Court Opinion

ID: 9591822
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:08:00.069522+00
Date Added: 2024-06-11T18:01:12.550299
License: Public Domain

MR. JUSTICE DAYIS
(concurring):
I agree that the statement of the facts upon which this controversy has been submitted shows no breach of the stipulation against assignment which is found in this lease. Accordingly I concur in the affirmance of the judgment of the district court; but I do so upon a much narrower ground than are the reasons given in the opinion of the Chief Justice.
*432Specifically I affirm for the reasons which the trial court gave in his memorandum decision to this effect: “* * * Under the lease, the sale and transfer of more than 50% of the stock must be made by ‘the present stockholders.’ The stock referred to, unless we resort to speculations, must refer to the stock issued at the time the lease was made. In view of the strict construction required and of the fact that forfeiture is not favored, I can come to no other conclusion than that under the strict terms of the lease, there has been no sale and transfer by the ‘present stockholders of 50% or more of the stock issued by the corporation,’ referring to the time of the lease * # * As repeatedly found in the cases cited, the rule is well settled that a forfeiture may never take place by implication, but must be effected by plain, unambiguous language.”
I think this disposition of the case is sound. Without adding anything to these four quoted sentences I could well rest my concurrence upon the reasons given there by the district judge for his judgment. But because the Chief Justice has gone into greater detail, I am tempted to do likewise.
This court in accord with other courts generally is committed to the rule that forfeitures are looked upon with ill favor, and will be enforced only when the strict letter of the contract requires it. Otherwise stated, to provide for a forfeiture, the intention of the parties that the language employed shall have that effect must not only be plainly expressed, but also written in words which when strictly construed against the party for whose benefit the forfeiture is created clearly and without ambiguity require a forfeiture in the case put. R.C.M. 1947, section 58-212; Finley v. School District No. 1, 51 Mont. 411, 416, 153 Pac. 1010; 3 Williston on Contracts (Rev. Ed.), section 620, page 1787.
It is equally well settled in the law that the covenant or condition in this lease which clogs the right of the lessee to assign is a restriction upon its right of alienation, and is therefore likewise to be strictly construed against the lessors. Here again this paragraph finds no favor with the law; its language and *433impact will not be extended either by construction or implication. Lawrence v. Cooper Independent Theatres, 177 Kan. 125, 276 Pac. (2d) 350; 51 C.J.S., Landlord and Tenant, section 33(b), pages 541, 542; 35 C.J., Landlord and Tenant, section 61, pages 978, 979; 32 Am. Jur., Landlord and Tenant, section 327, pages 296, 297. Precisely in point the Supreme Court of California has said in Chapman v. Great Western Gypsum Co., 216 Cal. 420, 426, 14 Pac. (2d) 758, 760, 85 A.L.R. 917, that “covenants limiting the free alienation of property such as covenants against assignment [of a lease] are barely tolerated and must be strictly construed. * * *”
I do not find it necessary, however, to go to this extreme to dispose of this case. Consistent with R.C.M. 1947, sections 13-702, 13-704, 13-707 and 93-401-15, upon which the plaintiffs rely to sustain their appeal, I read the disputed paragraph for precisely what I see in it. To avoid a forfeiture, I give that language nothing more than its ordinary meaning, as I understand it; a meaning which to me is neither strained nor absurd. But conversely, to sustain a forfeiture, I will read nothing by way of implication into the language of this lease which is not already there clearly and plainly expressed.
So read this paragraph means to me just one thing, viz., that if L. S. Wolcott, Frances E. Wolcott and Frank Strickland, who were the “present stockholders” of the defendant corporation on September 1, 1951, when this lease was made, had sold and consequent upon that sale had transferred as a group to Shoenterprise Corporation 50% or more of the 213 shares of the stock which was issued on September 1, 1951, then the covenant of this lease would have been breached; its condition would have been broken; and a forfeiture might have been enforced, unless the lessors consented. But this is not our ease.
