Title: Automatic Gas Distributors, Inc. v. State Bank of Green River,

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Automatic Gas Distributors, Inc. v. State Bank of Green River,1991 WY 120817 P.2d 441Case Number: 90-237Decided: 09/20/1991Supreme Court of Wyoming
AUTOMATIC GAS 
DISTRIBUTORS, INC., A COLORADO CORPORATION, APPELLANT 
(DEFENDANT),

v.

STATE BANK OF 
GREENRIVER, A WYOMING BANKING 
CORPORATION, APPELLEE (PLAINTIFF).

Appeal from the District 
Court, SweetwaterCounty, Jere Ryckman, 
J.

Richard Mathey of Reese 
& Mathey, Green River, for 
appellant.

Lawrence A. Marty of 
Marty & Ragsdale, Green River, for 
appellee.

Before URBIGKIT, C.J., 
and THOMAS, CARDINE, MACY and GOLDEN, JJ.

CARDINE, Justice.

[¶1.]     This case involves a 
dispute between the State Bank of Green River 
(Bank) and Automatic Gas Distributors, Inc. (AGD) over which of their competing 
interests is senior in the property being foreclosed. AGD appeals the district 
court's summary judgment ruling that AGD "surrendered" its earlier, unexpired 
lease when it executed a subsequent lease for a longer term in the same 
property. As a result of this ruling, the Bank's mortgage was held senior to 
AGD's subsequent lease.

[¶2.]     The issues, as 
presented by AGD, are as follows:

"1. Whether a genuine 
issue of material fact existed and was unresolved at the time summary judgment 
was entered herein against Appellant.

"2. Whether the District 
Court misconstrued one of the documents upon which it relied in entering summary 
judgment herein against Appellant.

"3. Whether Appellee 
State Bank of Green River was entitled to 
judgment against Appellant as a matter of law."

[¶3.]     We affirm.

[¶4.]     In 1984, AGD leased 
property from WestAmerica Foods, Inc. for a self-service gasoline station. This 
lease was for a term of ten years and would expire March 1, 1994. It provided 
for two renewal options of five years each. A memorandum of this lease was 
recorded in the Sweetwater County Clerk's office in 1984. Ownership of the 
property then passed through various grantees until the Bank became owner of it. 
On October 6, 1988, Trans-Western Development, Inc. acquired the property from 
the Bank in exchange for a purchase money mortgage. On October 10, 1988, and 
before the expiration of the term of the 1984 lease, AGD and Trans-Western 
executed and entered into a new lease on the same property. The new lease 
provided:

"Landlord hereby leases 
to Tenant for the term and on the rentals and conditions set forth herein, that 
portion of the Premises more particularly described on the map or plat attached 
hereto as Exhibit B and incorporated herein, along with all of the rights, 
privileges, easements and appurtenances thereunto attached and belonging, 
subject only to those leases, deeds of trust, and other encumbrances 
set forth on Exhibit C attached hereto and incorporated herein." (emphasis 
added)

Exhibit C, attached to 
the lease and as written by the parties, is as follows:

"EXHIBIT C TO SPECIAL 
PURPOSE LEASE

"ENCUMBRANCES AGAINST THE 
PREMISES

"State Bank of Green River - $170,000."

The 1988 lease required a 
listing of "leases" to which the premises were still "subject." The 1984 lease 
was not listed on Exhibit C. Listed on Exhibit C was only the purchase money 
mortgage which demonstrates clearly that the premises and the 1988 lease were 
subject to the Bank's mortgage and nothing else.

[¶5.]     On October 21, 1988, 
the Bank recorded its purchase money mortgage from Trans-Western. Later, on 
October 31, 1988, a memorandum of the 1988 lease was recorded in the Sweetwater 
County Clerk's office. Trans-Western failed to make the payments upon the 
mortgage, and the Bank filed this foreclosure action.

[¶6.]     In its complaint, the 
Bank included AGD, Trans-Western, and other defendants who had interests in the 
property. AGD is the only defendant left on appeal, all other defendants having 
either defaulted or decided not to pursue this appeal. The Bank filed a motion 
for summary judgment asserting that AGD "surrendered" its 1984 lease when it 
executed the 1988 lease. In support of its motion, the Bank attached copies of 
the 1984 and 1988 lease agreements. AGD filed a brief opposing the Bank's motion 
for summary judgment and argued that the Bank had failed to present any evidence 
that would demonstrate that AGD intended to surrender its 1984 lease. The 
district court noted that there was no genuine issue of material fact and 
entered judgment for the Bank.

