Court Opinion

ID: 3925825
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:52:03.041186+00
Date Added: 2024-06-11T14:16:33.071872
License: Public Domain

On Rehearing.
On further consideration a majority of this court are of the opinion that this case was erroneously disposed of. We fully concur in the facts found and stated in the opinion of Justice Levy affirming the judgment appealed from; we also agree in the main to the general legal propositions which he announces in the course of his discussion; but we now think that a different construction should have been given to the contract between the appellant, Phelps, and his lessors. That contract is as follows:
"The State of Texas, County of Dallas.
"This memorandum witnesseth the following contract this day entered into by and between J. M. Talbot and Mrs. M. F. Haynie herein called parties of the first part, and W. P. Phelps, herein called party of the second part, all of said parties being residents of Bowie county, Texas, except J. MA. Talbot, whose residence is Dallas county, Texas:
"First. The parties of the first part, in consideration of the promises and agreements of the party of the second part hereinafter stated, do by these presents lease and let unto the party of the second part, for the term or period of five (5) years, beginning on the 1st day of January, A.D.1909 and ending on the 31st day of December, A.D. 1913, the following described tract or parcel of land, situated in Bowie county, Texas, and being what is known as the `Talbot farm,' containing about one hundred and thirty (130) acres of tillable land in Red river bottom, and about thirty-five (35) acres on the hills; it being intended hereby to lease unto the said party of the second part for the term aforesaid all of the land owned by the parties of the first part in what is known as the Chas. Lewis H.R. Survey situated in said *Page 866 
county, and lying about five (5) miles north of the town of Hooks, in said county.
"Second. In consideration of the aforesaid lease made to him by the parties of the first part, the party of the second part does hereby agree and bind himself to pay as rent for said land the sum of three hundred and fifty ($350.00) dollars for each and every year of said lease, to be paid as follows: Three hundred and fifty dollars on the 15th day of October, 1909. Three hundred and fifty dollars on the 15th day of October. 1910. Three hundred and fifty dollars on the 15th day of October, 1911. Three hundred and fifty dollars on the 15th day of October, 1912. Three hundred and fifty dollars on the 15th day of October, 1913. Onehalf of such payments to be paid to Mrs. M. F. Haynie at New Boston, Texas, and the other one-half to be paid to J. M. Talbot at the city of Dallas, Texas. And it is further understood that any default on the part of the party of the second part in making any of such payments shall, at the option of the parties of the first part, forfeit this lease and give unto the parties of the first part the right of re-entry upon said land.
"It is agreed, however, that should an overflow of Red river occur during any year of this lease, and the crops growing on said farm be destroyed or materially damaged thereby, then the said Phelps may satisfy the rent specified for that year by gathering and delivering to the said Talbot and Haynie on said farm one-third of all the corn and one-fourth of all the cotton grown and raised on said farm during that year.
"It is further understood between all parties hereto that the parties of the first part are to expend nothing for improvements or repairs upon said land during the period of this lease, and that all repairs or improvements thereon are to be made by the party of the second part at his own cost. And the party of the second part covenants to put the houses on said farm in good tenantable repair and to keep up the said place — that is to say, all the improvements thereon, including the fences — and to deliver the place to the lessors herein at the expiration of this lease with said houses in good tenantable condition and said fences in good repair.
"The party of the second part, in addition to the landlord's lien, which is not waived by the parties of the first part, hereby acknowledges and gives to the parties of the first part an express lien upon all crops of every kind which he may grow or cause to be grown upon said land during the full period of this lease.
"It is, however, further agreed by all parties hereto that, should the parties of the first part make a sale of the land herein leased, then and in that event this lease is to immediately become void.
"In testimony whereof witness our hands in triplicate this the 1st day of December, A.D. 1908.
J. M. Talbot.
"M. F. Haynie.
"W. P. Phelps."
The concluding stipulation in this instrument furnishes the grounds of this controversy.
It is conceded by all parties that a sale of the leased premises took place on February 14th, before the lease by its terms expired, that no other contract was entered into between the appellant and the purchasers, and that after the sale the appellant claimed the right to continue to hold under the terms of his written lease and to be liable only for what he had therein agreed to pay — the sum of $350 — and which was tendered by him.
The controlling question is: What meaning should be given to the words "should the parties of the first part make a sale of the land herein leased, then and in that event this lease is to immediately become void?" Does this mean that the right of continued occupancy should eo instanti cease when a sale was consummated, and that the purchasers might eject the appellant from the premises in the event he refused to vacate? The appellant contends that under a proper construction of that contract his right of occupancy did not terminate upon the occurrence of a sale; that, having entered upon a year, he had a vested right to hold till the end of that year and to pay only the agreed rental. Chief Justice Willson and the writer now think that contention should be sustained. Our altered views do not result from giving a different meaning to the word "immediately," but from the conclusion that it should be differently applied. The language of this lease might, without altering the meaning which the parties clearly intended to convey, be read as follows:
"It is, however, further agreed by all parties hereto that, should the parties of the first part make a sale of the land herein leased, then and in that event this `contract' [lease] is to immediately become void."
We have substituted the word "contract" for "lease" because the context clearly shows that it was the lease contract that was to become void.
