Pensacola Gas Company, Appellant, vs. A. Lotze's Sons & Co., et al., Appellees, 23 Fla. 368

Mr. Justice Raney delivered the opinion of the court: The appellant was plaintiff and the appellees were defendants in the Circuit Court. These defendants are I). K. Hickey, who is the party of the first part, and the John Shiletto Company, a body corporate, Henry Oskamp and A. Lotze’s Sons & Co., who are the several parties of the third part to the contract set out in the statement of the case.

The declaration alleges that the defendants became liable by such contract to pay debts contracted for the purpose of conducting the hotel for the uses-mentioned and purposes sec forth in the contract, and that thereafter the plaintiff supplied gas of the value of $699.17 for the hotel, and that such gas was used therein while it was being conducted under the terms of the contract. The defendants demurred to the declaration and the demurrer having been sustained and the plaintiff not desiring to amend his declaration, judgment was rendered in favor of the defendants- and the plaintiff appealed.

The question before us is whether or not the defendants became liable by virtue simply of this contract to pay debts contracted in conducting the hotel. It is apparent from the terms of the contract that Hickey,, the party of the first part, was the lessee of the Hew Continental Hotel at Pensacola, and that he was indebted to the parties of the third

part in the sum of about $15,000, and that such indebtedness was, at the date of the contract, past due, and this indebtedness was secured by a mortgage on the bulk of the furniture and outfit of the hotel. The concession made by the parties of the third

part is a forbearance in the enforcement of their claim for the period of three years, upon the condition that one-third of it should be paid annually during such period.

The concession made by the hotel company, the parties of the second part, is a release of fifty per cent, of their rental until the parties of the third part shall be paid, but not for a longer period, however, than said three years, and a forbearance as to the remaining fifty per cent, of the rental payable by Hickey, this forbearance to last during the period of the forbearance of. the parties of the third part, and also of their landlord’s lien (if there be any) on any property in the hotel during said period of the forbearance of the parties of the third part.

The benefit or consideration enuring under the contract to the parties of the third

part is, in the first place, a lien upon certain personal property of Hickey’s, used in and about the hotel, and not covered by their aforesaid mortgage, as an additional security of their claim against Hickey. The other benefit or consideration of the parties of the third

part is that the net earnings of the hotel during the said period of forbearance shall be applied to the payment of Hickey’s indebtedness to them.

Hickey not only conveys to Chipley, the party of the fourth part, all the personal property in and. used in connection with the operation of the hotel, but he agrees, as does the hotel company, his lessor, that Chipley shall take “ entire and exclusive charge and management”, of the hotel, “subject only to the right” of Hickey “as an innkeeper to irianage said hotel tor the accommodation of transient guests and boarders for the use and benefit entirely of said parties of the third part.” It is provided by the contract as “ expressly understood and agreed by all the parties thereto” that Chipley shall at least once per month, and o'ftener if required, render to each of said parties of the second and third part a concise statement of the business of said hot.el, and shall be clerk and book-keeper of the hotel and have exclusive charge of all accounts pertaining to the business of said hotel, and shall open and keep a personal expense account with Hickey; and shall remit to the parties of the third part, as the foregoing monthly statements are rendered, all moneys remaining in his hands over and above the current expenses of the hotel.

Chipley is to have a salary as book-keeper, but no compensation as trustee. Upon payment by Chipley as provided in the contract to the parties of the third part of all the moneys due them, he is to reconvey to Hickey, but in the event that they shall not be paid in full as provided by the contract, Chipley is upon demand and option of‘the parties of the third part to convey to them, unless the hotel company, shall, after one month’s notice, assume the said indebtedness, in which event the property shall be conveyed to the hotel company.

In case of the death or resignation of the said trustee a successor is to be appointed by Hickey, with the approval of the hotel company and the parties of the third part. Any successor of the hotel company is to have all rights and privileges of such company under the contract.

Looking at this agreement as a whole we are unable to infer from its' terms alone, or from its terms considered with reference to the situation and purposes of the several parties, that there was any purpose to create by it any liability upon the parties of the third part, or, we may also say; upon the parties of the second or fourth parts, for the hotel operations. And in so far, moreover, as Hickey is concerned,it was not the purpose of the agreement to create of itself any liability^ on his part to any third persons who might supply him as innkeeper.

The purpose of the parties is apparent: it was to give Hickey, the lessee, an opportunity to continue to. operate the hotel and to pay off his indebtedness by such operations ; and it must be • assumed that all the parties hoped that he would be able to pay it in at least three years. Should he do so the Hotel Company would, upon such payment, find itself with a lessee owning the furniture and outfit of the hotel discharged of any lien, and with no obstacle in the way of their realizing the rental, and besides all this their hotel would have established both a profitable business and good reputation.

To secure these ends the company was naturally willing to make concessions. As one condition to the concessions made by the parties of the third part and the Hotel Company, it was required by such parties and the company that Chipley should have the powers given him. His powers were to be subject to Hickey’s right as innkeeper to manage the hotel for the ac commodation of transient guests and boarders.

The real purpose of vesting Chipley with these powers was to secure, through him, an insight into the operations of the hotel, a correct application of its earnings, so far as necessary to the legitimate accounts or expenses of the hotel, and a monthly application of its earnings to the indebtedness. Chipley’s powers were a restraint upon those of Hickey as lessee and innkeeper, but were never intended to create and do not create any liability upon the part of the parties of the third part for any expense of operating the hotel. They were intended as a benefit to such parties.

It is true the contract in stating Ghipley’s powers says that he shall take entire and exclusive charge and management of the hotel “subject only to the right of’’Hickey “as an innkeeper to manage said'hotel for the accommodation of transient guests and boarders for the use and benefit entirely of said parties of the third part ” who are the defendants other than Hickey.

The meaning and force of the expression of managing the hotel “ for use and benefit entirely of the parties of the third part ” is shown by the subsequent clauses of the agreement, which provide that the net earnings of the hotel shall be applied, in so far as they may be necessary, to satisfy the claims of such parties. Looking at all parts of the agreement, and the evident purpose of all the parties to it, no other meaning can be given it.

These net earnings, should there be any, are all the benefit parties of the third part were to receive irom the operations of the hotel, and the considerations they were to give for such benefits are plainly stated, and it would do violence both to the spirit and language of the agreement to hold that in addition to the expressed concessions and considerations for the same they had assumed a liability for the hotel operations and become jointly liable with, or a partner, if not the principal of Hickey, as to such operations.

The first point in construing a contract is to ascertain what was the meaning and understanding of the parties, as shown by the language used, applied to the subject matter. 2 Parsons on Contracts, 495. Ho-violence is done to either any rule of language or of law in the conclusion which we reach. Judgment affirmed.