[¶7.]     A grant of summary 
judgment is proper only when there are no genuine issues of material fact, and 
the prevailing party is entitled to judgment as a matter of law. Brazelton v. 
Jackson Drug Co., Inc., 796 P.2d 808, 810 (Wyo. 1990). Leases are contractual in nature, 
and their construction and interpretation are for the court as a matter of law. 
Id. In 
JonesLand and Livestock Co. v. Federal Land Bank, 733 P.2d 258, 262 (Wyo. 
1987), we stated that:

"If the language of the 
contract is plain and unequivocal that language is controlling and the 
interpretation of the contractual provisions is for the court to make as a 
matter of law. The meaning of the instrument is to be deduced only from its 
language if the terms are plain and unambiguous." (quoting Shepard v. Top Hat 
Land & Cattle Co., 560 P.2d 730, 732 (Wyo. 1977))

[¶8.]     The Bank, as the 
movant, had the initial burden of demonstrating the absence of any genuine issue 
of material fact and that it was entitled to a judgment as a matter of law that 
AGD surrendered its 1984 lease. Fiscus v. Atlantic Richfield, 773 P.2d 158, 161 (Wyo. 1989).

[¶9.]     Neither lease is 
ambiguous, and therefore, we do not look beyond those documents to determine 
their meaning. JonesLand & Livestock, 733 P.2d  at 262. The 
express language of the 1988 lease states that it is

"subject only to 
those leases * * * set forth on Exhibit C attached hereto and 
incorporated herein." (emphasis added)

Significantly, the 1984 
lease was not listed on Exhibit C. The only document listed on Exhibit C as an 
encumbrance was the Bank's mortgage. The 1984 lease not being listed, it, by 
written agreement of the parties, is not embraced and did not survive the 1988 
lease. Our examination of the documents attached to the Bank's motion for 
summary judgment convince us that the Bank met its burden.

[¶10.]  AGD nevertheless alleges that, contrary 
to its express written agreement and without any supporting facts, that it alone 
intended that its 1984 lease survive without being listed on Exhibit C attached 
to the 1988 lease and that it remained an encumbrance prior to the Bank's 
purchase money mortgage.

[¶11.]  It is probably unnecessary for us to 
address this unilateral conclusory claim supported by nothing. Nevertheless, we 
find additional support, as did trial Judge Ryckman, for the result here reached 
in Barber v. Smythe, 59 Wyo. 468, 143 P.2d 565, 568 (1943), wherein we 
said:

"It is agreed among the 
authorities that a lease for a term of years may be surrendered by operation of 
law and that an agreement in writing is not necessary in such a 
case."

See also Application of 
Hagood, 356 P.2d 135 (Wyo. 1960); Casper Nat'l 
Bank v. Curry, 51 Wyo. 284, 65 P.2d 1116, 1118-19, 110 A.L.R. 
360 (1937). Thus there is a presumption, to which the Bank was entitled, that 
acceptance by the tenant of a new lease of the demised premises during the term 
of an old lease operates as a surrender of the old lease by the act of the 
parties. Presumption of intent to surrender results from the making of the new 
lease and acceptance. State v. Fin & Feather Club, 316 A.2d 351, 356-57 (Me. 
1974) (citing Brown v. Linn Woolen Co., 114 Me. 266, 269, 95 A. 1037, 1038 
(1915)). See also 49 Am.Jur.2d Landlord and Tenant § 1103 (1970), wherein it is 
stated:

"A surrender of a lease 
is implied by law when another estate is created by the reversioner or 
remainderman, with the assent of the tenant, incompatible with the existing 
term. So, as a general rule, when a new lease of the premises is taken by the 
lessee from the lessor for the whole or a part of the term embraced in the 
former one, there is said to be a surrender in law, because the giving of a new 
lease necessarily implies a surrender of the old one." (footnotes 
omitted)

The rule of surrender 
implied by law is so well established as to be without dispute.

[¶12.]  We also have duly considered the 
remainder of the above quotation, which is:

"In any case, however, if 
the circumstances are totally inconsistent with the intention of the parties 
that the giving of the new lease shall operate as a surrender of the existent 
lease, it will not be given such an operation." Id.

It has no application to 
this case. Nothing was presented which constituted "circumstances * * * 
totally inconsistent with the intention of the parties" to 
surrender. Thus, appellant does not claim it was misled by the parties' 
negotiations, statements, misrepresentations, or promises that induced making 
the new lease. Appellant does not explain why it made a new lease nor does it 
claim that the parties intended the 1984 lease remain in effect. 
Appellant only claims that it, one party, intended that the 1984 lease 
remain in effect; and that claim is based upon its bald, conclusory, single 
assertion that appellant did not intend to surrender. That is insufficient to 
defeat summary judgment.

