Court Opinion

ID: 7808268
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:09:16.589182+00
Date Added: 2024-06-11T16:30:23.564062
License: Public Domain

McCulloch, C. J. (Dissenting). It ought hot to be difficult to construe the language of a contract when its subject-matter, and the situation of the parties with respect thereto, are made perfectly clear. In the present case there is no dispute on those points. The Arlington Hotel ^Company was a corporation whose legal existence expired on a certain date, -and it -owned a leasehold estate for a period substantially co-extensive with its own legal existence. The lease expired on March 3,1912, and the franchise of the corporation expired on March 30, 1912. The stipulation was that the corporation should pay to the plaintiff the sum ■of ‘ * six hundred dollars per annum on the first day of each year beginning on January 1,1907, as long as the Arlington Hotel Company or its successors or assigns shall continue to occupy the Arlington Hotel site leased by the United .States to S. H. Stitt & Co. for a term of twenty years, by lease dated March 3, 1912, ’ ’ and it strains the meaning of that language very much to say that it constituted an agreement to pay beyond the period of the lease mentioned. The parties were, in other words, evidently contracting with reference to a certain leasehold estate then in existence, for the corporation did not have the legal right to occupy the premises for a longer period, and they are presumed to have had in contemplation only that particular term unless words be found in the contract clearly indicating the contrary intention. Nothing in the language used manifests an intention to the contrary. There is also the presumption, if the language admits of it, that those acting for the corporation did not intend to contract for liability continuing beyond its own lifetime, for the obligation was personal to the corporation itself. They had no power to bind the “successors or assigns” of the corporation beyond the existence of the lease or of the corporation itself, therefore, the presumption should be indulged that they did not intend to do so. In fact, they did not, according to the express language of the contract, attempt to do that. The case falls within the principle that ‘ ‘ a man’s contracts shall not be so strained as to be unreasonable, or that it was impossible to be so intended, without necessary words to make it such. ” Singleton v. Carroll, 6 J. J. Marshall 527. The opinion of the majority takes refuge behind the use ¡of the word ‘ ‘ successors ’ ’ in addition to the word “assigns,” as being indicative of an intention to extend the contract beyond the life of the corporation and of the lease then in existence, but even if those words can not be construed as interchangeable terms, with the same meaning, there is a proper use for the word “successors” without the implication contended for. Some person or other corporation could have become the successors of the lessee corporation during the period of the lease' otherwise than by voluntary assignment of the lease, and the use of both terms is'consistent with an intention to confine the operation of the contract to the conditions then existing. The United States Government had the option, at the expiration of the existing lease contract, to lease the premises to another lessee, and the Arlington Hotel Company did not even have a preferential right to a new lease. It was only to be protected-to the extent .of the value of its improvements. If the parties meant to extend the operation of the contract beyond the period of the existing lease, they could easily have expressed that intention by stipulating that the payments should be made as long as the premises should be occupied under that or any subsequent lease. They would not likely have stopped at the mention of that particular leasehold estate if they had intended to provide for further occjapancy. The absence from the contract .of any provision with reference to the procurement of a new charter at the expiration of the old, or the procurement of a new lease, shows that the parties did not have in contemplation the operation of the contract beyond the period of the existing franchise or lease. It was optional with the stockholders of the corporation whether they would attempt to renew the charter or to procure another lease, and there is nothing in the contract which requires them to do either, so an agreement to pay in the event the lease or the charter should be renewed and the premises occupied thereunder would be entirely lacking in mutuality, and is not presumed to have been within the contemplation of the parties in the absence of •an express statement to that effect. But if we attach the fullest significance to the use of the word “successors,” there is no liability established in the present case for the reason that the new corporation is not the successor of the old one within the meaning of this contract. Conceding that it is the successor of the old corporation so far as concerns the rights of creditors of the latter, it does not follow that it is the successor of the old corporation within the meaning of this contract. The new corporation did not succeed to any of the rights of the old corporation, so far as concerns the occupancy of the premises in question, for the new company did not take an assignment of the lease, hut acquired all of its rights under a new lease contract made with the Government more than two years after the franchise of the old corporation had expired and after the old lease had expired. The new company, it is true, to ok over the assets of the -old company, but the leasehold estate had expired at that time, and was not a part of the assets of the old company. The new company also assumed and agreed to pay the indebtedness and liabilities of the .old company, but if there was no agreement on the part of the old company to pay except during the occupancy of itself and those who should hold as its successors, then there was no liability on that score to assume. I am of the opinion, therefore, that the majority of the judges have reached the wrong conclusion in this case, and am constrained to record my dissent. Mr. Justice Smith, concurs.