Caranas v. Morgan Hosts-Harry Hines Boulevard, Inc.

460 S.W.2d 225, 1970 Tex. App. LEXIS 2022
CourtCourt of Appeals of Texas
DecidedOctober 2, 1970
Docket17507
StatusPublished
Cited by6 cases

This text of 460 S.W.2d 225 (Caranas v. Morgan Hosts-Harry Hines Boulevard, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Caranas v. Morgan Hosts-Harry Hines Boulevard, Inc., 460 S.W.2d 225, 1970 Tex. App. LEXIS 2022 (Tex. Ct. App. 1970).

Opinion

BATEMAN, Justice.

This case involves the construction of certain portions of a written lease whereby the appellant Maurice Caranas, as lessor, let to the appellee certain commercial property for a term of years. The principal dispute concerns the amount of rent. The lease provides for rent as follows:

“1. Lessee agrees to pay to lessor as rental for the premises as follows:
(A). Base Rental. One Thousand Six Hundred and Fifty Dollars (1650.00) per month, commencing on the first day of December, 1967, and a like payment on the first day of each month thereafter until said lease or any of its options to renew, granted herein, shall expire.
(B). Additional Rental. At such point in time in each lease year as lessee’s ‘gross sales’, as hereinafter defined, shall exceed $250,000, then lessee shall owe ten per cent (10%) of such excess to lessor as additional rental. Said sum shall be determined by computing lessee’s gross sales in excess of $250,000, at the end of each remaining month in the then current lease year, and paying to landlord by the 10th of the month succeeding the month or months in which said additional rental shall accrue, whatever amount ten per cent of the gross sales for that month shall exceed $1650.”

Appellee filed this suit for declaratory judgment ascertaining the meaning thereof. Caranas contended that the total rental provided for by the lease was a base rental of $1,650 per month, or $19,800 annually, plus 10 per cent of lessee’s gross sales in excess of $250,000 each year, and that this additional rental was payable monthly after the gross sales exceeded $250,000, with final adjustment at the end of each contract year, and offered his testimony, as well as that of his attorney, as to negotiations and other events leading up to the execution of the lease, in order to dispel the ambiguity. The trial court, sitting without a jury, excluded this testimony and held that the language in question was not ambiguous and that the provision for additional rental due in any “lease month” during which the total gross sales for that year exceed $250,000 shall be “the amount by which ten per cent (10%) of the monthly gross sales in excess of $250,000.00 for the lease year exceeds the base rental of $1,650.00.”

In his first three points of error on appeal Caranas complains (1) of the holding that the rental provision was not ambiguous, (2) of the refusal of the court to admit the parol testimony, and (3) the error of the court in failing to hold that the intent of the parties was that the annual rent should be $1,650 times 12, or $19,800, plus 10 per cent of the excess of annual gross sales over $250,000,. and that the provision for monthly payment was simply a formula for interim payments pending final deter *227 mination of the aggregate rental for the year.

Our paramount duty is to ascertain the intention of the parties. This must be done, if possible, by considering the lease as a whole and by harmonizing, if possible, those provisions which appear to be in conflict. Certain established rules of interpretation are available and if after applying those rules the conflict or ambiguity remains, and the contract is still susceptible of two reasonable meanings, then, and only then, may extrinsic evidence be received to resolve the ambiguity. McMahon v. Christ-mann, 157 Tex. 403, 303 S.W.2d 341, 344, 304 S.W.2d 267 (1957), and cases cited therein.

It has also been said that evidence of attending circumstances is unavailable to aid in ascertaining the intention of the parties “when the writing plainly and clearly discloses such intention, or is phrased in language not fairly susceptible of more than one interpretation.” Fox v. Lewis, 344 S.W.2d 731, 736 (Tex.Civ.App., Austin 1961, writ ref’d n. r. e.). To the same effect, see Lewis v. East Texas Finance Co., 136 Tex. 149, 146 S.W.2d 977, 980 (1941).

We agree with appellant that the two sentences of subparagraph (B), quoted above, are so in conflict as to create an ambiguity, in that the first states simply and clearly that the additional rental shall be 10 per cent of the excess of $250,000 in gross sales each year, while the second would indicate that such additional rental should be only such portion of 10 per cent of the gross sales in excess of $250,000 as shall exceed the base monthly rental of $1,650.

We think the court erred in holding that the provisions in the lease for payment of rental are not ambiguous. We have been unable to reconcile these two provisions, and the conclusion is inescapable that they are in such conflict that the meaning is obscured. The intention of the parties cannot be determined by examining and giving effect to all of the language used by them. Accordingly, appellant’s first point of error on appeal is sustained.

Ambiguity having been established, it follows that the language of the contract may be read in the light of the attending circumstances and that parol evidence may be heard to explain the ambiguity or apparent repugnancy when such evidence is consistent with the writing, although the terms of the agreement may not be varied by such evidence. Remington Rand, Inc. v. Sugarland Industries, 137 Tex. 409, 153 S.W.2d 477, 483 (1941).

Moreover, we must always bear in mind that the object of the search for the intention of the parties is not the intention which they may have had in their minds but failed to express in the contract, but the intention which they did express therein; “not what the parties meant to say but the meaning of what they did say.” Young v. De La Garza, 368 S.W.2d 667, 670 (Tex.Civ.App., Dallas 1963, no writ); 13 Tex. Jur.2d, Contracts, § 123, pp. 291-292.

Our careful examination of the evidence proffered by Caranas in this respect discloses that in the negotiations leading up to the execution of the lease it was understood and agreed that the additional rent should be 10 per cent of the excess of $250,000 in gross sales, and that this would be in addition to the base rental of $1,650 per month. But that is repugnant to what is said in the second sentence of sub-paragraph (B) and would therefore be inadmissible under the parol evidence rule. (We do not wish to be understood as holding that no parol evidence would have been admissible; only that the testimony shown by the bill of exceptions to have been excluded was inadmissible.)

Moreover, as will appear from our discussion of appellant’s third point of error, immediately following, any error there may have been in excluding the testimony was harmless. Rule 434, Vernon’s Texas Rules of Civil Procedure. The second point of error is overruled.

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460 S.W.2d 225, 1970 Tex. App. LEXIS 2022, Counsel Stack Legal Research, https://law.counselstack.com/opinion/caranas-v-morgan-hosts-harry-hines-boulevard-inc-texapp-1970.