[¶13.]  There was nothing before the court 
concerning acts of the parties to rebut the presumption or establish a different 
intention. The 1988 lease took effect before the expiration of the 1984 lease 
and extended the term of the lease beyond that called for in the 1984 lease. The 
fact that the 1984 and 1988 leases are for the same property, that the property 
changed hands between leases, that the new lease is for a longer term and is 
subject only the Bank's encumbrance, is sufficient to establish the surrender of 
the earlier lease.

[¶14.]  The trial court is accused of a result 
oriented decision when the dissent states "a presumed intent to achieve a 
probable undesired result * * * fuels my disagreement with [the majority]." Dis. 
op. at 1. In truth, the disagreement really is fueled by inappropriate use of 
conjecture, speculation or private inquiry, assembling special facts and then 
retrying and redeciding the case according to a personal view of justice - 
alluded to as a rule of "common sense." See also Monn v. State, 811 P.2d 1004 
(Wyo. 1991); Clarke v. Vandermeer, 740 P.2d 921 
(Wyo. 1987). 
For example, it is interesting here that the precise language of the parties' 
written agreement is ignored and a nonexistent legal principle asserted that if 
a party to an agreement did not intend to face foreclosure, and 
foreclosure results, then his agreement is unenforceable and void. It is then 
stated that we "`begin with a presumption' that Automatic Gas Distributors, Inc. 
intended to surrender the first lease." Dis. op. at 446. We did not begin with 
that presumption at all. We began with the plain, unambiguous provisions of the 
lease itself.

[¶15.]  There is also allusion to an "intent and 
circumstance rule" said to be found in Application of Hagood, 356 P.2d 135, 
which is said to not support our conclusion. The alleged rule, if it can be 
found in Hagood, has no bearing on this case. And the rule of "common sense" is 
indeed an odd anomaly. Were we to adopt this rule, we could repeal all statutes 
and common law and in each case just determine what common sense tells us should 
be the final decision. Solemn agreements, even written contracts, would be 
unenforceable - of no effect. Only what some jurist perceived as "common sense" 
would survive, and we truly would be a government of men and not 
law.

[¶16.]  Let us now examine the rather unusual 
manner in which the dissent assembles a hypothetical factual basis for 
application of nonexistent law. Thus, initially stated was the 
following:

"The record, such as it 
is, would suggest [changed in revised dissent to `reveals in leasehold 
documentation'] that the convenience store operation included normal maintenance 
and general operation of the gasoline facility. Actually, we do not know 
[changed in revised dissent to `are not informed at this summary judgment 
stage'] whether this was a self-standing coin-operated installation or a 
facility with in-store controls. Marketing agreements of this type 
could either be a royalty arrangement payable to the adjacent 
store operator with responsibilities for gas purchases and general operation 
vested in the facility owner or general operational responsibility vested in the 
store with a royalty interest payable to the facility owner. Whichever this 
may have been could significantly impact the ultimate resolution to 
determine intent where clearly State Bank of Green 
River decided after foreclosure to end the operation of Automatic 
Gas on the premises." (emphasis added) Dis. op., n. 2.

Relying upon "would 
suggest," "we do not know," "could be," and "whichever this may have been" 
cannot form a sound basis for this inappropriate effort to inject a nonexistent 
doctrine that the contrary intent of a party to an agreement is 
sufficient to void the agreement. It is likely that had appellant foreseen a 
foreclosure, it may not have entered into the 1988 lease. The same can be said 
of the purchase of real estate at a price too great which then goes into 
foreclosure, or of any other agreement which is less favorable than hoped for. 
The essence of this proposed doctrine is that we void the express written 
agreement of the parties, recognize that the party facing foreclosure did not 
intend to face foreclosure, and rewrite and relieve that party of the obligation 
of his agreement. If this result is appealing, it is a result we should not 
effect, for we are obligated to apply the law as we find it.

[¶17.]  The intent of one party alone is 
not sufficient to avoid surrender of a prior lease. Thus, quoting from Van 
Rensselaer's Heirs v. Penniman, 6 Wend. 337, 343 (N.Y. 1831), it is stated: 

"[i]f the acts of the 
parties in this case, taken all together, are such as to rebut the idea 
of a surrender, then none ought to be presumed."

The intent not to 
surrender must be the intent of the parties - not one of the parties. The 
intent of the Bank could not have been more clear. Its purchase money mortgage 
with $170,000 exposure was conditioned upon there being no encumbrance ahead of 
the Bank. Otherwise, why make a new lease? Both parties must have understood the 
new lease had some purpose. Appellee does not tell us what that purpose was. But 
the purpose appears from the lease itself which clearly provides that the prior 
lease is not an encumbrance. It was interesting that when appellee's counsel was 
asked at argument what he would think if this court held the prior lease - 
though not listed on Exhibit C - to be an encumbrance, counsel replied, "I'd be 
flabbergasted." So would the writer of this opinion, as would members of the 
bar.

