Boyle v. Peabody Heights Co.

Miller, J., delivered the opinion of the Court. The appellee a corporation duly incorporated under the laws of this State, being the lessee for a term of ninety-nine years renewable forever, of certain real estate situated in Baltimore County, on the 5th of June, 1872, subleased several parcels of the same to Adam J. Gosman. [627] Afterwards on the 29th of June, 1876, Gosman assigned and conveyed these premises to Juan Boyle, the appellant, and he, on the 6th of September, 1876, filed a hill against the appellee, praying that the latter may he decreed to executed a new sub-lease to him of these premises. The main ground upon which this relief is asked, is that a covenant contained in the original suh-lease to Gosman, stipulates and provides for the execution of such new. lease to his assignee. The covenant relied on is in these terms : “ and also that at any time during the continuance of this demise the Peabody Heights Company of Baltimore City aforesaid, or its assigns, shall and will, on payment to it or them of ten dollars as a fine therefor, execute and deliver, or cause and procure to he executed and delivered to the said Adam J. Gosman, his executors, administrators or assigns, at his or their request and cost, a new suh-lease of the above demised parcel of ground and premises or either of them, reserving to the said lessor a reversion of one day therein: which new suh-lease shall he subject to the same rents, and containing the like covenants as are herein contained, and in particular a covenant for perpetual renewments, so that this lease and the estates created thereby, and each and every of them may be renewable and renewed from time to time forever.” The appellee admits its obligation under this covenant to execute a new lease, to take effect after the expiration of the term originally created, hut denies that it is hound to execute a new lease such as the appellant demands, to take effect immediately and covering the same period of. time as that covered by the original term. It contends, and there can he no question of the soundness of the position, that if the new lease demanded should he executed' without making Gosman a party thereto, the original lease would be destroyed, and he would be absolved from his covenant to pay the rent, as well as from the other covenants on his part which that lease contains, whereas, if no such [628] new lease be executed, be will remain liable on these covenants notwithstanding his assignment to the appellant. It is by reason of this effect of the new lease demanded the appellee resists its execution, and contends that by the true construction of the covenant relied on, no such obligation is imposed on the lessor. This requires us to ascertain the true meaning in this respect of the covenant in question. Like all other contracts the real intention of the parties to it must control its interpretation. The lease in which this covenant is contained conveys the property for all the rest and residue, save one year, of the term of years yet to come and unexpired of the lessor therein, and reserves a yearly rent of $159.87£, on each of the parcels of ground thereby demised, and this rent, Grosman, the lessee covenants to pay, as well as all taxes or other assessments levied or to be levied or charged on the premises, or on the rents above reserved. It also contains a covenant, “that whenever either of the lots hereby demised are improved by the erection of such building or buildings as maybe approved of by said company, and required by the conditions of this lease the company will execute to the said Adam J. Grosman, his executors, administrators or assigns, a. good and sufficient original lease of said lot or lots of ground so improved, subject to the rent hereby reserved, with a covenant of renewal forever in the usual way such leases are prepared in the City of Baltimore, with a covenant also in said lease for the redemption of each of said rents at any time within eight years from the first day of January, 1872, on the payment of” a specified sum. Then follow provisions as to what character of buildings shall be erected, of what size, and how located. From 'these terms and conditions it appears the property was unimproved at the time this sub-lease was executed, and that the parties contemplated it should be improved, and that when the improvements were made by which payment of the rent would be more effectually secured, it [629] should he superseded by an original lease placing the subtenant on the footing of an original lessee for ninety-nine years, renewable forever, with the privilege to redeem the ground rent, and make himself owner in fee within a specified time In that state of case and until the improvements were made, it was important as well as natural and reasonable for the lessor to lease to a responsible tenant upon whose ability to pay the rent he could depend, and not to bind himself in this temporary arrangement by any covenant, by which the lessee, if dissatisfied with his bargain could escape from that responsibility; and it is also fair to presume, that when the lessee took this lease he contemplated making the improvements, and was unwilling when he made them to he held to the position of a mere sub-lessee, but desired and stipulated for the better status of an original lessee, with the privilege of becoming the fee-simple owner of the improved property. That, we think, was the intention of both parties to this instrument when it was executed. In our opinion it was its chief design to subserve the temporary purpose we have indicated, viz., to secure to the lessor the payment of the rent until the improvements were made, through the personal liability of a responsible tenant, and then to give to the latter the rights and privileges of an original lessee with a redeemable ground rent. Now is there any thing in the terms of this covenant which forbids a Court to place this construction upon it, and compels the opposite construction under which it would be quite competent for G osman to escape all liability by assigning to an irresponsible party, and then inducing the party to demand and enforce the execution of a new lease to himself as assignee? We think not. On the contrary, by a fair reading of this covenant it seems to intend that the new leases for which it provides shall have the effect to preserve and not to destroy the original lease, and that is manifested by the terms, “so that this lease and the estates created thereby, and each and every of [630] them may he renewable and reneioed from time to time forever.” This is the governing and controlling clause of the whole covenant, and expresses the purpose for which it was entered, viz., to preserve the lease for its original term, and the estates which it creates, and to continue them forever. To accomplish this and carry out what seems to us to have heen the intention of the parties, a new lease if required under this covenant, should he made to commence and take effect from the expiration of the original term. It is usual to make an express stipulation to this effect where there is an original lease creating a°term for ninety-nine years renewable forever, and upon the omission thus to state expressly when the new term should commence, is founded the main and strongest argument on the part of the appellant, that the parties here had a different intention. But the insertion of these words is not essential if by other terms and provisions, and the character of the whole instrument, the same intention is made to appear, and that intention is, in our judgment, manifest upon the face of this conveyance. We therefore sustain the appellee’s construction of this covenant. (Decided 14th June, 1877.) . The other ground upon which the appellant claims relief in his hill, is that the lines of two of the lots described in the lease to Gosman, are so inaccurately and vaguely run that it is uncertain what property if any passes thereby. Under the construction we have placed upon the covenant for new leases, it is obvious, the appellant is not entitled to relief upon this second ground, without making Gosman a party to the hill and requiring him to he united in the new lease, by which the mistaken or inaccurate description may he corrected. And the appellee has consented, and makes no objection to the new lease to which Gosman shall he a party, in order to remedy any such defective description, we must affirm the decree appealed from, which dismisses the bill with costs. Decree affirmed.