State v. Starzinger

• Decision Date: 24 September 1970
• Docket Number: No. 54080,54080
• Citation: 179 N.W.2d 761
• Parties: STATE of Iowa, Plaintiff, v. Vincent STARZINGER, Edwin B. Carpenter and James Evans Cooney, Trustees of the Starzinger Cherry Place Trust, Defendants-Appellees, and Hamilton Funeral Chapels, Inc., Defendant-Appellant.
• Court: Iowa Supreme Court

Page 761

179 N.W.2d 761

STATE of Iowa, Plaintiff, v. Vincent STARZINGER, Edwin B. Carpenter and James Evans Cooney, Trustees of the Starzinger Cherry Place Trust, Defendants-Appellees and Hamilton Funeral Chapels, Inc., Defendant-Appellant.

No. 54080.

Supreme Court of Iowa.

Sept. 24, 1970.

Williams, McWilliams & Hart, Des Moines, for defendant-appellant.

Ahlers, Cooney, Dorweiler, Allbee & Haynie, Des Moines, for defendants-appellees.

Raymond Rosenberg, Des Moines, for plaintiff.

LARSON, Justice.

This is an appeal from a declaratory judgment entered in the Polk County District Court wherein it was held that the defendants Vincent Starzinger, Edwin B. Carpenter and James Evans Cooney, Trustees of the Starzinger Cherry Place Trust, have the right and power under and pursuant to Provision (12) of their lease with defendant Hamilton Funeral Chapels, Inc. to terminate the lease in the event that the plaintiff State of Iowa should proceed to acquire the leased premises under its power of eminent domain, and that, in the event of the exercise of that power to terminate, the defendant Hamilton Funeral Chapels, Inc. shall thereafter be without a compensable interest in the leased premises, and that the State of Iowa would then have no authority to compensate the defendant Hamilton Funeral Chapels, Inc. for the taking of its former leasehold interest. Costs were taxed equally against the defendants. Only the defendant Hamilton Funeral Chapels, Inc. appeals. We affirm.

This cause came before the trial court on August 14, 1969. By stipulation the issues presented were to be resolved solely on the pleadings, the written briefs and arguments, and other matters contained therein, without oral testimony or evidence. This stipulation revealed and the trial court found that the Starzinger Cherry Place Trust was established in March 1954 as recorded in Book 2667 in the County Recorder's office of Polk County, Iowa, on April 6, 1954; that this trust is the owner in fee simple of the real estate involved in this action described as 'Lots 1, 2 and 3, Block 10, in H. Lyon's Addition to the Town of Des Moines, an official Plat, now included in and forming a part of the City of Des Moines, Polk County, Iowa'; that on December 2, 1959, the trustees entered into a written lease agreement with one Joseph M. Conley as lessee of these premises, and that the defendant Hamilton Funeral Chapels, Inc. is the consent assignee of that lease and owns all lessee rights therein; that the plaintiff State of Iowa, in attempting to acquire the entire property, has employed appraisers to appraise it and undertaken negotiations with both defendants herein seeking to acquire all interests in that property, and has made preparations to acquire it by purchase or condemnation; that it appears from Provision (12) of the lease that lessors Have the option to terminate the lease in the event that The plaintiff State shall proceed to acquire said property under its power of eminent domain.

In its conclusions of law the trial court held (1) that it had jurisdiction of the parties and the subject matter; (2) that Provision (12) of the lease agreement between defendants clearly evidences the intention of the parties to permit the lessor to terminate said lease in the event the State should proceed to acquire the leased premises under its power of eminent domain; (3) that when the words used in this provision are assigned their plain and ordinary meanings in the context in which used, and when read in light of the entire lease agreement, it is clear and unambiguous; (4) that this provision is valid and enforceable; (5) that the operative effect of such a lease provision is to terminate the leasehold interest upon the exercise of the power conferred thereunder, thereby depriving the lessee of any compensable interest in the leased premises; and (6) that in the event the lease is so terminated, the State is without authority to compensate the lessee in any way for the taking of the leased premises. We agree with these conclusions.

The lease involved herein, attached to plaintiff's petition and referred to as Exhibit 'A', was extensive. Provision (12) thereof, which is of primary importance, provides: 'In case the estate hereby created shall be taken from the Lessee by process of law, or by proceedings in bankruptcy or insolvency or otherwise, or in case the Lessee makes an assignment for the benefit of creditors, or commits any act of bankruptcy, the Lessors shall have the right at any time thereafter, notwithstanding any license or waiver of any prior breach or condition, without any notice or demand, to enter upon the premises and thereby terminate the lease and determine the estate hereby created.'

Perhaps we should also note here the words of Provision (13) which provides: 'In event only a part of said premises is Condemned for any public purpose, this lease shall continue in force as to the remainder of said premises, PROVIDED, HOWEVER, that a reduction in rent shall be given to Lessee in the proportion which the number of square feet taken, bears to the total number of square feet of the leased premises.' (Emphasis supplied.)

Although numerous assignments of error are set forth in appellant's brief and argument, they are predicated upon two contentions: (1) that Provision (12) does not relate to condemnation proceedings, but only to acts of the lessee which could prejudice the lessor and give lessor the right thereafter to terminate the lease; in other words, the provision 'In case the estate hereby created shall be taken from the Lessee by process of law' does not justify a finding that the parties referred to or meant a taking by eminent domain proceedings; and (2) that the wording used would not permit a finding that the lease could be terminated by lessor at the time of the taking, but only after the taking, and that under property law at the time of the taking there was a compensable interest in lessee.

I. In determining the meaning of the broad phrase 'taken from the Lessee by process of law', the trial court applied the 'plain meaning' rule. See B-W Acceptance Corp. v. Saluri, 258 Iowa 489 495, 139 N.W.2d 399, 403;Darnall v. Day, 240 Iowa 665, 670--671, 37 N.W.2d 277, 280; Carson v. Great Lakes Pipe Line Co., 238 Iowa 50, 53, 25 N.W.2d 855, 857; Carroll Weir Funeral Home v. Miller, 2 Ohio St.2d 189, 207 N.E.2d 747, 749. Clearly, as used in lease Provision (12), the intent of the parties was to include every taking involving the use or potential use of the State's authority, and contemplated a taking of the whole estate created by the lease by eminent domain or condemnation proceedings although not specifically named in this provision. Any indication that this failure disclosed an intent not to include such taking, it seems, is nullified by the use of the words 'condemned for any public purpose' in the next provision, No. (13), of this lease. Therein reference is made to a partial taking of the estate created by the lease. Provision (11) also refers to lease expiration, 'by lapse of time or for any cause', showing termination by other than completion was contemplated by the parties as shown by Provisions (12) and (13).

When the court is asked to interpret a contract which the parties made for themselves the object is to ascertain the meaning and intention of the parties as expressed in the language used.

We have said that in determining the actual significance and proper legal meaning of the agreement, extrinsic evidence throwing light on the situation of the parties, the antecedent negotiations, the attendant circumstances and the objects the parties were striving to attain is necessarily regarded as relevant. See Hamilton v. Wosepka, 261 Iowa 299, 306--307, 154 N.W.2d 164, 168--169.

Here the stipulated facts did not bear on these factors. In these circumstances it is the court's duty to give effect to the language of the entire contract in accordance with its commonly accepted and ordinary meaning, and not make a new contract for the parties by arbitrary judicial construction. We will not resort to rules of construction where we thus find the intent of the parties is expressed in clear and unambiguous...