Hysmith v. Mills

Smith, J.

The decision in this case turns upon the-construction, to be given the following contract:

‘ ‘ This agreement to lease made and entered into this the 1st day of January, 1917, by and between W. R. Cain, hereinafter known as lessor, and R. E. Mills, hereinafter known and spoken of as lessee, witnesseth:-

“That the said lessor, hereby leases, demises and rents to the said lessee a certain store house situated on the north side of Main street in the town of Cotton Plant, Arkansas, said store house being a second door from the corner of Main street and Central avenue of Cotton Plant, Arkansas, and being the store building now occupied by and heretofore occupied and leased by the said lessee herein.

i “The lessee agrees to pay a monthly rental of $35 per month for said building. The sum of $30 to be paid in cash in advance each month and the sum of $5 to be credited to the lessee as hereinafter set out after any improvements on said building made by said lessee. Before any repair hereinafter provided for shall have been made and after said repairs, alterations • or changes or improvements shall have been paid for as hereinafter set out at the rate of $5 per month, the said lessee shall pay the said stipulated monthly rental of $35 per month in advance. It is agreed that the lessee may make such repairs to said building and add such fixtures as he may desire and the same shall be made at the expense of the lessor as herein stated, provided the cost of all repairs, alterations, fixtures and improvements in excess of $300 shall be borne and paid for by lessee. The said lessee in making changes, alterations or improvements costing less than $300 shall keep an account of the cost of same and shall be entitled to a monthly credit of $5 to be taken from monthly rent of $35 until said improvements paid as set out above at the rate of $5 per month out of the monthly rental until said lessee is reimbursed for the alterations and improvements for which he has paid not exceeding $300 in total cash. The lessor is to receive at no time a monthly rent of not less than $30 in advance, and, after such improvements as are made are paid for in the above manner by the lessor, he shall receive a monthly cash rental of $35 instead of $30.

“It is mutually agreed and understood that should the lessor dispossess the lessee at any time for any cause then the said lessor shall reimburse the lessee for the amount he has spent in improvements and fixtures as above set out and for which he may not have been fully paid at the agreed rate of $5 per month. It is also further agreed that should the lessee for any cause abandon or give up on his own accord this lease, then said lessee shall not be entitled to the reimbursement that he has not received at the rate of $5 per month in the manner above set -out at the time he abandons or give up this lease. ’ ’

The complaint based upon this contract alleges that the lease contract was duly recorded. That Cain had sold and conveyed the property to Hysmith, but before doing so had tendered to Mills the sum expended on improvements, less the portion that had been discharged by the monthly credits of $5 provided by the contract.

A demurrer to the complaint was sustained, and this appeal is from that order.

To properly construe this contract, we should get the perspective of the parties who made it as shown by its recitals. And it thus appears that Mills desired to lease the building, provided he was allowed to “make such repairs to said building and add such fixtures as he may desire, and the same shall be made at the expense of the lessor as herein stated, provided the cost of all repairs, alterations, fixtures and improvements in excess of $300 shall be borne and paid for by the lessee.” In other words, Mills was allowed to make as extensive repairs, etc., as he pleased, provided only $300 of the cost should be charged to Cain. This $300 could be discharged or repaid only by occupancy with a credit on that account of $5 per month, so that sixty months, or five years, would be required to discharge the full amount of the repairs, etc., for which Cain agreed to allow credit if repairs, etc., so extensive were made.

Having spent the $300 to adapt the building to his uses, Mills would forfeit $5 for each month he failed to occupy the building for the time necessary to repay himself for his repairs, etc. On the other hand, Cain agreed that if he should dispossess Mills at any time for any cause he would “reimburse the said lessee for the amount he has spent in improvements and fixtures as above set out and for which he may not have been fully paid at the agreed rate of $5 per'month.”

We think this language last quoted was not intended to create a tenancy from month to month, and did not give Cain the right to terminate the contract at his pleasure. We think the parties intended a lease not exceeding five years, the time to be determined by the value of the repairs, etc., made by Mills, but not exceeding $300. The very size of this amount as compared with the cash monthly rental to be paid, towit, $30, confirms us in this view. It is unlikely that Mills would have agreed to expend so large a sum when his tenancy might be terminated at any time after thirty days’ notice, and especially is this true when it is remembered that he would forfeit his expenditures if he ceased to occupy the building, and we conclude that the provision requiring Cain to reimburse Mills if, for any cause, he should dispossess him was inserted for Mills’ protection,and not for the purpose of giving Cain the right to terminate the contract at his pleasure after thirty days ’ notice.

This was the construction of the contract given by the court below, and the judgment based on that construction is affirmed.