Talbot v. Rednalloh Co.

• Decision Date: 02 June 1933
• Citation: 283 Mass. 225,186 N.E. 273
• Parties: TALBOT et al. v. REDNALLOH CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

283 Mass. 225

186 N.E. 273

TALBOT et al.

v.REDNALLOH CO.

Supreme Judicial Court of Massachusetts, Suffolk.

June 2, 1933.

Appeal from Superior Court, Suffolk County; Winfred H. Whiting, Judge.

Action by Edmund H. Talbot, trustee, and others, against the Rednalloh Company.Judgment for plaintiffs, and defendant appeals.

Affirmed.

R. G. Dodge, of Boston, for appellant.

G. K. Black, of Boston, for appellees.

CROSBY, Justice.

This is an action of contract brought to recover rent for the months of April and May, 1932, alleged to be due from the defendant in respect to the premises formerly known as 82 and 83 Boylston street, Boston, but now known as 202-204 Boylston street.The case was tried on an original and a supplemental statement of agreed facts before a judge of the superior court who ordered judgment for the plaintiff; and the defendant appealed.

To understand the questions of law involved it is necessary to state somewhat at length the facts as disclosed by the record.On or about February 1, 1887, Warren B. Potter, the owner of the premises, executed, as lessor, an indenture of lease of the premises with Louis P. Hollander, T. Clarence Hollander and Benjamin F. Pitman, partners under the firm name and style of L. P. Hollander & Co., as lessees.The term was for twenty years from that date.On or about January 28, 1904, the owners, who then were and have continued to be trustees and devisees under the will of Potter, made an agreement with the lessees extending the term of the lease for the further term of ten years from January 31, 1907.Louis P. Hollander died in 1909, and thereafter the business was carried on by the other two partners under the same firm name.On or about December 28, 1910, the then owners entered into an agreement with the two partners whereby the lease of February 1, 1887, as extended, was extended for a further term of ten years from January 31, 1917, at the same rental and upon the same terms and conditions, with one additional provision relating to repairs and improvements to be made upon the demised premises by the lessees.Benjamin F. Pitman died in 1918.Thereafter the business was carried on by T. Clarence Hollander under the old firm name.On June 24, 1919, the defendant was incorporated under the laws of this Commonwealth, its name then being L. P. Hollander Co.From the defendant's brief it appears that the entire capital stock was issued to T. Clarence Hollander.On June 30 of that year by a written instrument, he transferred to the defendant‘all * * * [his] right, title and interest to the business hitherto carried on by * * * [him] under the name of L. P. Hollander & Co. * * *’The bill of sale ‘specifically covers all the cash on hand * * * good will and everything else connected with or incidental to * * * [his] business conducted as aforesaid. * * *’ This instrument was not recorded and the owners had no knowledge of its existence until the bringing of this action.Unless covered by this instrument there was no written assignment of the lease.Thereafter the defendant, with the knowledge of the owners, occupied the premises, paid the rent and conducted the business.There was no express consent given by the owners to such occupation and none was requested by the defendant.On or about October 3, 1922, the owners made an agreement with the defendant whereby the lease of February 1, 1887, extended as aforesaid, was ‘* * * by mutual agreement further extended for the term of twenty years from said 31st day of January, 1927, * * * upon the same terms and conditions in all respects as in said Indenture of Lease dated Feb. 1, 1887, contained, and in the extensions thereof, except the payments of rent therein stipulated in said lease and extensions thereof to be paid from and after the 31st day of January 1927, (which payments of rent are to be paid in equal monthly instalments) by the lessees, are to be as follows: * * * 5 years from Jan. 31, 1932, to Jan. 31, 1937 $27,500 per year.’In the annexed copy of this agreement it is recited that the devisees under the will of Potter have set their hands and common seal, and that the defendant caused its corporate seal to be thereto affixed and the presents signed by T. Clarence Hollander, its duly authorized president.The defendant's signature appears in the following form: ‘L. P. Hollander Co. by T. Clarence Hollander, President.’The signature of T. Clarence Hollander does not otherwise appear.At that time, October 3, 1922, the stock of the defendant was held substantially as follows: Seventy-five hundred preferred shares by Almira Pitman, twenty-five hundred preferred shares and thirty-eight thousand four hundred common shares by T. C. Hollander, about seven hundred common shares by fifty-four employees, the balance of the common shares, amounting to forty-five hundred, being held in the treasury of the company.On or about March 29, 1929, the defendant company,together with T. C. Hollander and Lorita Hollander Dickerman as administratrix de bonis non with the will annexed of Louis P. Hollander, and Almira Pitman as executrix of the will of her husband, Benjamin F. Pitman, executed an assignment of all their right, title and interest in the lease as extended to the L. P. Hollander Co. Inc. which corporation covenanted with the assignors ‘to pay the rent which may hereafter become due according to the terms of the said lease, and to perform all the covenants and stipulations in the said lease contained which are to be performed on the part of the lessee.’The owners in writing consented to this assignment at the request of the defendant.L. P. Hollander Company, Inc. also agreed to indemnify the defendant and T. C. Hollander against any loss from failure of itself or its successors or assigns fully to perform all the covenants contained in five specified leases, one of which was the lease dated February 1, 1887, ‘as extended by extension of 3rd October 1922, from devisees of lessor.’On or about May 1, 1929, the then owners delivered to Almira Pitman individually, and as heir of and executrix of the will of Benjamin F. Pitman, a release under a common seal of all demands based on or arising out of the lease originally executed February 1, 1887, and all extensions, renewals and assignments thereof.On about April 2, 1929, the name of the defendant was changed from L. P. Hollander Co. to Rednalloh Company.On February 19, 1932, L. P. Hollander Co. Inc. filed a voluntary petition in bankruptcy and received its discharge on July 26, 1932.Its trustee in bankruptcy paid $1,005.63 for use and occupation by him of the premises in the month of April, 1932.Apart from this amount neither the assignee nor the defendant has paid any rent for the months of April or May, 1932.By the terms of the agreement of October 3, 1922, the rent for each of these months was $2,291.67.

