Snow v. Nash

Felton, J. William A. Snow and J. B. Bryan petitioned Bibb Superior Court for a declaratory judgment, naming as defendant therein Charles E. Nash. The plaintiffs sought a declaration of their rights under certain lease agreements existing between them and the defendant. The court, sitting without the intervention of a jury, found for the defendant, and the plaintiffs except in the main bill of exceptions. On August 1, 1945, Charles E. Nash, as lessor, and The Candlelight, a corporation, entered into a lease agreement on certain real property in Bibb County. The only provision of the lease that we are now concerned .with is as follows: “The lessee covenants and agrees, for itself and its successors, that, for and during the entire term of said lease and any and all renewals thereof, at its own expense, it shall: . . . (2). Not transfer or assign said lease or any interest therein to anyone without first obtaining the written consent thereto of the lessor.” On September 10, 1945, Charles E. Nash, as lessor, and J. A. Snipes and William A. Snow, as lessees, entered into an agreement which in part reads as follows: “For and in consideration [639] of the sum of five dollars ($5.00) paid by the lessees to the lessor, the receipt of which is hereby acknowledged, the lessor hereby leases to the lessees, and the lessees hereby lease from the lessor, the property described in an agreement dated the 1st day of August, 1945, between Charles E. Nash and The Candlelight, Inc., for a term of five (5) years commencing the 15th day of September, 1945, with the right to renew for two additional five-year periods upon the same conditions, in accordance with the terms and conditions of said agreement, reference to which is here made for the terms thereof and by reference incorporated herein, . . . and subject to the following conditions and agreements: . . . (5) In the event of the dissolution of the partnership between the lessees for any cause whatsoever, it is agreed by the lessor that the conditions of this agreement may be performed by either lessee and the partner withdrawing from the business shall be discharged from any obligation for future performance of the covenants herein. The surviving or partner continuing the business shall have the right to introduce a new partner, who shalkhave the same rights hereunder as the original lessees.” (Emphasis supplied.) Subsequently to the agreement of September 10, 1945, the partnership between J. A. Snipes and William A. Snow was dissolved, and thereafter William A. Snow introduced J. B. Bryan as a new partner in the business conducted on the leased premises. William A. Snow now desires to retire from the partnership of Snow and Bryan and to dispose of his interest in the partnership by selling same to J. B. Bryan; and Bryan desires to introduce a new partner to operate the business with him .as a partnership. The defendant Nash contends that section (5) of the agreement of September 10, 1945, relating to the introduction of a new partner in the business upon the dissolution of the old partnership, was personal to and could be exercised only by the named lessees in the agreement, that is, Snow and Snipes, and that, since the dissolution and introduction provision had been invoked once, it was now inoperative, and that the dissolution of the partnership of Snow and Bryan and the introduction of a new partner by Bryan would constitute an assignment of the lease which, under the terms of the lease of August 1, 1945, would require the written consent of the lessor, Nash. [640] The contentions of the lessor are not well founded for several reasons. The original lease was between the lessor and a corporation, in which the stipulation against assignment without the lessor’s consent gave to the non-assignment provision a particular meaning, to wit, that the lease could not be assigned in a manner in which a corporation could assign. When the new lease was made, the non-assignment provision was incorporated into the new lease by reference to the first lease, and the provisions with reference to the withdrawal and substitution of parties were inserted in the new lease. The non-assignment agreement was expressly made subject to the Withdrawal and substitution of partner provision. In view of the fact that the new lease was made by the lessors with a partnership and its members, and contained the withdrawal and substitution agreement to which the non-assignment provision of the original lease was subject, the non-assignment provision will be construed to mean such assignments as the partnership might make in the same manner as corporations could make an assignment, for the reasons that the new lease was made with a partnership and the non-assignment provision was expressly modified by the withdrawal andi substitution agreement, which was the introduction and approval of a method of assignment or transfer entirely peculiar to partnerships. Then again, the incorporation into the new lease of the non-assignment agreement by reference, under the facts of this case, did not have the effect of placing this provision chronologically before the withdrawal and substitution agreement so as to give it precedence over the withdrawal and substitution agreement. Under the facts, the intention of the parties as it appears from the entire instruments will be given effect. In the next place, the lessor admits and concedes that the withdrawal and substitution agreement is valid and binding, but contends that it permits only one withdrawal of a partner and one substitution. This particular provision is paragraph 5 in the new lease. Such a concession by the lessor is inconsistent, because he agrees that paragraph 5 is valid for one withdrawal and substitution but no more, and he bases his argument for such a limitation on the non-assignment provision in the original lease with the corporation. If the non-assignment provision controlled and prevented any withdrawal or substitution, it would have prevented the first withdrawal and substitution as well as additional ones. [641] Paragraph 5 of the new lease is valid for all purposes or it is not valid at all. If it is contrary to a dominant non-assignment provision, it goes out. If it is not contrary to the non-assignment agreement, and we hold it is not, and is valid at all, and we hold that it is, it is valid for all purposes and will be given full force and effect. Irrespective of what is said about the lessor’s concession as to paragraph 5 of the last lease, we hold that paragraph 5 is effective and binding on the parties for the other reasons given. That leaves only one question more to be decided, and that is, what is the meaning of paragraph 5. This paragraph was not a personal privilege of Snow and Snipes which could be exercised only once. It stated that the new partner “shall have the same rights hereunder as the original lessees.” This provision, allowing dissolution and substitution, was a right of each of the original lessees under the later lease agreement. When Bryan was substituted for Snipes as a partner, under the clear and unambiguous language of the later agreement he became vested with all the rights Snipes and Snow had under the lease and agreement, including the right of dissolution and substitution. To hold that either Snow or Bryan could not dissolve and introduce a new partner into the business without the consent of the lessor, would be to deprive Bryan of one of the rights under the lease and agreement held by the original lessees. If the lessor intended that at least one of the original lessees would be held to the covenants of the lease and agreement during their entire duration, he should have so provided in the' agreement. Under a proper construction of the lease and agreement, without the consent of the lessor, Snow and Bryan could dissolve partnership and Bryan could introduce a new partner, who would assume Snow’s rights and interests in the lease and agreement, and Snow would be discharged from any future performance of the covenants in the lease and agreement. The court erred in finding against the contentions of the plaintiffs and in entering a judgment accordingly. The defendants in error in the cross-bill of exceptions move to dismiss the cross-bill on the ground that the questions presented therein have become moot. The plaintiff in error in the cross-bill concurs in this motion; therefore, the cross-bill of exceptions is dismissed. [642] Judgment reversed on the main bill of exceptions, and the cross-bill of exceptions is dismissed. Gardner, P. J., Townsend, Carlisle and Nichols, JJ., concur. Quillian, J., dissents.