Copeland v. Goldsmith

Bardeen, J. The ruling of the trial court was manifestly correct upon two grounds: 1. Contracts will always be construed to give effect to the entire subject matter, in accordance with the obvious .intention of the parties. The real point to be attained is to ascertain the meaning and understanding of the parties, as [440] shown by the language used, when applied to the subject matter. Under the terms of their lease, plaintiffs were to-pay rent in advance, at an agreed rate. If, during the term of the lease, the lessor should rent any office on the Wisconsin street front for a less sum than plaintiffs were paying, “ such reduction shall also be made to lessees for term of this lease.” Lessees paid their rent at the prescribed rate during the time the lessor held the premises. After the assignment of the lease to the insurance company, one of the offices on the Wisconsin street front was leased at a rate less than that plaintiffs had been paying. They had paid their rent to the lessor at the old rate, and now claim that, under the clause of the lease quoted, they may recover from him the difference between the amount they have paid and what they would have paid at the reduced rate. In other words, they insist that this clause in the lease must be construed into a covenant to refund rent collected at the old rate. In support of this contention, they say there cannot be a reduction “ for term of this lease ” unless they are paid back a portion of the rent collected. We cannot agree with this construction. It seems to us quite plain that there was no covenant to refund any portion of the rent paid, but that the covenant relied upon has reference to rent to accrue during the remainder of the term. The case of Cross v. Button, 4 Wis. 468, is closely in point. 2. It is conceded that, up to the time of the assignment of the lease to the insurance company, plaintiffs were not entitled to any reduction in rent. At that time liens to the amount of over $46,000 were in process of foreclosure, which were paramount to the claims of ail parties. Goldsmith was in default on his mortgage, and foreclosure was threatened. The insurance company stepped in and agreed to take up-the outstanding liens, and to forego pressing its foreclosure for two years. Then it was that the agreement between the company and plaintiffs was made. This agreement re [441] cites that disputes had arisen as to the leasing of portions of the building at lower rentals, that claim is made against Goldsmith on account thereof, and that both parties desired to agree upon a fixed sum so as to avoid disputes. Thereupon plaintiffs’ rent was fixed at ninety cents per square foot, beginning March 2, 1896, and the sum aforesaid was to be in full payment of and in lieu of the sum stipulated in the original lease. This agreement was a substitute for the covenants contained in the original lease as to the rent reserved and the rights of the parties thereunder. By it the plaintiffs agreed to pay a definite sum absolutely, without reference to the terms that might be granted other tenants, and without qualification or reservation. The covenants in the original lease with reference to rent reservations became entirely abrogated. The fact that thereafter a room was rented at a less rate, on the Wisconsin street front, did not revive these defunct covenants. Under no theory of the case are we able to discover any right in the plaintiffs to maintain this action. By the Court.— The judgment of the superior court of' Milwaukee county is affirmed.