[¶18.]  Given the Bank's evidence that AGD 
surrendered its lease, the burden shifted to AGD to provide evidence to the 
contrary. See Jones Land & Livestock, 733 P.2d  at 263 wherein it is 
stated:

"[O]nce the movant has 
established a prima facie case, the burden then shifts to the opposing party to 
come forward with competent evidence of specific facts countering the facts 
presented by the movant."

Admittedly, AGD's burden 
to show a contrary intent was difficult given the unambiguous provisions of the 
1988 lease. AGD's conclusory single assertion denying intent to surrender 
contrary to the subsequent unambiguous lease did not provide any sufficient 
evidence to overcome the plain meaning of the documents. Allegations stating a 
different theory in opposing a summary judgment motion are insufficient. We 
stated in Fiscus, 773 P.2d  at 160-61 (Wyo. 1989), that "the beneficial purpose of 
summary judgment would be defeated if cases could be forced to trial simply by 
an assertion that a genuine issue of material fact exists." In order to defeat 
the Bank's showing of surrender, AGD needed to come forward with specific 
competent evidence showing that there existed a genuine issue of material fact 
concerning surrender of the lease. JonesLand & Livestock, 733 P.2d  at 263. It 
failed to do this. The Bank was therefore entitled to judgment as a matter of 
law that AGD surrendered its 1984 lease.

[¶19.]  Finally, this opinion does not 
memorialize discord within the court, but rather demonstrates an honest 
disagreement upon a point of law - not an uncommon occurrence within the legal 
profession. Thus, involved here is a healthy, robust debate of important 
questions by professionals that can only be of benefit to all.

[¶20.]  The district court's judgment ruling the 
Bank's mortgage senior to AGD's lease and foreclosing AGD's interest in the 
property is

[¶21.]  Affirmed.

THOMAS, J., concurred in the 
result.

MACY, J., filed a specially 
concurring opinion.

URBIGKIT, 
C.J., 
filed a dissenting opinion.

MACY, Justice, specially 
concurring.

[¶22.]  I agree with the result reached in the 
majority opinion. I do not, however, join with the majority's reply to the 
dissent. I am of the opinion that the practice of replying in a majority opinion 
to a dissent serves only the purpose of memorializing the discord between some 
members of this Court and is, therefore, improper. Griffin v. State, 749 P.2d 246 (Wyo. 1988) (Macy, J., 
specially concurring).

URBIGKIT, Chief Justice, 
dissenting.

[¶23.]  The trial court's application of a 
presumed intent to achieve a probable undesired result before a complete factual 
development fuels my disagreement with the decision to affirm summary judgment. 
A century-old concept clearly stated by Van Rensselaer's Heirs v. Penniman, 6 
Wend. 337 (N.Y. 1831) was misapplied and then combined with an undocumented 
factual analysis for a summary judgment decision. 

[¶24.]  The trial court and the majority have 
mixed up the parties and have presumed intent that the lessee intended to 
relinquish title priority in favor of a bank which became the owner-lessor 
through foreclosure, but was never a party by execution of a lease.

[¶25.]  I dissent because I believe the approach 
adopted by the majority departs from our established standard of review for 
summary judgments. Traditionally, "[w]e analyze challenges to a grant of summary 
judgment by reviewing the record in a light most favorable to the party opposing 
the motion[,] giving him all favorable inferences that can be drawn from the 
facts." Boehm v. Cody Country Chamber of Commerce, 748 P.2d 704, 710 (Wyo. 1987). In this case, 
we instead "begin with a presumption" that Automatic Gas Distributors, Inc. 
intended to surrender the first lease by accepting the new lease. This is done 
mechanically rather than by exploring all inferences favorable to the notion 
that Automatic Gas did not intend to surrender the first lease at its severe 
economic disadvantage.

[¶26.]  Why this approach? Because a court in 
Maine in 1974, relying on prior Maine case law, decided 
that the acceptance of more restrictive leases by certain lessees gave rise to a 
presumption that the lessees intended to surrender the prior lease. 
SeeState v. Fin and Feather Club, 316 A.2d 351, 356-57 
(Me. 1974). 
Even so, that presumption was rebuttable. "`[I]f the acts of the parties taken 
all together, are such as to rebut the idea of surrender, then none ought to be 
presumed.'" Id. at 356-57 (quoting Brown v. Linn Woolen Co., 114 Me. 266, 269, 
95 A. 1037, 1038 (1915)).

[¶27.]  Nor is the majority's reliance on 49 
Am.Jur.2d Landlord and Tenant § 1103 (1970) justified. "In any case, however, if 
the circumstances are totally inconsistent with the intention of the parties 
that the giving of the new lease shall operate as a surrender of the existent 
lease, it will not be given such an operation." Id.