The general contention of the defendant is that its relation to the property has never been that of lessee, but only that of licensee, subtenant or assignee, and that, when it ceased to occupy the premises and with the consent of the owners assigned the lease, it was no longer liable for rent thereafter accruing.It contends that the intention manifested by the agreement of ‘extension’ of October 3, 1922, construed in the light of the two previous ‘extensions,’ was to continue the lease of February 1, 1887, as if it had originally stipulated for a lease for a term of sixty years.It argues that the word ‘lessees' as used in the provision that ‘* * * the payments of rent therein stipulated * * * and extensions thereof to be paid from and after the 31st day of January, 1927, (which payments of rent are to be paid in equal monthly instalments) by the lessees, are to be as follows * * *’ refers to the three original partners described in the opening clause as lessees.To maintain this contention it follows that the defendant must also ascribe an intention to the parties that the original lessees were to be bound by the covenants of the lease as so extended.

The agreement of October 3, 1922, must be examined in the light of all the circumstances in order to ascertain the meaning of its language as used by the parties, New York Central Railroad v. Stoneman, 233 Mass. 258, 262, 123 N. E. 679;McClintic-Marshall Co. v. Freedman, 274 Mass. 558, 563, 175 N. E. 55, and with the guide of established principles for the construction of contracts.It is plain that whatever the form of the agreement the substance was that the defendant was to have the rights and be subject to the obligations of lessee as measured by the terms of the agreement.We have not found a case containing facts sufficiently similar to be of assistance here.However, it is a well settled principle that a construction rendering a contract valid and enforceable is to be preferred to one which makes it void or its performance impossible or meaningless.Vickers v. Electrozone Commercial Co., 67 N. J. Law, 665, 676, 52 A. 467;Russell v. Phillips, 14 Q. B. 891, 901;Williston on Contracts, § 620.‘All agreements, if possible, are to be construed so as to give them effect, and so as to be in harmony with law and justice.’Old Colony Street Railway v. Brockton & Plymouth Street Railway, 218 Mass. 84, 91, 105 N. E. 866, 868.‘The rules guiding the courts in such cases will not permit of a construction that would render the contract practically inoperative and a nullity.’Commercial Union Assurance Co., Ltd., v. Foley Bros., 141 Minn. 258, 261, 169 N. W. 793, 794.

When the recital of parties in a lease makes it ambiguous as to whether the owner was intended to be the lessor, it will be presumed that the lease was intended to be made between parties capable of making it, and the lease will, in such circumstances, be so construed as to make the owner the lessor.Whitson v. Adams, 93 N. J. Eq. 456, 117 A. 154.See, also, Chapman v. Smith(1907)2 Ch. 97.In the present casethe defendant contends that...