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Kimmel v. W. T. Grant Co.

Decided: February 5, 1964.

KIMMEL, TRUSTEE, ETC.
v.
W. T. GRANT COMPANY



Appeal from the Circuit Court for Montgomery County; Shure, J.

Brune, C. J., and Henderson, Hammond, Marbury and Sybert, JJ. Hammond, J., delivered the opinion of the Court.

Hammond

In this case a landlord, the appellant, and a tenant, the appellee, interpreted differently a written lease of a store; the landlord thought the lease contemplated the payment of additional rent if the tenant began to use any part of the basement of the building, the first floor of which it had occupied for several years, and the tenant read the instrument as providing it had the right to use the basement without paying additional rent provided it made any necessary improvements or readiments at its own expense.

The tenant began to use space in the basement and refused to pay additional rent, and the landlord sought a declaration at law that such rent was payable. Incorporated by reference in the pleading of the plaintiff were the lease and copies of letters

of the tenant indicating an original willingness to pay additional rent for use of space in the basement if the landlord did certain work and a subsequent change of heart. It was alleged that without further notice the tenant had installed the partitions in the basement (and, it would appear, a stairway from the first floor) at its expense and was using twenty-five hundred square feet thereof as a stockroom. Judge Shure sustained the tenant's demurrer without leave to amend, finding the lease unambiguous and plain in its meaning that the tenant had the right to occupy space in the basement without paying additional rent provided the landlord was not called on to pay for improving or making ready the space occupied.

The well-pleaded allegations of fact in the declaration of the landlord, admitted by the demurrer to be taken as true, show that in 1956 Kimmel, trustee, as landlord, and W. T. Grant Company, as tenant, executed a fifteen-year lease of land and a building to be erected by the landlord in a shopping center in Montgomery County. It was contemplated that the tenant would originally occupy and use only the ground floor of the one-story and basement building and that the basement would not be finished until such later time as the needs of the tenant required its use. Because it was economical to do so the landlord, at considerable expense, caused the basement to be partially finished while the original construction was in progress, by the installation of a concrete floor, a plastered ceiling and electrical wiring. The floor area of the first floor and of the basement was to be twenty-one thousand square feet each and the fixed rental to be paid from the time the first floor was opened as a store or sixty days after the tenant was given exclusive possession of the first floor was to be $18,000 a year (or 85.7 cents per annum a square foot). The lease provided that if the landlord, at the tenant's request, thereafter made the basement ready for occupancy, the additional rent would be at the rate of 85 cents a square foot per annum for space which the tenant occupied. The lease also called for a percentage rent of 3% of sales over $600,000, with an adjustment in the minimum sale bases if additional fixed rent became payable.

The tenant relies, as did the trial court, largely on a provision of the lease that "the Tenant at its own expense may from

time to time during the term of the lease make any alterations, additions and improvements in, on and to the demised premises which it may deem necessary or desirable * * *." The landlord says that this standard printed provision at the very least makes the lease ambiguous and that it must yield to the special and explicit subsequent typewritten provisions that the tenant may "require the Landlord to do such work as is necessary to finish the basement in Tenant's store so that the same may be used by the Tenant as a stock, sales and/or office area" and that if this is done "then, effective sixty (60) days after the Landlord has delivered possession of the additional space to the Tenant * * * the annual fixed rent * * * namely EIGHTEEN THOUSAND DOLLARS ($18,000), shall be increased by the amount which is the product of the number of net square feet of additional space provided by the Landlord * * *."

The answers to the questions posed would seem to come clear if it can be determined what were the demised premises which the tenant could alter, add to, or improve at its own expense. To get these answers the lease must be read as a whole giving due consideration and weight to all its provisions relevant to the inquiry. If we can, we must ascertain what meaning would be attached to the integration as a whole by a reasonably intelligent person acquainted with both the operative usages and the circumstances prior to and contemporaneous with the making of the integration other than the oral statements of the parties of what they intended it to mean. Weber v. Crown, etc. Corp., 214 Md. 115.

The integration was in two parts: a lease which, "upon and subject to covenants and agreements set forth in a certain agreement between the Landlord and the Tenant * * * (hereinafter called 'Lease Agreement')" conveyed two parcels in the Rockville Center Shopping Center, "(hereinafter called the 'demised premises') and more particularly described as * * * 'Parcel No. I -- all that certain parcel of land * * * together with a one (1) story and basement air-conditioned building to be erected by the landlord thereon in accordance with the provisions of said Lease Agreement. Parcel ...


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