[¶28.]  If the legal presumption of an intent to 
surrender the first lease was a matter of statement in prior Wyoming case law, I could 
understand the position adopted by the majority. However, the intent and 
circumstance rule of Application of Hagood, 356 P.2d 135 (Wyo. 1960) does not 
sustain the current decision.1 Automatic Gas was doing no more 
than relying upon prior Wyoming case law - 
which did not give rise to an arbitrarily applied presumption - as well as the 
established standard of review for summary judgments in Wyoming. See 
Jung-Leonczynska v. Steup, 803 P.2d 1358 (Wyo. 1990); Wagner v. First Wyoming Bank, N.A. 
Laramie, 784 P.2d 224 (Wyo. 1989); 
Jung-Leonczynska v. Steup, 782 P.2d 578 (Wyo. 
1989); Provence v. Hilltop Nat. Bank, 780 P.2d 990 (Wyo. 1989); Baros v. Wells, 780 P.2d 341 
(Wyo. 1989); Roybal v. Bell, 778 P.2d 108 (Wyo. 
1989); Case v. Goss, 776 P.2d 188 (Wyo. 1989); Doud v. First Interstate Bank of 
Gillette, 769 P.2d 927 (Wyo. 1989); Albrecht v. Zwaanshoek Holding En 
Financiering, B.V., 762 P.2d 1174 (Wyo. 1988); Petersen v. Campbell County 
Memorial Hosp. Dist., 760 P.2d 992 (Wyo. 1988); Johnston v. Conoco, Inc., 758 P.2d 566 (Wyo. 1988); Wessel v. Mapco, Inc., 752 P.2d 1363 (Wyo. 1988); Farr v. 
Link, 746 P.2d 431 (Wyo. 1987); and Stundon v. Sterling, 736 P.2d 317, 318 (Wyo. 
1987).

[¶29.]  In February 1984, Automatic Gas obtained 
a self-service gasoline facility premises lease on a lot in a commercial 
subdivision in Green River, 
Wyoming. The lease, with an initial 
term of ten years and two five-year renewal options, included a duly recorded 
notice memorandum. A separately prepared marketing agreement determined rent.2 

[¶30.]  The lessor-landlord obviously had 
financial difficulties. In due time, the State Bank of Green River acquired the underlying fee title by mortgage 
foreclosure and purchase at sale through a sheriff's deed. State Bank of Green 
River, then as vendor, resold the real estate to Trans-Western 
Development in which transaction, for unexplained reasons, a second lease 
agreement was executed on this occasion between the new purchaser of the 
property, Trans-Western, and the existent lessee, Automatic Gas. Trans-Western 
also failed financially and the State Bank of Green 
River re-foreclosed on the real estate pursuant to its vendor's 
purchase money mortgage.

[¶31.]  The issue of the case, however stated, is 
whether in the foreclosing lender's resale of the property the developed 
documentation caused a subordination of the prior leasehold rights of Automatic 
Gas in favor of the later purchase money mortgage lien acquired on resale by the 
lender.

[¶32.]  Having begun with a presumption against 
Automatic Gas rather than looking for inferences favorable to Automatic Gas, the 
majority then requires Automatic Gas to have anticipated our reliance on 
Maine case law 
and have come forward with competent evidence that Automatic Gas did not intend 
to surrender the prior lease. But in the absence of this Fin and Feather 
Club presumption, the burden would not have shifted to Automatic Gas. 
Additionally, because the subsequent lease is used to ground the presumption of 
an intent to surrender the first lease, the majority cannot then claim the 
subsequent lease is added weight to the legitimacy of the presumption. Where the 
State Bank of Green River did not produce 
evidence on the issue of intent, Automatic Gas was not required to do so in 
response.

[¶33.]  Material facts regarding negotiation, 
adoption, and execution of the second lease may or may not be in conflict. Lack 
of conflict about those historical facts would not be dispositive. The issue is 
whether the material facts could give rise to an inference that Automatic Gas 
did not intend to surrender all the benefits of the prior lease and thereby 
promote the security interest of the State Bank of Green 
River over that of itself as a lessee with a prior recorded title 
interest. "`Even where the facts bearing upon the issue of negligence are 
undisputed, * * *, if reasonable minds could reach different conclusions and 
inferences from such facts, the issue must be submitted to the trier of fact.'" 
Cordova v. Gosar, 719 P.2d 625, 639 (Wyo. 1986) 
(accord Fegler v. Brodie, 574 P.2d 751, 754 (Wyo. 1978)). One favorable inference which 
could reasonably be drawn from the documents presented to the trial court is 
that Automatic Gas intended to preserve the rights and benefits it had under 
both leases.

