Oriental Refining Co. v. Hallenbeck, 16562

• Decision Date: 21 January 1952
• Docket Number: No. 16562,16562
• Citation: 240 P.2d 913,125 Colo. 77
• Parties: ORIENTAL REFINING CO. v. HALLENBECK.
• Court: Colorado Supreme Court

Page 913

240 P.2d 913

125 Colo. 77

ORIENTAL REFINING CO. v. HALLENBECK.

No. 16562.

Supreme Court of Colorado, en Banc.

Jan. 21, 1952.

Rehearing Denied Feb. 11, 1952.

Max P. Zall, Denver, for plaintiff in error.

Bernard F. Maloy, James D. Carter and Patricia H. Maloy, all of Denver, for defendant in error.

CLARK, Justice.

The parties to this cause will herein be designated as they appeared in the trial court, where defendant in error was plaintiff and plaintiff in error was defendant.

The action is one for recovery of rental, allegedly past due, pursuant to the provisions of a written lease of property owned by plaintiff and located in the City and County of Denver. The lease is on a printed form commonly used, bears date the 6th day of November, 1947, and was to run for a period of three years from and including the 1st day of December, 1947, at an agreed rental of $12,600, payable in installments of $350 per month. It includes the usual provisions concerning the keeping in repair of improvements upon the property and the maintenance of buildings and structures, with covenants against the commission of waste and similar provisions. Specifically, with respect to the payment of rental, by the terms of the lease it was mutually agreed that if the premises be left vacant and the rent unpaid, the lessor might 'without terminating this lease, retake possession of said premises and rent the same * * * and said lessee shall be liable for the balance of the rent herein reserved until the expiration of the term of this lease.' It was further agreed that if the rent or any part thereof shall be in arrears, or if the lessee should default in any of the covenants or agreements therein contained to be kept and performed by it, the lessor might declare the term of the lease ended and repossess said premises. Near the end of the printed form in a blank space was inserted in typewriting the following: 'This lease is subject to the terms of a rider attached hereto and made a part hereof. The Lessee also agrees to give Six (6) months' possession in case the Lessor should at any time during the term of this lease sell the property.'

Under the first paragraph of the rider, above referred to, lessee was granted an option to renew the lease upon the same terms for an additional three-year period, and, likewise, an option to purchase the property at any time during the original term or any extension thereof. The second and remaining paragraph of the rider is particularly pertinent here as it contains the substance of the basis of this entire controversy. It reads as follows: 'The lessee has paid the lessor Seven Hundred Dollars ($700.00) covering the first month's rental under the terms of said lease and Three Hundred and Fifty Dollars ($350.00) as a guaranty for the faithful performance of said lease by the lessee and upon the failure of the lessee to faithfully perform the lessor shall be entitled to forfeit of said Three Hundred and Fifth Dollars ($350.00) and retain the same as liquidated damages. If the lessee has faithfully performed said terms of said lease the Three Hundred and Fifty ($350.00) Dollars to be applied on the last month's rent under the terms of the lease or any extension thereof under the option granted herein.'

Pertinent undisputed facts are that defendant, as lessee, took possession of the major portion of said premises under its lease at or about the time of its effective date, and retained such possession until January, 1949, at which time it notified plaintiff that it was vacating the premises and tendered rental for the month of January as final payment. Plaintiff declined to accept the return of the premises or to acknowledge that the lease was terminated and demanded payment of rental, which defendant refused.

Throughout the several months of defendant's occupancy of the premises, plaintiff had continued to keep certain of his property there also, and for this purpose had the use of a portion of the land and structures covered by the lease. Conflict occurs in the evidence as to this continued use of a portion of the premises by plaintiff, it being asserted on his behalf that such use on his part was by the approval and with full consent of defendant, amounting to agreement; whereas defendant insists that it did not so agree and that plaintiff simply failed to move out and vacate to it the whole of the premises leased. This continued use of a portion of said leased premises by plaintiff is the basis of a counterclaim on behalf of defendant.

On behalf of plaintiff it is contended that the lease was for a specific period of three years, unless the property during that time be sold by the lessor. Counsel for defendant, on the other hand, contends that, in view of the reservation on the part of the lessor of the right to sell and deliver possession of said premises during the term of three years, it was agreed that the lessee might at any time during said period vacate and surrender possession of the leased premises upon payment of $350 which should be retained by the lessor as liquidated damages in full, and that such was the purpose and intention sought to be expressed in the second paragraph of the rider attached to the lease and hereinbefore quoted. The particular portion of that paragraph with which we are especially concerned is that part which declares that, 'upon the failure of the lessee to faithfully perform the lessor should be entitled to forfeit of said Three Hundred and Fifty Dollars ($350.00) and retain the same as liquidated damages.'

With respect to the foregoing matter counsel for defendant insists that the lease, and particularly the portion of the rider hereinabove quoted, is so uncertain, ineptly expressed and ambiguous as to require explanation and support by parol...