Commercial Auto Loan Corp. v. Keith

1. "A lessor may by express provision limit the general rights of a lessee as regards the use of demised premises."

2. In construing a contract, it should be looked to as a whole to ascertain the intention of the parties. Applying this principle to the contract in the instant case, the trial court did not err in determining that the provisions were not inconsistent.

DECIDED APRIL 26, 1949. REHEARING DENIED MAY 18, 1949. This case was tried in the court below by the judge alone, without a jury, on an agreed statement of facts, as follows: "Defendant below, Commercial Auto Loan Corporation (now plaintiff in error), executed a lease agreement to premises at 113 Spring Street, Northwest, Atlanta, Georgia, in which W. A. Mitchell was Lessor and defendant Lessee, for a term of five years from October 1st, 1945, to September 30th, 1950, for a monthly rental of $250 per month. Plaintiff below, Mrs. Mabel S. Keith, acquired the property by purchase from W. A. Mitchell on March 24th, 1948, and became landlord by operation of law. Following plaintiff's purchase, defendant paid rent to plaintiff as landlord through month of May 1948. During the month of May 1948 plaintiff refused to allow defendant to sublet the premises to be used as a restaurant, and defendant immediately vacated the said premises and refused to pay rent thereafter. Plaintiff sued defendant for rent accruing under the lease agreement for months of June, July, August, and September, 1948, at $250 per month, or $1000. Plaintiff also claimed attorney's fees, having given defendant notice of the intention to sue for and claim of attorney's fees of ten percent, or $100, pursuant to Code § 20-504 of the Georgia Civil Code, the lease providing for attorney's fees. The lease agreement is attached to this stipulation for construction by the court. The sole question for decision is whether or not defendant had a right to sublet the premises for restaurant purposes. If so, judgment should be for the defendant. If plaintiff was justified in refusing to allow the subletting of the premises for restaurant purposes, then judgment should be for the plaintiff. Trial by jury is waived by counsel for plaintiff and defendant; and it is agreed that the court may decide the case upon the stipulation submitted, as a question of law."

The sole question presented is, whether under the particular lease in question, the tenant, Commercial Automobile Loan Corporation, had the right to sublet the premises in question for use as a restaurant. If it did, it is expressly stipulated that the judgment should be for the corporation; if not, for Mrs. Keith. All questions as to whether the parties have pursued proper remedies are eliminated from the case. The only parts of the lease in question pertinent to the issue thus presented are paragraphs 3, 10, 25 (a), and 26. These paragraphs read: "3. Premises shall be used for loans and automobile financing purposes and no other. Premises shall not be used for any illegal purpose; nor in violation of any valid regulation of any governmental body, nor in any manner to create any nuisance or trespass; not in any manner to vitiate the insurance or increase the rate of insurance on premises. . . 10. Lessee may not, without the prior written consent of Lessor endorsed hereon: assign this lease or any interest thereunder, or sublet premises or any part thereof, or permit the use of premises by any party other than Lessee. Consent to one assignment or sub-lease shall not destroy or waive this provision, and all later assignments and sub-leases shall likewise be made only upon prior written consent of Lessor. Sub-tenants or assignees shall become liable directly to Lessor for all obligations of Lessee hereunder, without relieving Lessee's liability. . . 25. (a). In so far as the following special stipulations conflict with any of the foregoing provisions, the following shall control: 26. The Lessee has the right to sublet all or any portion of the leased premises it being understood and agreed that any such subletting will not affect the responsibility of the Lessee." (Italics ours.)

Paragraphs 3, 10, and 25 (a) are a printed part of the printed blank form of the lease supplied by the Lessor's agent except the italicized words in paragraph 3, to wit: "loans and automobile financing." These words were typed into the printed form in paragraph 3. Paragraph 26, above quoted, under "special stipulations" was typed and was not originally in the printed form. The court below was of the opinion that the premises could not be sublet under this lease, to be used as a restaurant, and entered judgment accordingly for the landlord, Mrs. Keith. 1. It is well settled and indeed counsel for the plaintiff in error agree that a lessor may, by special provisions, limit the general rights of the lessee regarding the use of the demised premises. In the case of Asa G. Candler Inc. v. Georgia Theater Co., 148 Ga. 188 (1) (96 S.E. 226), the Supreme Court said: "A lessor may by express provision limit the general rights of a lessee as regards the use of demised premises." We deem this sufficient on this principle without citing other authorities.

2. It is contended by the plaintiff in error that the lease contract now under consideration is inconsistent. This contention of inconsistency is based upon the provisions of paragraph 3 on the one hand, and paragraphs 25 (a) and 26 on the other hand. It is insisted very ably that, while the words, "loans and automobile financing purposes and no other," are set out in paragraph 3, a portion of this, to wit, "loans and automobile financing," was the only portion of that paragraph which was typewritten into the printed form furnished by the agent of the lessor; and that paragraph 25 (a), taken in connection with a special stipulation as set out in paragraph 26, which paragraph 26 is entirely typed as a special stipulation, should prevail; and that a proper construction of the contract, when thus construed, would authorize the plaintiff in error to sublet the premises in question for any legitimate purpose notwithstanding the provisions in paragraph 3. The Supreme Court, in Rosen v.Wolff, 152 Ga. 578, 588 (110 S.E. 877), had this to say: "But it may be said that the Federal System of Bakeries was authorized under its lease to sublet to any ``reputable business,' and this gave them the power to sublet the premises for any use. We do not so construe this provision. The provision in the lease that the lessee was only to use the premises for a bakery and for no other purpose, and the provision in regard to subletting, must be construed together. It would be a strange construction of this provision to hold that the lessee was restricted in the use of the premises to that of a bakery only, but was authorized immediately to sublet, with the landlord's consent, to another for any use or business. Construing the two provisions together, they mean that the lessee could sublet the premises to any reputable concern for the purpose of conducting a bakery. So, in our opinion, the Federal System of Bakeries did not acquire under its prior lease any right which would give it authority to lease these premises to another to conduct any business other than that of a bakery. Having no such right, it could not give to its tenant any greater right than it possessed." While the lease in that case is not identical with the lease in the instant case, nor are the facts, still we think that the principle involved is sufficiently analogous to be applicable, if indeed not controlling. Counsel for the defendant in error contends that that case is controlling. Counsel for the plaintiff in error contends in effect that, but for paragraph 25 (a) in the contract in the instant case, that case would be controlling. At least this is conceded in the argument. To this construction of the contract in the instant case we can not agree. We must construe the whole contract together and endeavor from its terms to ascertain the intention of the parties. We can not conclude that there is any inconsistency in the terms of the contract in the instant case. It would seem that, when we construe the contract as a whole and give effect to its provisions, there is no inconsistency. The plain and express intent, to our minds, is shown by the provisions of paragraph 3 that the premises are to be used for "loans and automobile financing purposes and no other," and paragraph 25 (a) and paragraph 26 provide for the subletting of the premises by the lessee. If such authority to sublet is exercised by the lessee or its assigns, the premises must be sublet for purposes only as specified in paragraph 3. While it does not appear in the written brief, counsel for the plaintiff in error urged in his oral argument to the effect that the lessee did not want to sublet to a competitor. We can not follow the logic of this reasoning. It will be noted that in paragraph 26 the lessee has the right to sublet "all or any portion of the leased premises." The lessee might desire to go out of business; might desire to sublet a portion of it to a subsidiary. There are many other ways that one might think of where the lessee could sublet the premises or a portion thereof for the purposes provided for in paragraph 3.

We think that the trial court properly construed the contract involved in the instant case.

Judgment affirmed. MacIntyre, P. J., and Townsend, J.,concur.