[¶34.]  In my view, this majority is ambushing 
the law firm for Automatic Gas because to predict this outcome, an attorney 
would have to anticipate that this court would depart from its established 
standard of review that begins with a presumption in favor of the summary 
judgment non-movant, turn to twenty-year-old Maine case law to justify a 
presumption against the non-movant in this case, and then require Automatic Gas 
to come forth with evidence to counter the presumption creating an unlikely 
intent. The outcome assumes that Automatic Gas intended to become secondary to 
the security interest of the State Bank of Green 
River. I think alternative inferences in good common sense can 
easily compete with such an inference.

[¶35.]  The principle involved here has far more 
ancient history and the rule as applied by this majority is only partially 
stated. The basic American case with historical factual ancestry before the 
American revolution, derived from a 1766 lease, is Van Rensselaer's Heirs, 6 
Wend. 337. In Van Rensselaer's Heirs, the court recognized the principle based 
on much earlier legal history to answer the question of whether the acceptance 
of a second lease was a surrender of the first in recognizing two corollary 
principles to be applied. "It seems to be well settled, that if a lessee accepts 
a new lease of the same premises during the term in the first lease, the first 
is deemed to be virtually surrendered." Van Rensselaer's Heirs, 6 Wend. at 342. 
It then stated the responsive principle that "[i]f the acts of the parties in 
this case, taken all together, are such as to rebut the idea of a surrender, 
then none ought to be presumed." Id. at 343. That court recognized that "when 
such presumption cannot be presumed, without doing violence to common 
sense, the presumption will not be supported." Id. at 342 n. (a) 
(emphasis added). Common sense consequently becomes a condition precedent for 
the presumption to exist within its factual environment.

[¶36.]  The application of common sense, although 
not necessarily ever bad, as developed by the historical precedent applicable 
here, involves usage of an unreasonable external presumption. Common sense, as 
an anomaly or not, has absolutely nothing to do in this case with internal 
interpretation of the third party documents. The common sense Van Rensselaer's 
Heirs rule with over 200 years history addresses in this dissent application of 
a court created presumption to determine intent which does not make common sense 
in presumption application. The law should not imply or presume an absurd intent 
and the Van Rensselaer's Heirs rule states that common sense principle of logic 
and human experience.

[¶37.]  In Van Rensselaer's Heirs, the court 
found that the circumstances failed to provide the required common sense 
justification.

On the supposition that a 
surrender was intended, the lessee must have intended to abandon all claim for 
his improvement, and to give up a good title for three lives, on 
receiving a lease for one of those lives. * * * I cannot believe that a 
surrender was intended. The authorities say that the surrender in cases of 
second leases is presumed from the intention of the parties. In this case, every 
circumstance, except the fact of receiving the second lease, altogether rebuts 
the idea of an intention to surrender the right to compensation for 
improvements.[3]

Id. at 343.

[¶38.]  Non-application of the presumption when 
it defies its requirement of common sense was restated in Coe v. Hobby, 72 N.Y. 141, 146 (1878) (citing Van Rensselaer's Heirs, 6 Wend. 337)):

In the case of a term for 
years, or for life, it may be [that surrender of the lease is implied] by the 
acceptance by the lessee or termor of an estate incompatible with the term, or 
by the taking of a new lease by a lessee. It will not be implied against the 
intent of the parties, as manifested by their acts; and when such intention 
cannot be presumed, without doing violence to common sense, the presumption will 
not be supported.

Coe was decided in 
recognition that no surrender of the existing lease should be implied by law as 
resulting from the presumed intention of the parties under the factual situation 
presented. 

[¶39.]  Brown, 95 A.  at 1038 is completely 
consistent in assessing the facts to reject the presumption and to retain in 
effect the first lease.

Presumption of an 
intention to surrender [a prior lease] follows such acceptance [of a succeeding 
lease] - "but if the acts of the parties, taken all together, are such as to 
rebut the idea of a surrender, then none ought to be presumed."

[¶40.]  Unfortunately, trial developments in this 
case provide no actual information to determine intent. Mistake, accident, 
attorney neglect, lack of foresight or even bad planning could have been the 
motivating cause for acceptance by Automatic Gas as lessee of an overriding, 
superseding or supplementary second lease under these circumstances. The tenant 
who is the holder of a long term lease, if then to become subordinated to the 
lender of a new owner, is at best a pigeon to be plucked unless extraordinary 
protection is otherwise provided.

[¶41.]  Clearly, this litigation has not been 
developed by trial preparation to produce a sufficient record to justify 
summary judgment without presumption. In addressing documentation, it bears 
repeating: Nothing of record reveals any dealings between the lessee and the 
foreclosing lender when the resale transaction developed. If the lessee waived 
rights established by the first lease, it did so in negotiation with the new 
owner and not the owner-vendor, State Bank of Green 
River, which retained the purchase money sale mortgage upon that 
resale.

