National Garage Co. v. George H. McFadden & Bro., Inc.

542 S.W.2d 371, 1975 Tenn. App. LEXIS 181
CourtCourt of Appeals of Tennessee
DecidedMay 20, 1975
StatusPublished
Cited by11 cases

This text of 542 S.W.2d 371 (National Garage Co. v. George H. McFadden & Bro., Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Garage Co. v. George H. McFadden & Bro., Inc., 542 S.W.2d 371, 1975 Tenn. App. LEXIS 181 (Tenn. Ct. App. 1975).

Opinion

CARNEY, Presiding Judge.

The Plaintiff below, National Garage Company, a partnership composed of I. E. Hanover, Marvin Ratner and others, has appealed from a judgment of the Circuit Court of Shelby County dismissing Plaintiff’s suit for $31,000 representing rent for one year on the building located at 62 West Court Avenue in Memphis, Tennessee, known as the National Garage Building. Plaintiff claimed that a lease signed by the parties was automatically renewed for one additional year.

The Defendant, George H. McFadden & Bro., Inc., had been a major tenant in the building since the late 1930’s. The parties began negotiating in the fall of 1968 for a new lease on the premises. After a series of discussions which lasted several months, the parties entered into a new lease agreement on June 23, 1969. The lease agreement is some seven pages long and we copy only the pertinent portions herein as follows:

“LEASE
INDENTURE OF LEASE made as of June 23,1969, between THE NATIONAL GARAGE COMPANY, a partnership composed of JACK A. BELZ, JEROME H. HANOVER, I. E. HANOVER, and THE HEIRS OF I. J. RATNER, herein called ‘Landlord’ and GEO. H. McFAD-DEN & BRO., INC., herein called ‘Tenant’, wherein it is agreed:
2. The term of this lease shall be Two (2) Years, beginning August 1, 1969, and ending July 31, 1971.
3. Tenant hereby covenants and agrees to pay to Landlord as rent for the aforesaid premises the sum of SIXTY TWO THOUSAND DOLLARS ($62,000), payable in advance in monthly installments, in amounts, and maturing as follows:
TWO THOUSAND FIVE HUNDRED EIGHTY THREE AND 33/100 DOLLARS ($2,583.33) per month, on the first day of August, 1969, and a like amount on the first day of each successive month throughout the term of this lease.
* * * * * *
18. And on the expiration of the term of this lease to deliver unto Landlord the possession of said building, lot and premises, cleared of all persons, goods and things not properly belonging to the same, and in as good order and condition as the same were received, destruction or damage by fire, storm or other casualty, not the fault of the Tenant or its agents, and ordinary wear and tear excepted.
* * * * * *
24. No renewal of the lease will be binding on either party unless it be in writing and signed by Landlord and Tenant.
* * * * * *
30. It is mutually agreed and understood that in the event Tenant should hold over after the termination of this lease, either by expiration of the term herein stated or otherwise, that such holding over shall not be construed as a holding over from month to month, or year to year, or term of years, or for a periodic term of any kind, but such holding over shall be from day to day and solely at the will of Landlord.
35.- Upon the end of the term of this lease, and thereafter until once terminated, this lease will renew itself from year to year unless either party notifies the [373]*373other within twelve (12) months prior to expiration of a renewal period.”

The Defendant paid its rent regularly and otherwise complied with the terms and provisions of the lease contract.

By letter dated November 2, 1970, the Defendant tenant George H. McFadden & Bro., Inc. notified a partner of Plaintiff, I. E. Hanover, as follows:

“It is with regret that I have to inform you that we have decided not to renew our lease of June 23,1969 when it expires on July 81, 1971.”

On July 31, 1971, the last day of the two-year period, the Defendant surrendered possession of the premises. The landlord unsuccessfully tried to mitigate his damages by leasing the property to other tenants. On November 28,1972, suit was filed by the Plaintiff landlord against the Defendant tenant for $31,000 contending that paragraph 35 of the lease contract provided for a mandatory extension of the lease contract for a third year.

The case was tried before the Trial Judge without a jury. Mr. I. E. Hanover and Marvin L. Ratner, an attorney of the Memphis Bar, both partners in the National Garage, owners of the building in controversy, testified as witnesses for the Plaintiff. Mr. Erich A. Catmur, Executive Vice President of Valmac Industries, the successor Corporation to George C. McFadden & Bro., Inc., testified for the Defendant. These same witnesses were the parties who had negotiated over a period of several months prior to June 24, 1969, which negotiations resulted in the lease in controversy.

No objection was made to the testimony by the parties of their intentions in drafting various portions of the contract. Mr. Marvin Ratner was a principal draftsman of the document. However, Defendant’s Vice President, Mr. Catmur, and attorney, Mr. Allen, carefully considered every section of the contract before it was executed. Several changes were made before it was finalized.

Mr. Ratner testified that he drafted paragraph 35 partly in answer to a suggestion of Mr. Catmur in a letter of November 1, 1968, addressed to Mr. Hanover concerning an automatic renewal and we copy the suggestion which is a paragraph from the letter as follows:

“We also would like to see the lease drawn where it would be automatically extended for additional periods of one year subject to either party’s right to give each other 12 months prior notice of their intention not to continue.”

In that same letter Mr. Catmur offered to take a two-year lease and we quote from the letter as follows:

“Due to the obsolescence of the National Garage Building compared to modern structures and the attendant lack of comfort and efficiency, we do not feel that any increase in rental is justified; the best we can do, therefore, is to offer to take a two-year lease from August 1, 1969 to July 31, 1971 at a rental of $31,-000 per annum contingent upon the following work being performed: . . ”

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Bluebook (online)
542 S.W.2d 371, 1975 Tenn. App. LEXIS 181, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-garage-co-v-george-h-mcfadden-bro-inc-tennctapp-1975.