Court Opinion

ID: 9454703
Source: CourtListenerOpinion
Date Created: 2023-08-04 18:55:21.758536+00
Date Added: 2024-06-11T17:34:15.331832
License: Public Domain

COWEN, Chief Judge
(dissenting):
On the basis of his findings of fact, the trial commissioner concluded that
* * * Adverting, the plaintiff’s contention would in effect impose an unrealistic and unintended limitation on the defendant’s right to cancel by confining its exercise to the single day when the Operations and Administration buildings were officially completed. The plaintiff thus urges a strained construction of the word “coincident”, whereas in the context used and in the absence of compelling proof to the contrary we must assume that the parties intended the logical and natural interpretation that as soon as the new quarters were ready for occupancy by SSA there would be no further need for plaintiff’s premises unless some other Government requirement developed. We read the disputed term in its most natural sense to mean that the defendant could cancel the lease only if the new buildings were ready for occupancy, and at no time before but at any time thereafter. It is noted in passing that this interpretation is consistent with the letter of intent which preceded the June 19, 1958 supplemental agreement, but the letter of intent is not indispensable to the result.
I would adopt his opinion and add the following reasons for denying plaintiffs’ right to recover in this case:
On February 27, 1961, when the Government renewed the lease, it exercised its right to extend the period of the lease on the same terms and conditions of the! original lease as amended. It is axiomatic that, in the absence of an agreement to the contrary, the exercise of a convenant to renew imports a holding for the additional period on the same terms, conditions and covenants as those contained in the original lease. 51C C.J.S. Landlord & Tenant § 71.
The court agrees that the phrase “coincident with the cancellation” in the second sentence of the termination provision raises an ambiguity which authorizes the use of parol evidence to determine the intent of the parties. To hold otherwise would be to say that the Government had the right to terminate the lease only on one single day during its term and, further, that it would have *1311had to anticipate exactly 90 days prior to the completion of the Social Security Building, that the building would be completed and ready for occupancy 90 days thereafter and then give 90 days’ notice and move out on the 90th day. Obviously, such a construction of the language would be ridiculous.
There is no explanation in the record for the variation between the provisions of the letter of intent of June 3, 1958, and the supplemental agreement of June 19, 1958. All we know is that the letter of intent was routed through the normal course for preparation, review, and approval in the GSA Regional Office and that the supplemental agreement was prepared by some representative of the Government. There is nothing in the record to indicate that there were any negotiations or communications between the parties from the date the letter of intent was signed until the date the supplemental agreement was executed. Under these circumstances, it seems to me that we must consider the provisions of the letter of intent in connection with those of the supplemental agreement to determine the intent of the parties. It is to be noted that the letter of intent in paragraph (1) thereof stated:
The lease to be firm from July 1, 1958 through December 31, 1959, can-cellable thereafter on ninety (90) days notice in the event the Social Security Administration Building in Baltimore is completed; [Emphasis added].
The ordinary and natural meaning of “in the event” is “if” rather than “when”.
The disputed paragraph of the supplemental agreement read as follows:
“The Government shall have the right to cancel this lease at anytime after December SI, 1959 upon ninety (90) days notice in writing to the Lessor, such notice to be computed starting with the day after the date of mailing. This cancellation right is exercisable only in the event that the New Social Security Administration Building, now under construction near Baltimore, Maryland, is completed and ready for occupancy coincident with the cancellation.” [Emphasis added.]
Although the first sentence granted to the Government the right to cancel the lease at any time after December 31, 1959, the court construes the second sentence as a limitation upon the cancellation provision and holds that the right to terminate was exercisable only at the time of the completion of the building. The court avoids an untenable construction of the cancellation provision by declaring that “coincident with the cancellation” means within a reasonable time after the new building was ready for occupancy. In my view, however, this interpretation of the provisions of the contract is contrary to decisions of the courts which have considered similar termination and cancellation provisions of lease contracts. Cates v. McNeil, 169 Cal. 697, 147 P. 944 (1915); Lyons v. Cantor, 363 Pa. 413, 70 A.2d 285 (1950); Brennan v. Shore Bros., Inc., 380 Pa. 283, 110 A.2d 401 (1955), and Associated Cotton Shops, Inc. v. Evergreen Park Shop. Pl., of Delaware Inc., 27 Ill.App.2d 467, 170 N.E.2d 35 (1960).
It seems obvious to me that the words “only in the event” in the cancellation clause are not used to denote time but refer to the happening of a contingency and that the phrase means “if” and not “when”. The phrase “coincident with the cancellation” is ambiguous, and in light of the first sentence of paragraph 3 of the cancellation provision and the clear import of the words “only in the event” in the second sentence, cannot reasonably be construed to delimit time-wise the Government’s cancellation right.
The parties have not cited any case in which a court has construed a lease cancellation provision that bears any similarity to the agreement before us. However, in my opinion, the decision of the Supreme Court of Pennsylvania in Brennan v. Shore Bros., Inc., supra, is so analogous that I would hold it to be de*1312cisive of the issue here. In that case, the parties, had entered into a lease for a term of two years. Before it expired, they negotiated a new lease for a term of three years, beginning June 25, 1950. Paragraph 2 of the new lease provided:
“The Lessee shall have the option to renew this lease, upon the same terms and conditions as herein set forth, for the further period of Two Years from June 25, 1953, by giving to the Lessors 90 days’ notice in writing prior to that date. However, the Lessors shall have the option to terminate this lease at any time within the term or the aforesaid extension thereof, upon the death of any one or more of the Lessors, in which case such termination shall be signified by a joint notice in writing from the surviving Lessor or Lessors and the personal representatives or heirs of the deceased Lessor or Lessors, given 90 days prior to such required termination.” [Emphasis added.]
On February 25, 1951, one of the lessors died but no notice of termination was given at that time by the lessors. On February 6, 1953, more that 90 days prior to the termination of the lease, the lessee exercised its option to extend the lease for a further period of two years. On February 24, 1953, the surviving lessors exercised their option to terminate the lease and gave the required notice. In the litigation that followed, the lessee argued that the lease had not been terminated in accordance with its terms, because the notice to terminate was not given at the time required. The lessee contended that the words “at any time” must be construed to mean within a reasonable time after the death of one or more of the lessors.
In rejecting this contention, the Supreme Court of Pennsylvania held:
It is our opinion that paragraph 2 of the lease means that the lessors, if any one of them dies within the term (or extension) of the lease, have a paramount option to terminate the lease “at any time within the term” (or extension), provided they and the personal representatives of the deceased lessor give to lessee a written 90-day termination notice. 110 A.2d at 404.
The court then quoted with approval the following statement from Lyons v. Cantor, supra:
“ * * * So here, ‘upon any sale of the real estate’ means, not when, but if any such sale occurs, that being the condition upon which alone the lessor was to have the right to terminate the lease; there is nothing in the use of the word ‘upon’ which suggests that the phrase ‘upon any sale of the real estate' was intended to relate back grammatically to the designation of the period during which the lease might be terminated.” 110 A.2d at 404.
Finally, the court held:
Lessee’s interpretation that the words “at any time” mean “at any reasonable time after the death of a lessor” requires the insertion of a word which is not in the lease and which changes its clear language and, in our judgment, its meaning. It follows that lessee’s interpretation cannot be adopted even though the equities might be in the lessee’s favor. 110 A.2d at 404.
Applying the reasoning of the court in that case, I would hold that when the Government renewed the lease on February 27, 1961, the cancellation provisions became a part of the extended lease, that the right to terminate the lease was properly exercised, and that plaintiffs’ petition should be dismissed.
SKELTON, J., joins in the foregoing dissenting opinion.