[¶42.]  It is not conjecture to recognize 
inadequate factual record development in this case. The record tells what is not 
provided as conspicuously and comprehensively as do the assumptions and 
presumptions of the majority in addressing what was provided to determine that 
Automatic Gas, in negotiation with Trans-Western, intended to relinquish rights 
which it had acquired at an earlier time from a different party in order to 
benefit a third party and promote the lien of a resale mortgage. What does not 
make common sense here is a presumed intent that a party would unnecessarily 
give up something for the benefit of a third party with whom it was not 
negotiating. If it is suggested that the State Bank of Green River, as vendor, entered into the transaction 
between the prospective new owner and the tenant, that assumption is not 
validated by this record.

[¶43.]  Presumptions aside,4 everyone in these transactions 
should have known about and understood how to use a written subordination 
agreement when the new purchaser brought into this mine field a purchase money 
mortgage. From the standpoint of the lessee, thoughtful judgment would have 
established, as these historical events have demonstrated, that the change was 
all risk and no benefit and surely would never be voluntarily accepted as a 
benefit for the prior owner without significant substitute compensation from the 
new owner. To presume a knowing acceptance of this heightened risk as now 
illustrated by what subsequently occurred would attribute sheer folly or more 
likely total invalidity of any provided legal services. It was the priority 
protection afforded by the earlier recording date of the commercial land lease 
which maintained some reasonable economic validity of the tenancy. In result, 
on this record, we presume total ineffectiveness of someone or clear 
mistake.

[¶44.]  In retrospect, it is certain that the 
present result was not planned when, during preparation of the legal documents 
between the lessee and the new owner, legal counsel failed to address 
abandonment, modification, or retention of the rights provided in the first 
lease. Specifically, counsel failed to address title interest priority by date 
of recording.

[¶45.]  In Van Rensselaer's Heirs, the court knew 
enough about history and factors of title to reject the presumption on the 
evidentiary title records. In this case, lacking knowledge of what occurred and 
anticipating a margin for error for simple bad judgment, I would leave with the 
trial court the responsibility to determine intent from evidence presented in an 
actually conducted trial, with recognition that common sense has a place. 
"Intent is to be derived from an examination of all of the surrounding facts and 
circumstances" and is "a question of fact." Smith v. Neely, 93 Ariz. 291, 380 P.2d 148, 
150 (1963). Rejecting the windfall, I conclude here that the requisite intent 
has been neither established by fact nor by legitimate presumption. See Edelman 
v. Henderson, 
294 F. Supp. 323 (D.V.I. 1968) and Burger v. Western Sand & Gravel Co., 237 S.W.2d 725 (Tex.Civ. App. 1950). This court has also recognized that intent is 
an issue of fact. Anderson Excavating and 
Wrecking Co. v. Certified Welding Corp., 769 P.2d 887 (Wyo. 1988); United States Through Farmers Home 
Admin. v. Redland, 695 P.2d 1031 (Wyo. 1985).

[¶46.]  Whatever may be said in factual 
examination for opinion writing, the historical facts in this case are not in 
dispute. There are four parties involved in the course of the transaction for 
the purpose of this appeal: (1) the original lessor, WestAmerica Foods, Inc. 
(the owner was Green River Investors, Ltd.); (2) the gas facility premises 
lessee (Automatic Gas); (3) the lender (State Bank of Green River); and (4) the 
1988 property purchaser (Trans-Western) who, like the first owner, lost the 
property through foreclosure to the same lender following execution of the 1988 
purchase money mortgage.

[¶47.]  Initially, Automatic Gas had a prior 
recorded title interest by virtue of a lease and corollary marketing agreement. 
The original owner lost its title to the lender by foreclosure of the property 
who then became owner. As owner, the State Bank of Green 
River resold the property to the second purchaser and took back a 
purchase money mortgage.

[¶48.]  The issue presented is whether the 
lender, upon resale and acquisition of the purchase money mortgage, achieved a 
superior title when Automatic Gas, as lessee, in some fashion subordinated its 
superior title interest as the lessee in favor of the holder of the purchase 
money mortgage prior owner - the State Bank of Green 
River. The subordination is contended to have been accomplished for 
the benefit of the State Bank of Green River by 
the second lease agreement which was entered into between Automatic Gas and the 
new owner who unfortunately did not last long before losing its interest by a 
second foreclosure of the property by the same lender.

