(dissenting).
I respectfully dissent. Since 1970, the provision in the 1962 contract that Brooks-bank is to receive cost-free reservations from Budget Rent-A-Car’s offices in New York City, Chicago and Los Angeles has been irrelevant to the manner in which the franchisees have handled reservations, and the contract clause cannot, in any meaningful sense, be implemented. In 1962 the parties never foresaw nor made allowance for a conversion to a centralized computer reservation system.
Can the 1962 contract clause nevertheless be enforced in some equivalent fashion? I do not see how this can be done by applying rules for construction of contract language. None of the rules apply, including the rule of practical construction. It may be that over the past 20 years some 30% of Brooks-bank’s reservations have continued to originate from the three designated cities, but this tells us nothing as to whether the parties intended those reservations to be cost-free. If we look to the “practical construction” the parties gave to the disputed contract clause, we find that the parties emphatically agreed to disagree.
There are strong, competing equities. Brooksbank points to his “sweat equity” and his contribution to making an initial risky enterprise stable and successful. Budget points out that in 1970 when it was essential to the survival of the business to convert to a central computer system, Brooksbank, unlike other major franchisees, refused to make concessions on the cost-free reservations clause in its contract.
It seems to me we are being asked not so much to construe a 1962 document as to arbitrate a dispute between business associates, both with substantial investments in an ongoing business of some 20 years and each needing the other. If the rules of contract construction can be applied, they should be; but where they are of no help, as here, and the parties refuse to bargain their differences, I believe a court may apply equitable principles. This is what the trial court apparently did here, granting a 10% reduction in reservation charges, but without giving its reasons. The majority of this court, applying rules of contract construction, believe a one-third reduction is proper. I agree a reduction is due Brooks-bank. I would reverse and remand to the trial court with instructions to determine what should be a proper reduction in the reservation charges, considering the equities of the entire relationship, and, of course, to set out the reasons for its determination.
TODD, SCOTT and KELLEY, JJ., join in dissent.