Court Opinion

ID: 3297599
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:14:54.327211+00
Date Added: 2024-06-11T12:24:26.400450
License: Public Domain

I dissent. In my judgment the proviso for paying lessee compensation for terminating his lease two years before the expiration of the term, "by credit on the rent," is ambiguous as to what rents were referred to in the use of that expression. It was an ambiguity which could only be resolved by a consideration of all the conditions and circumstances surrounding the transaction in order to determine in what sense the word "rent" was used, whether as referring to rents "due and unpaid" for the expired part of the term as found by the verdict of the jury, or rent "reserved in the lease" as determined by the majority opinion on this appeal.
The facts developed in evidence tending to throw light upon the interpretation which should be given to the use of the word "rent" in this connection, while established by unconflicting testimony, give rise to conflicting inferences; that is, some of the conditions and transactions suggest that the words "credit on the rent" were used in one sense, and some that they were used in the other. Under these circumstances the question was clearly one of fact for the jury.
The authorities cited in the opinion of Mr. Justice Wilbur to the point that the construction of a contract is always a question of law for the court, no matter how ambiguous its language, if the extraneous evidence explaining the ambiguity is not conflicting, are unquestioned. It is equally as well settled, however, by these authorities and others, that where the evidence is conflicting it becomes a question of fact for the jury, not to construe the contract, but to determine what meaning the parties themselves attached to the ambiguous terms, and it is also recognized that such conflict may arise from different inferences which may be drawn from undisputed facts, as well as from a dispute as to the facts themselves. (T. E.Foley Co. v. McKinley, 114 Minn. 271 [131 N.W. 316]; Rapp v.Linebarger  Son, 149 Iowa, 429 [128 N.W. 555]; Durand v.Heney, 33 Wn. 38 [73 P. 775].)
First Nat. Bank v. Bowers, 141 Cal. 253 [74 P. 856], is a case in point, and closely parallel to the one before us. There the ambiguity arose in the use of the term "bill of lading attached." As the main opinion states, in reviewing the decision, "the question in issue was what sort of a bill *Page 28 
of lading was contemplated by the parties." It was contended on the one hand that the bill of lading intended was one which vested title in certain oranges, and, on the other hand, that it meant any bill of lading accompanying a draft for oranges regardless of whether the consignee secured a lien by the bill. The matter was to be determined by evidence as to the custom existing in similar transactions. The court says, quotingThompson v. McKay, 41 Cal. 228: " 'The rule is well established that, in construing doubtful instruments they must be interpreted in the light of the surrounding circumstances. After ascertaining the relation of the contracting parties to each other, and the subject matter of the contract, the court will, if possible, so construe the instrument, however inartificially drawn, as to give effect to the intention of the parties, providing it can be done without disregarding the language of the instrument when all its parts are considered.' . . . The purpose to be subserved by this rule is to place the court, or jury, in the position of the parties at the time the contract was made, and enable it to intelligently interpret the language used by them. . . . Under these principles the plaintiff had a right to have submitted to the jury the question of what was intended, understood, and meant by the parties in the use of the term, 'bill of lading attached.' "
In the instant case the opposing parties contend, on the one hand, that in using the term "credit on the rent" the parties had in mind such rents as might be due and unpaid when the lease was terminated; on the other, that the rent referred to was the term "rent" stipulated in the lease, which remained unpaid covering the remaining two years of the term for which the lease had been canceled.
It may be conceded that it is possible from certain expressions of the lease contract to give the interpretation to the disputed clause contended for by appellant, without recourse to extraneous evidence. But, on the other hand, there are other declarations that are inconsistent with such interpretation.
The lessor contracts to compensate the lessee for the loss of the remainder of the term, in case of an exercise of the option to terminate the lease, and the stipulated damages for the to years of the unexpired term in this instance was $13,625. *Page 29 
When the lessor exercised his option to terminate the lease as to the entire premises, the obligation of the lessee to pay future rentals was also terminated. It is conceded that all accrued rents had been paid. If the contract for damages had stopped at the unqualified agreement to compensate the lessee in the sum of $13,625 for the loss of the unexpired term, there would have been no question of the latter's right to recover that amount, without deducting therefrom over $10,000 of rent that he did not owe. Is it a reasonable interpretation of the provision that this payment should be made by a "credit on the rent," that the parties thereby intended to bind the lessee to account for rents, which, under the terms of the contract, were not due or owing?
Under this construction of the contract it will be seen by a little computation that had the lease been terminated six months earlier, or six months later, the stipulated compensation would have been entirely canceled by the unexpired term rental, and all the lessee would have received from the agreement to compensate him would have been a release from obligation to pay rent on the terminated leasehold, which release he already had by virtue of the voluntary cancellation of the lease by his landlord.
The conditions of the termination of the lease as it occurred here left a balance due the lessee over the unpaid term lease of $2,955.52, which, under the ruling of the majority opinion, is all the compensation he will receive for the unexpired two years of his valuable leasehold.
When we consider, under the extraneous evidence, together with other significant facts, that the parties to the lease in framing this contract had under consideration the amount of remuneration which would compensate the lessee for the loss of the last two years of a three years' lease upon 400 acres of land which was to be planted to alfalfa the first year, at a probable net loss for that season, and contemplated matured crops for the last two years which were expected to net to the lessee many thousands of dollars the second and third years, it is a violent interpretation which accepts the one of two meanings of the term used, which would leave the tenant with only a nominal compensation for his loss. *Page 30 
It is argued that if the unpaid term rent was not the thing referred to in this proviso, the reference to rent could have no application as all accrued rents were presumed to be, and had actually been, paid before the termination of the lease. The option, however, reserved by the lessor to so cancel the lease extended to all or any part of the acreage, and it may well have been within the contemplation of the parties that such option would only be exercised as to part of the land, leaving accruing rents on the remainder to be applied on the stipulated damages.
I think the interpretation adopted by the jury was consistent with the conditions shown in evidence and supports the verdict for $13,625.
When the lessor agreed to "compensate" the lessee at a fixed rate per acre per year for the loss of the canceled two years of his leasehold it agreed to give him something of value for surrendering the remainder of his term. There is no compensation in merely granting to the lessee the privilege of paying himself by applying to his claim rentals which he no longer owes, on lands which he no longer possesses.
The verdict of the jury is based upon a rational commonsense interpretation of the intent of the parties and supports the only construction of the contract consistent with justice and fair dealing.
In the language of Justice Shaw in Stein v. Archibald, 15.1 Cal. 223 [90 P. 537]: "It is a well-settled principle applicable to the construction of contracts, that where one construction would make the contract unreasonable and unfair, or unusual and extraordinary, and another construction equally consistent with the language would make it reasonable, fair and just, that the latter construction is the one which must be adopted."
It is true that the question of fact as to the interpretation of the ambiguous language of this lease was not submitted to the jury under an appropriate instruction, and instructions were given which, it is claimed, left with the jury the construction of the contract. But even so, this error would only call for a reversal and new trial and should not be followed by a judgment of this court taking *Page 31 
the interpretation of the controverted language from the consideration of a jury.
Rehearing denied.
All the Justices concurred.
Shurtleff, J., was absent and Richards, J., pro tem., was acting.