The J. G. McCrory Ohio Co. v. Rabbitts et al.
Landlord and tenant — Leases—Construction—Covenant to rebuild after fire — Inoperative before occupancy by lessee — Occupancy by tenant of lessee sufficient, when.
Lessors on April 8, 1914, leased premises for a term of 25 years, beginning September 1, 1918, at a greatly increased rental. The lease contained covenants for rebuilding and for subletting and assignment with the written consent of lessors; it also contained a clause that no obligation to rebuild in the event of fire should “attach pending the beginning of occupancy on the part of lessee.” The lessee never actually occupied the demised premises, but with the written consent of lessors sublet them to a tenant who occupied them until destroyed, by fire on January 23, 1921:
Held: The parties, by use of the quoted clause, had in contemplation the time of occupancy and not the personal occupancy of the lessee; and the occupancy by a tenant of the lessee, with the lessors’ written consent, does not release the lessors from their obligation to rebuild.
(No. 17367
Decided July 5, 1922.)
Error to the Court of Appeals of Clark county.
The defendants in error, hereafter referred to as plaintiffs, brought suit against The McCrory Ohio Company to quiet their title to the premises in controversy. Plaintiffs obtained a decree in their favor in the common pleas court and the case was appealed to the court of appeals, which separately stated its finding of facts and conclusions of law.
On April 8, 1914, plaintiffs and another were the owners of a three-story brick building in the city of Springfield, the lower story of which consisted of four storerooms, one of which, No. 19, was then occupied by the McCrory company under lease from *522the owners, expiring August 31, 1918, at an annual rental of $2,200; the other three storerooms, Nos. 13,15 and 17, were then occupied by Mickler Brothers, lessees under a lease from the owners at an annual rental of $4,500, expiring August 31, 1918. While these tenancies were pending, the owners, as lessors, on April 8,1914, executed a lease to the Mc-Crory company on the three storerooms occupied by Mickler Brothers for a term of twenty-five years, beginning September 1, 1918, at a yearly rental of $10,000, payable in monthly installments. This is the lease concerning which this controversy has arisen. It was therein covenanted further that the lessee, the McCrory company, would not sublet or assign the three storerooms so leased without the written consent of the lessors. In 1916 the lessors leased storeroom No. 19, occupied by the McCrory company, to Mickler Brothers for five years, beginning September 1, 1918. On March 4, 1918, the lessee McCrory company sublet the three storerooms to Mickler Brothers for one year from September 1, 1918, and again sublet the same rooms to Mickler Brothers until March 31, 1921. These sub-lettings were all made with the written consent of the lessors. On the same date, March 4,1918, Miekler Brothers sublet storeroom No. 19 to the Mc-Crory company with the consent of the lessors. The McCrory company did not actually occupy the three storerooms leased to it on April 8, 1914, the actual occupiers until the time of the fire being Mickler Brothers. Under the terms of their lease the lessee, the McCrory company, paid all installments of rent, to the lessors up to the time the building was destroyed by fire on January 23, 1921.
*523The lease to the MeCrory company covering the three storerooms provided that certain repairs and' alterations specifically named were to be made at the expense of the lessors, and that other specified repairs and alterations were to be made at the expense of the lessors and lessees. The lessors also, covenanted that they would insure the building for at least 80% of its value, that in the event of the premises being damaged by fire the building as it then stood was to be repaired as speedily as possible by the lessors, and in the event of the total destruction of the building by fire it was agreed that the premises should be rebuilt by the lessors as speedily as possible, but that the rent should cease until the building was restored fit for occupancy by the lessees. Then followed the clause of the lease which is the cause of this controversy. This clause is found in the paragraph relating to the requirement to rebuild, and is as follows: “That by no implication shall lessors obligation to rebuild attach pending the begwming of occupancy on part of lessee.'’
After the total destruction of the building by fire in January, 1921, the lessors collected $40,000 of insurance on the destroyed building but took no steps to rebuild.