For L. S. Wolcott, Frank Strickland and Ethel Strickland, the stockholders who transferred the 25 shares to Shoenterprise Corporation, were not on September 1, 1951, the “present stockholders”; nor did they transfer 50% or more of the stock issued on that date. Rather they were at best two only of the *434“present stockholders” mentioned in the lease; they transferred less than 50 % of the stock issued on September 1, 1951, -which is the only point of time mentioned in paragraph six. Hence that paragraph was not violated; the condition of the lease was not broken; and no forfeiture resulted, because the lessors did not consent.
To construe this paragraph as plaintiffs’ counsel argue I should, and accordingly to work a forfeiture, I must read the language of paragraph six as though it ran thus: “The sale and transfer by any one or more of the present stockholders of fifty per cent (50%) or more of the stock issued by the corporation and outstanding at any time hereafter * * * ” This I decline to do for the reasons I have given.
To the contrary, however, of my conclusion here it is argued, section 13-702 requires me to construe paragraph six together ■with all the rest of the lease that effect may be given to the “mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.” I agree, and add that section 13-704, upon which reliance is also had, is equally explicit in its command that the intention is to be ascertained from the language of the writing itself, if that “language is clear and explicit, and does not involve an absurdity.” The words used in paragraph six, whatever may have been the reasons behind them, are as I read them clear and explicit. Their meaning I am not to expand by construction; yet for me they involve no absurdity. I may not then consistent with section 93-401-15, upon which the plaintiffs’ counsel also stand, read into this language other words which are not there, however earnest the argument to that end may be. I may not omit from this language words which are there. Nor may I force upon that language a construction which works a forfeiture where I am not clearly required to do so by the words actually used as they stand before me. I have not violated any of these rules, I believe, in reasoning to the result I reach.
I think the argument of counsel for the plaintiffs as presented would be apt, if the suit here were in equity to reform this para*435graph of the lease for mutual mistake. I think that argument is not apposite upon the facts here, which are stipulated in an action for unlawful detainer and accordingly take the language of the lease as it is written; and not as that language might be reformed to conform to what is now said to be the intention of the parties, an intention which I do not find expressed anywhere in the language actually used.
The plaintiffs’ counsel have put one or more hypothetical cases designed to show that the construction which the lower court adopted and in which I concur leads to absurd results. Perhaps so. But results equally absurd follow when I test their theory of what paragraph six means by the same reasoning. After all upon any analysis this paragraph always yields one result which is the same, viz., that its language as written is inadequate to cover all eases which may arise under it. One such case we have at bar, as I understand the facts; for on September 1, 1951, no one apparently foresaw the retirement of the Wolcott stock, or made provision in paragraph six against that event.
I do not see anything in the further argument made for the plaintiffs that the parties to this lease by what they have done under that lease have put a practical construction upon paragraph six which accords with the construction urged by the lessors, and which should therefore be adopted. To be specific: On November 6, 1951, the lessors in writing consented that Wolcott should transfer all but one share of his stock to the corporation that it might be retired. Because then in this writing it is recited that this “transfer of this stock might be considered as a breach of the covenants” of the lease, it is said for the plaintiffs that the parties have themselves construed the lease to forbid the transfer of February 28, 1953, to Shoenterprise Corporation, unless the lessors consented to that transfer also. As I see it this argument proves too much. It makes plain the point only that none of the parties were sure of their ground, but that all the parties intended to insure against a breach.
An isolated instance where the lessors have expressly con*436sented to what might be considered a breach falls far short of the evidence necessary to establish a uniform and continuous practice amounting to a stipulation by the parties that such a transfer was in fact a breach of the covenant or condition in question.
I agree that the rule laid down by this court in Cook-Reynolds Co. v. Beyer, 107 Mont. 1, 16, 79 Pac. (2d) 658, is sound. But I do not agree that we have a case here to which that rule may properly be applied; and I am satisfied the facts of that decision make the distinction I have in mind without further comment by me.