B-121478, FEB. 10, 1956

B-121478, FEB. 10, 1956

TO CRUM-MCKINNON BUILDING COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 4, 1956, WITH ENCLOSURES, REQUESTING FURTHER CONSIDERATION OF YOUR CLAIM FOR UTILITIES AND JANITOR SERVICES FURNISHED THE BUILDING OCCUPIED UNDER LEASE NO. GS-10B-160 (FORMERLY I-3L-119), DATED OCTOBER 29, 1948, FOR THE RENEWAL TERM BEGINNING JULY 1, 1954.

YOU AGAIN URGE THAT YOUR LETTER OF OCTOBER 28, 1948, OFFERING TO LEASE THE BUILDING TO THE GOVERNMENT UNDER THE TERMS AND CONDITIONS THEREIN SET FORTH WAS NEVER INTENDED TO BE CONSIDERED AS A PART OF THE LEASE. SUPPORT OF SUCH CONTENTION YOU HAVE SUBMITTED A PHOTOSTATIC COPY OF LETTER OF AUGUST 25, 1955, TO YOUR COMPANY FROM THE FORMER CONTRACTING OFFICER, MR. ALBIN D. MOLOHON. IN THIS LETTER THE CONTRACTING OFFICER CONFIRMS YOUR CONTENTION. HE STATES THAT IT WAS AT HIS SUGGESTION THAT YOUR PREDECESSORS PREPARE A WRITTEN OFFER SETTING FORTH THE DETAILS UNDER WHICH THEY WOULD LEASE THE BUILDING AND THAT UPON RECEIPT OF THE LETTER OF OCTOBER 28, 1948, A LEASE WAS PREPARED AND SIGNED THE FOLLOWING DAY INCORPORATING "SUCH PARTS OF THE LEASE AS THE GOVERNMENT WISHED TO ACCEPT IN YOUR OFFER.' AS FURTHER EVIDENCE THAT THE ABOVE LETTER WAS NOT TO BE CONSIDERED AS A PART OF THE LEASE HE STATES THAT HAD SUCH BEEN HIS INTENTION PARAGRAPH 2 OF THE LEASE WOULD HAVE CONTAINED A REFERENCE TO THAT EFFECT.

THE ACTION HERETOFORE TAKEN ON YOUR CLAIM WAS NOT BASED ON ANY PREMISE THAT THE LETTER OF OCTOBER 28, 1948, FORMED A PART OF THE LEASE. THE LETTER WAS REFERRED TO MERELY FOR THE PURPOSE OF CLARIFYING AND SHOWING THE PURPOSE OF THE AMBIGUOUS RENEWAL PROVISION IN PARAGRAPH 7 OF THE LEASE. UNDER THAT PARAGRAPH YOUR PREDECESSORS GRANTED THE GOVERNMENT A RENEWAL OPTION "AT A RATE NOT EXCEEDING THE PRESENT RENTAL ($31,500 PER ANNUM) LESS 10 PERCENT DURING THE YEARS JULY 1, 1954 TO JUNE 30, 1959" WITHOUT ANY CHANGE OR MODIFICATION OF PARAGRAPH 6 OF THE LEASE, OBLIGATING THE LESSORS TO FURNISH CERTAIN SPECIAL SERVICES AS PART OF THE RENTAL CONSIDERATION. AS INDICATED IN OUR DECISION OF AUGUST 4, 1955, TO YOU, THERE IS AMPLE LEGAL AUTHORITY FOR THE INTRODUCTION OF PAROLE AND OTHER EXTRINSIC EVIDENCE FOR CLARIFYING AMBIGUOUS PROVISIONS. THE LETTER OF OCTOBER 28, 1948, TOGETHER WITH YOUR PREDECESSOR'S FORMAL PROPOSAL OF THE SAME DATE, WHEN READ IN THE LIGHT OF PARAGRAPHS 6 AND 7 OF THE LEASE, SHOW A CLEAR PURPOSE TO GRANT THE GOVERNMENT A RENEWAL OPTION EITHER ON AN ANNUAL BASIS FOR FIVE YEARS OR FOR A SINGLE TERM OF FIVE YEARS BEGINNING JULY 1, 1954, AT THE STIPULATED RENTAL FOR THE ORIGINAL TERM LESS 10 PERCENT, AND OTHERWISE UPON THE SAME TERMS AND CONDITIONS OF THE ORIGINAL LEASE. SUCH A CONSTRUCTION APPEARS REASONABLE AND IT IS CONSISTENT WITH THE INTENTIONS OF THE PARTIES AT THE TIME THE LEASE WAS EXECUTED AS EVIDENCED BY THE SPECIFICATIONS IN THE INVITATION ON WHICH YOUR PREDECESSORS SUBMITTED THEIR FORMAL PROPOSAL ON OCTOBER 28, 1948.

THE RENEWAL PROVISION AS PROVIDED IN PARAGRAPH 7 HAS ALL THE ESSENTIALS OF A GENERAL RENEWAL COVENANT. IT HAS BEEN HELD THAT RENEWAL COVENANTS OF SUCH TYPE ENTITLE THE LESSEE TO A RENEWAL ON THE SAME TERMS AND CONDITIONS AS THE ORIGINAL LEASE. 32 AM.JUR. LANDLORD AND TENANT SEC. 598. IF AT THE TIME THE LEASE WAS EXECUTED THE PARTIES INTENDED THAT PARAGRAPH 6 (OBLIGATING THE LESSORS TO FURNISH THE SPECIAL SERVICES AS PART OF THE RENTAL CONSIDERATION) HAVE BEEN SO PROVIDED IN PARAGRAPH 7. BY NOT SO PROVIDING, WE MAY ONLY CONCLUDE THAT THEIR PURPOSE--- IN THE EVENT OF A RENEWAL--- WAS TO REQUIRE THE LESSORS TO FURNISH THE SPECIAL SERVICES AS PART OF THE RENTAL CONSIDERATION AS REQUIRED BY PARAGRAPH 6. OTHERWISE, THE 10 PERCENT REDUCTION OF RENTAL, OR $3,150 PER ANNUM, OFFERED AS AN INDUCEMENT FOR THE GOVERNMENT'S CONTINUED OCCUPANCY WOULD BE MEANINGLESS AS EVIDENCED BY YOUR PRESENT CLAIM FOR SPECIAL SERVICES AT THE PER ANNUM RATE OF $9,150.

IN THE CIRCUMSTANCES, IT MUST BE CONCLUDED THAT THE CONTRACTING OFFICER'S LETTER OF AUGUST 25, 1955, FURNISHES NO LEGAL BASIS FOR MODIFYING THE PRIOR ACTION TAKEN ON YOUR CLAIM.