[¶49.]  The case simply questions the intent of 
Automatic Gas to subordinate for the favor of the lender by its agreement with 
the property purchaser. Intent in one agreement to benefit a third party is 
presented. The first lease revocation thesis (involving the same parties as a 
theory normally, see Van Rensselaer's Heirs) was applied in trial court decision 
in first adoption. That revocation thesis, however, derived from Van 
Rensselaer's Heirs has a corollary which denies application to presume intent 
when it does not make common sense. Id. at 342. Overtly here it does not reach the 
common sense criteria of the presumption within what is revealed in this 
record for the lessee to have intended subordination. There is a chance - 
one in a hundred or one in a thousand - that for some unwise reason the lender 
could have intended this now ignoble result.

[¶50.]  That is the reason why I suggest that the 
case be returned for trial to determine the actual facts and not conversely 
determine the case by summary judgment granted against the State Bank of 
Green River. However the argument of the 
majority may now be phrased, this was a decision made by the trial court by 
applying a presumption of subordination. Common sense invades this question 
since the only overtly demonstrable benefit favored the third-party lender and 
provided nothing of justification or benefit to the endangered lessee. 
Furthermore, the benefitted party from the presumption was not the lessor 
in the original lease and is not the lessor in the second lease. The benefitted 
party, State Bank of Green River - owner - 
mortgagee, gains benefit by standing to interject a favorable presumption into 
an agreement between two totally different parties. It can be realistically 
understood that what a lessee may agree to do for or with a new owner does not 
necessarily establish intent to give title priority to a prior owner who now 
becomes the holder of a purchase money mortgage. If we seek dual intent, a 
concept which I reject since only the lessee can intend to surrender its 
priority leasehold right under the circumstances, the second party to the intent 
is the new owner and not the State Bank of Green River which was not a 
bargaining party to the second (or first) leasehold agreement.

[¶51.]  I would reverse the summary judgment and 
let Automatic Gas develop its theory of the case that it did not intend to 
surrender all leasehold benefits provided in the prior lease which served as its 
only protection against the prior owner, now mortgagee. This is again a summary 
disposition where trial determination should have been required for factual 
issues in order that this summary judgment decision would not stand when based 
upon pleadings and one affidavit signed by a person without knowledge of the 
intent of the participants in two other entities in their separate 
dealings.

FOOTNOTES

1 In Application of 
Hagood, 356 P.2d  at 139 (footnote omitted), we stated the rule which is 
completely consistent with the seminal American case of Van Rensselaer's Heirs, 
6 Wend. 337:

Whether or not a later 
instrument constitutes a new lease or merely a modification of a prior lease is 
a question of intent deducible from the circumstances and especially from the 
instrument[.]

2 The record, such as it 
is, reveals in leasehold documentation that the convenience store operation 
included normal maintenance and general operation of the gasoline facility. 
Actually, we are not informed at this summary judgment stage whether this was a 
self-standing coin-operated installation or a facility with in-store controls. 
Marketing agreements of this type could either be a royalty arrangement payable 
to the adjacent store operator with responsibilities for gas purchases and 
general operation vested in the facility owner or general operational 
responsibility vested in the store with a royalty interest payable to the 
facility owner. Whichever this may have been could significantly impact the 
ultimate resolution to determine intent where clearly State Bank of Green River decided after foreclosure to end the operation 
of Automatic Gas on the premises. The marketing agreement referred to in Section 
15 in the first lease and Article 8 of the second lease is not included in the 
record documentation. Its preeminence is shown by a provision stating "that any 
provisions of the Marketing Agreement which are inconsistent with the provisions 
of this Lease shall control, supersede and have priority over the provisions of 
this Lease."

3 There is an additional 
similarity within the facts in the cases emplaced nearly 160 years apart. The 
court said in Van Rensselaer's Heirs that for a surrender to be effective, it 
"should be made to the lessor, or the reversioner. John I. Van Rensselaer was 
neither." Van Rensselaer's Heirs, 6 Wend. at 343. Here, State Bank of Green River is not the original lessor, or assignor or 
grantee of the original lessor. State Bank of Green 
River is a twice involved lender whose rights are only promoted if 
the original lease between Automatic Gas and a far removed third party is 
superseded by the later separate transaction between the lessee and a different 
party. The identity of parties criteria required as a foundation of the 
presumption does not exist here where the State Bank of Green River was neither the first nor the second 
lessor.

4 In 
litigative progression from initial trial court decision to present final 
appellate court decision and opinion, the philosophically defined bent of 
decision has changed from an initial presumptive legal issue determination case, 
Cordova, 719 P.2d 625 (stage five), by change to Cordova, 719 P.2d 625 (stage 
four), involving the propriety of summary judgment resulting from respondent's 
failure to file a resisting affidavit, and finally to a factual assessment that 
there is no material conflict of fact, Cordova, 719 P.2d 625 (stage six).