume to characterize the successive renewals of the lease as self-executing (i.e., 'automatic'). But such language is construed as creating a perpetual lease only when the renewal period to which it refers is for a specific term, usually as long as that provided in the original lease. See, e.g., In re State Highway Commissioner, 372 Mich. 104, 109, 125 N.W.2d 482. In the instant lease, these words are used in combination with language describing the renewal period as one 'from year to year.' Where words of perpetuity are absent from the lease, courts generally do not construe a clause which establishes a renewal period as one merely 'from year to year' as expressing an intention of the parties to create a perpetual lease. McLean v. United States, supra, 316 F.Supp. 833-34; Waldrop v. Siebert, 286 Ala. 106, 109, 237 So.2d 493; Gould v. Harley, 215 Mich 234, 237, 183 N.W. 705; Hallock v. Kintzler, 142 Ohio St. 287, 289, 51 N.E.2d 905.

Moreover, neither paragraph 14, nor any other clause in the lease, provides for escalation of rent beyond the $175 per month agreed upon by the parties in paragraph 3. Of course, failure to include an escalation clause is not fatal; perpetual renewal upon the same terms as the original lease is an enforceable option. Vokins v. McGaughey, 206 Ky. 42, 43, 46, 266 S.W. 907; In re State Highway Commissioner, supra; Tipton v. North, 185 Okl. 365, 368, 92 P.2d 364. But an agreement to that effect is of such critical importance to parties creating a perpetual lease that it is generally stipulated in the same provision as that which creates the right in the lessee to perpetual renewal. Vokins v. McGaughey, supra; In re State Highway Commissioner, supra; Tipton v. North, supra. In the present lease, the lessor agreed, in paragraph 8, to repair the demised buildings and to repair and restore them in the event of partial or total destruction; in paragraph 12 the lessor agreed to pay all taxes, charges and assessments, including charges relating to the use of water. The absence of an escalation clause to provide a source of revenue from which the lessor might meet her continuing obligations under these two paragraphs strongly suggests that the creation of a right to perpetual renewal was not the intention expressed by the parties in paragraph 14. See McLean v. United States, supra.

A review of the lease in its entirety establishes that there are sufficient facts to support the court's conclusion that the instrument does not create a right in the lessee to renew the lease perpetually. However, which the language of paragraph 14 did not clearly and unambiguously express an intention to create a perpetual lease, it specifically provides that the lease should be extended upon the expiration of the five-year term 'for a period of one year and thence from year to year.' In some cases, where the clause in question provides for renewal or extension only 'from year to year,' courts have concluded that the lessee does not thereby have a right to even one renewal but rather that what results is a tenancy from year to year terminable by either party upon proper notice. McLean v. United States, supra; Tischner v. Rutledge, 35 Wash. 285, 289, 77 P. 388. Such an approach is inappropriate here, since paragraph 14 is precise in providing not simply that the lease should be extended '- from year...