Myers v. East Ohio Gas

In Myers v. East Ohio Gas (1977), 51 Ohio St.2d 121, 364 N.E.2d 1369, the Supreme Court considered whether a Supplemental Gas Storage Agreement for a primary term, followed by a grant of uncertain duration that conditioned termination upon the occurrence of an event within the lessee's control, gave rise to a tenancy at the will of either party after the primary term expired. Myers did not involve a right of perpetual renewal but, rather, addressed who possessed the authority to terminate the tenancy. The Supreme Court declined to adopt the legal rule, followed by a majority of American jurisdictions, that a lease terminable at the will of one party is terminable at the will of both because such a rule could frustrate the parties' intent. Whereas "courts, in deciding the rights of parties under a written agreement, including a lease, should give effect to the unambiguously expressed intent of the parties," the Supreme Court reasoned that the majority rule "may thwart the parties' intention by creating a lease terminable at the will of both parties even in those agreements which clearly and unambiguously provide for termination at the will of only one party." Id. at 125. Therefore, the court elected to treat the majority rule as a rebuttable presumption, holding that "those leases which do not clearly state whether they are terminable at the will of one or both parties will be presumed, in keeping with the majority rule, to be terminable at the will of both parties." Id. at 126-127. The court stated that its treatment of the majority rule as a rebuttable presumption was in keeping with the judicial practice of giving effect to contracting parties' intentions where possible and in keeping with the court's treatment of perpetual leases in Hallock v. Kintzler (1943). The term of the Supplemental Gas Storage Agreement in Myers was for "'a term of ten years, and so much longer as gas is being produced, stored, withdrawn or held in storage by the lessee.'" Id. at 127. When considering the contractual language, the Supreme Court stated: Since the contingency upon which termination is premised is a contingency over which the lessee has direct control, the lease clearly grants the lessee the right to terminate at will once the ten-year primary term has expired. Moreover, the agreement does not grant the lessor the right to withdraw from the lease, except after 30 days notice on default of the lessee. The agreement, then, is clearly terminable at the will of the lessee only. Therefore, the presumption that a lease at the will of one party is a lease at the will of both does not apply, a tenancy at will is not created, and the lease will be enforced according to its express terms. Id.