The court of appeals found in favor of the plaintiffs, lessors, and quieted their title, and held as a conclusion of law that the parties intended to use the word “occupancy” found in the lease in the sense and meaning of actual occupancy or possession, and that the lessors’ obligation to rebuild could not attach before the beginning of actual possession of the premises by the MeCrory company. *524The lessee defendant, the McCrory company, filed ifs answer and cross-petition in the common pleas court, asking that plaintiffs be directed to speedily rebuild the premises, or that damages be assessed in its favor, and it asked for judgment for such damages. Both of the lower courts quieted the title of plaintiff lessors, refused to hear any evidence on the cross-petition of the lessee, and dismissed it, whereupon the McCrory company prosecuted error to this court.
Mr. A. N. Summers and Mr. Chase Stewart, for plaintiff in error.
Mr. J. E. Bowman and Mr. J. M. Cole, for defendants in error.
Jones, J.
It is stipulated in the lease that by no implication would the lessors’ obligation to rebuild attach “pending the beginning of occupancy on part of lessee.” The lessee never actually occupied the demised premises; they were occupied until the time of the fire by its tenant .the Mickler Brothers. Counsel for defendants in error insist, and the lower courts agreed with their contention, that no obligation to rebuild attached, as there was no beginning of occupancy on the part of the Mc-Crory company; that under the covenants of the lease the term “occupancy” was used and intended by the parties to mean actual or personal occupancy by the lessee.. Ordinarily the primary and normal meaning should be given to this term, unless it appears from the context of the whole instrument that the term “occupancy” should not be construed in its primary or restricted sense. Upon this feature *525of construction, a large number of eases have been cited which are not specially helpful in the determination of this case. Among others which have been cited, and which are more pertinent than any others, are Morrow v. Brady, 12 R. I., 130, and Lane v. Nelson, 167 Pa. St., 602, wherein the term “occupancy” was construed as including a tenancy wherein the lessee was not in actual possession.
Construing the present instrument as a whole, and construing the clause in question in connection with the entire context, we are driven to the conclusion that the parties did not contemplate, by its use, a personal or actual occupancy by the lessee. Counsel seem to overlook the fact that what the parties had in mind was not so much the character of the occupancy as the time of occupancy. They were contracting with reference to rebuilding in case of fire; the tenancy of the lease did not begin for several years from the time of the execution of the lease; this was the period the clause was intended to cover, and this in a large measure was why the parties used the words “attach pending the beginning of occupancy on part of lessee.” Had the parties intended to restrict the rebuilding clause to the personal occupation of the premises by the McCrory company they would certainly have used some expression in the instrument confining the obligation to such personal occupancy. This was not done anywhere in the lease. Furthermore, that a personal occupancy on the part of the lessee was not contemplated is shown by the fact that the lessors had covenanted that the lessee could sublet and assign the premises with the written consent of the lessor.
*526The lease was executed April 8,1914, its term was not to begin until September 1, 1918, a period of about four years and five months after the execution of the lease. This period was the essential thing the -lessors had in mind, that they should not be required- to- rebuild during this period of four years and five months; this was why' the peculiar language was used to the effect that they should not be required to rebuild “pending the beginning of occupancy on part of lessee.” Another feature that strengthens that view is that after the beginning of the term they were to receive more than double the rent received at. the time the léase was executed, and it could well be maintained that while the lessors did not desire to obligate themselves to rebuild when they were receiving but $4,500 annual rental, they might be willing to have that obligation attach at a time when they were receiving the sum of $10,000 annually, under a term extending for a period of twenty-five years.
Counsel for the lessors insist that the clause in question was made in view of the repairs and alterations to be made,- and that personal occupancy was contemplated because of the fact that these repairs were to be made for the special enjoyment of the McCrory company. This argument is a strained one. Pendency of the beginning of occupancy could have no relation to these repairs, because they could be made only after the beginning of occupancy. Besides, up until the time of the fire the personal occupancy of the lessee did not seem to be a vital matter, for the lessors had given their written consent for the subletting of these premises both before and after the beginning of the term.
*527The judgments of the lower courts will therefore he reversed, and, since neither court heard or determined the questions arising upon the answer and cross-petition, that feature of the case will he remanded to the court of common pleas for further proceedings according to law. The answer and cross-petition of the McCrory company seeks either equitable relief or damages; neither was awarded plaintiff in error in the courts helow.
Judgment reversed.
Marshall, C. J., Hough, Wanamaker, Robinson and Matthias, JJ., concur.
Johnson, J., took no part in the consideration or decision of the case.