Young v. Thomas
| Decision Date | 31 December 1979 |
| Docket Number | No. 12275,12275 |
| Citation | 604 P.2d 370,1979 NMSC 105,93 N.M. 677 |
| Parties | Thomas F. YOUNG, Connie Young, Edwin B. Duncan, Camille T. Duncan, William K. Jones, Margaret A. Jones, and 1601 St. Michael's Drive Corporation, Plaintiffs-Appellees, v. Bess G. THOMAS, Individually and as Executrix of the Estate of Bradley M. Thomas, Sr., Deceased, Bradley Morris Thomas, Jr. and Virginia Thomas Nydes, Defendants-Appellants. |
| Court | New Mexico Supreme Court |
Young and others (Young) filed a declaratory judgment action against Thomas and others (Thomas) for a declaratory judgment on a real estate lease. Thomas counterclaimed for reformation of the lease because of mutual mistake. The trial court granted summary judgment in favor of Young. We reverse.
We inquire whether the lease is ambiguous so as to permit testimony regarding the intent of the parties, and thereby creating a question of material fact precluding summary judgment.
Thomas, the owner of the land, had a long-term ground lease with the Duncans and the Jones (Duncan/Jones) which contained an agreement that the lease could not be assigned without Thomas' consent and that the rent would be increased upon assignment. Duncan/Jones organized the 1601 St. Michael's Drive Corporation in which they owned all the stock. Thomas agreed to an assignment of the lease from Duncan/Jones to the corporation. A new lease was signed containing the same restriction on assignment and providing for increased rent upon any assignment.
The corporation now proposes to sell all its stock to Young. This suit was brought to determine whether the lease provisions requiring approval by Thomas of the assignment and the increase in rent are applicable.
In relevant part the lease reads:
CORPORATION and DUNCAN/JONES agree that They shall not, henceforth, be permitted to Assign, sell or convey All or any part of their interest in and under the aforesaid Ground Lease, without the prior written approval of THOMAS, and it is understood that rentals for the premises the subject of said Ground Lease shall be reset upon the effective date of any such assignment, sale or conveyance . . . (Emphasis added.)
Young claims this restriction does not apply to the sale of stock in the corporation, only to the conveyance of an interest in the lease. Duncan/Jones had assigned all of their interest in the lease to the corporation, under another provision in the agreement, and claim that they do not need to obtain Thomas' approval to sell their stock.
Thomas asserts that this restriction prohibits both the corporation and Duncan/Jones from selling or conveying any part of their interest in the lease without his permission. In addition, Thomas claims that if they sell or convey their interest he has the right to increase the rent. The inclusion of "Duncan/Jones" in the restriction is not mere surplusage, Thomas claims. Since the only interest Duncan/Jones has in the lease is their ownership of the stock of the corporation, their sale of the stock must be a sale of their interest in the lease requiring...
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