The next question then is: What are the rights of the parties when the contract is terminated by the happening of the contingency which is provided for? By its terms the contract does immediately cease to be operative; and it can no longer be relied upon as a basis for the acquisition of any future rights. But the termination of the contract under such circumstances cannot destroy rights which had already been acquired. It operates prospectively, and not retrospectively. In other words, the parties to the agreement evidently intended that, when a sale was made, the contract should no longer be considered alive for the purpose of conferring upon either party any further rights which had not then become vested, but which might under its terms be subsequently acquired. To illustrate: Let us assume that the sale, instead of occurring during the last year of the term, had taken place during the first and about the close of that year; the effect would have been to terminate the lease for five years, and Phelps could not thereafter claim a leasehold interest in the premises for any of the succeeding years. Neither could the lessors have claimed an obligation on his part to pay the future rentals contracted for. To say that the contract conveying a leasehold interest extending over a number of years shall be void or at an end upon the happening of a contingency does not necessarily mean that the right of occupancy and use of the premises shall also cease at the same instant. It cannot be said that the parties *Page 867 
have expressly so stipulated; and to hold that they have inferentially done so is purely a matter of construction. There certainly would have been no conflict in the terms of the contract if the parties had added a stipulation providing that in the event a sale should be made during any current year the tenant should have the right to continue in possession till the end of that year and should be responsible for the rents stipulated in the contract. This would merely be making the terms more specific. In contracts of this character, unless there is some stipulation to the contrary justice to all parties would seem to demand that there should be implied what may be called units of tenure; that is, a period of time which must be considered indivisible in determining when the right of occupancy should cease or what amount of rent should be paid. This period may be a day, a week, a month, or a year, depending in every instance upon the subject-matter of the contract, the use to be made of the premises, and the payments of the rent. Here we have as the subject-matter of the contract a farm, which the contract itself shows was to be planted in corn and cotton, well-known annual crops, and which required the use of the land for practically the entire year. The rental is also to be paid annually. Evidently the parties did not contemplate that the tenant should have the use of these premises for only a fractional part of a year; for that might operate to cause the tenant serious damage in the event the landlord should exercise his option to sell at an inopportune moment. Let us suppose that the landlord had made a sale in June or July, after the cultivation of the crops had been completed, but before a harvest; in such an event, if the right of use and occupancy instantly ceased upon the occurrence of the sale, and the tenant might be ousted, he would lose the entire results of his labor. The rule for the construction of contracts is thus stated in Cyc.:
"The words of a contract will be given a reasonable construction when that is possible, rather than an unreasonable one. The court will likewise endeavor to give a construction most equitable to the parties and which will not give one of them an unfair or unreasonable advantage over the other. Thus, where the meaning is doubtful, the construction will be avoided which will entail a forfeiture." 9 Cyc. 587.
To hold that the parties to this contract meant that the right of possession in the tenant should end with a sale of the premises is to adopt that construction which would give the landlord an inequitable advantage. To illustrate: In this instance the landlord was not required to give the tenant any notice in advance of his intentions to sell; he might without violating his agreement wait quietly till the tenant had expended practically all of the labor and money necessary to mature his crop, and then sell to a purchaser at a price augmented by the value of the tenant's labor and expenditures up to that period. The tenant would lose all, and the landlord would correspondingly gain. Such a construction would give the landlord an unconscionable advantage. It is no answer to say that in this case the sale took place before the crop was planted and cultivated, and that it did not, in fact, operate to the detriment of the tenant. We do not construe contracts by what does actually result, but by what that construction would make possible. If the right of possession could be arbitrarily terminated at any time after the beginning of the current year, before the tenant had expended any labor or money in the preparation for his crop, it might with equal liberty be terminated at any time afterward. There is nothing in the terms of the contract which would confer upon the tenant a right of continued occupancy if the sale is made at one time and not at another. Furthermore, it may be said that such a construction of the contract would operate in the nature of a forfeiture. On one day the tenant might be the owner of valuable crops of corn and cotton worth probably hundreds, or even thousands, of dollars, and without any fault of his own lose it all merely by reason of the fact that the landlord had seen fit to exercise his option to sell.
We have concluded that the proper construction of this contract, and that which the parties intended it should have, is that one year was the least time for which the premises should be enjoyed or paid for; that, when the tenant entered upon the term of one year, his right to a continuation for the remainder of the year became vested. The year was an indivisible unit of tenure, and a termination of the contract did not divest the tenant of the right which he had already acquired under its terms. The parties had the right to make such a contract; they might have made it expressly or by implication. In either event, if they intended to make it, their intentions should be given effect. If the tenant lost the right of possession during a current year, certainly it ought to be held that he was absolved from any obligation to pay rent; yet to so hold we must either say that the lessors intended that he should pay no rent if disturbed before the end of that year, or that he should pay rent in proportion to the time that he occupied the premises. To hold that they intended that he should be entirely absolved from the payment of any rent is to put an equally inequitable construction upon the contract. On the other hand, to say that they intended that he should pay rent apportioned to the time he occupied the premises might require him to pay something for nothing, or even for an actual injury sustained. There is another general rule in construing contracts which shows that the courts are not inclined to permit one party to recover from the other something for *Page 868 
nothing. We refer to the rule adopted in refusing to allow recovery of penalties, notwithstanding the parties have stipulated expressly to that effect. There is no reason why the same liberality should not be applied in construing contracts of this character.
The construction which we think should be adopted does no injustice to any of the parties. The tenant gets the benefit of his labor; the landlord, whether it be the original owner or the purchaser, gets what we must assume the parties regarded, when they made the original contract, as a reasonable rental for the premises. The purchaser cannot claim ignorance of what he would be required to take in the event he purchased; he had notice of the contract, and is charged with that construction which the courts in the administration of justice must place upon it.
The substantial facts in this case being undisputed, we conclude the motion for rehearing should be granted, and judgment here rendered in favor of the appellee for the sum of $350, and in favor of the appellant for all costs both of this court and the court below.