Callahan v. Broadway Nat. Bank of Chelsea

• Decision Date: 28 May 1934
• Citation: 286 Mass. 473,190 N.E. 792
• Parties: CALLAHAN v. BROADWAY NAT. BANK OF CHELSEA.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

286 Mass. 473

190 N.E. 792

CALLAHAN

v.BROADWAY NAT. BANK OF CHELSEA.

Supreme Judicial Court of Massachusetts, Suffolk.

May 28, 1934.

Appeal from Superior Court, Suffolk County; Weed, Judge.

Suit in equity in the superior court by Nellie M. Callahan against the Broadway National Bank of Chelsea. From a final decree entered by order of the judge, defendant appeals.

Affirmed.

C. A. Warren, of Boston, for appellant.

RUGG, Chief Justice.

This is a suit by the lessor and owner of real estate against a lessee of the first floor and basement of a building used by the defendant for its banking business. The case was heard by the trial judge upon oral and documentary evidence which is reported in full. The trial judge made a finding of material facts. The appeal of the defendant from a final decree brings the case here. The bill of complaint as originally filed sought reformation of a written lease for a term of years. No evidence was offered warranting the conclusion that the plaintiff was entitled to reformation of the lease. Points of controversy between the parties as developed at the hearing were whether the plaintiff or the defendant was required to pay (1) the taxes on the vaults and other fixtures, furnishings and equipment installed by the defendant on the leased premises, and (2) the cost of the water used by the defendant on the leased premises. The settlement of these controversies depended upon the correct interpretation of the lease. Since the decree was against the plaintiff as to the payment for water by the defendant to the plaintiff, that question drops out of the case.

The plaintiff leased to the defendant for a term of fifteen years from July 15, 1922, the lower portion of a business block in process of erection by the plaintiff. Thereafter, as the building progressed and in accordance with the lease, the defendant at its expense installed a vault in the basement and also grill work and other fixtures and furnishings to adapt the demised premises for use as its banking rooms. The lessee covenanted at the expiration of the term to yield up to the lessor ‘all and singular the premises and all erections, alterations, and additions made to or upon the same, * * * but it is expressly understood and agreed that said lessee may at any time during said term, or upon the termination thereof, remove any vault or vaults * * * and all other fixtures, furnishings and equipment installed by it.’ The vault is so constructed as to be independent of the basement walls and as not to form a part of the structure of the building. It cannot be removed from the building without destroying the vault or some part of the structure of the building. The plaintiff reserved that part of the basement in which were located the heating and water systems. The lease described the demised premises with particularity. After providing that the lessor should install and maintain the heating and water systems, it reads in part: ‘It is further understood and agreed that should said lessor at any time fail or neglect to pay any tax or assessment on said property, * * * said lessee may, at its option, do what said lessor may then be obligated to do * * * and may deduct the sums expended in connection therewith from the rent falling due to said lessor hereunder, whether then or thereafter payable.’ During the first three years of the term, the vault was assessed to the defendant and it paid the taxes. Beginning with 1926, no separate valuation of the vault has been made and the plaintiff has paid the taxes on the land and building. In 1930 and 1931 the vaults were assessed separately as real estate to the plaintiff who paid the taxes.

The trial judge rightly interpreted the lease as a whole in the light of all the circumstances to mean that the words ‘any tax or assessment on said property’ referred solely to the land and buildings and did not include the vault and other fixtures and furnishings installed by the lessee. The lease seems to have been framed with care to indicate that as between lessor and lessee title to the fixtures installed in the building by the lessee should remain its property during the term of the lease. Ryder v. Faxon, 171 Mass. 206, 50 N. E. 631,68 Am. St. Rep. 417;Stone v. Livingston, 222 Mass. 192, 195, 110 N. E. 297;Lawyers' Mortgage Investment Corp. v. Paramount Laundries, Inc., 279 Mass. 314, 318, 181 N. E. 262. It is hardly open to the defendant to take any different position because it requested the judge to rule that on the evidence it could not be found ‘that the vault ever became a part of the plaintiff's real estate’ and that request was granted. Every implication, in the absence of express agreement, is against the idea that as between themselves a lessor should be required to pay taxes on property of the lessee. This is true even though for purposes of taxation the vault may be assessed to the lessor with her land and building because ‘erected thereon or affixed thereto.’ G. L. (Ter. Ed.) c. 59, § 3.

The tax for each year now in question was assessed to the plaintiff as a real estate tax. It created a lien, so far as concerned the taxing authorities, upon the whole property including land, buildings and other things erected thereon or affixed thereto. G. L. (Ter. Ed.) c. 59, § 3; c. 60, § 37. The plaintiff could not release her own property from the lien without paying the whole tax and thus discharging the liability. There was no direct liability on the part of the defendant to pay to the collector of taxes the tax on the vault, yet it was liable for the payment of the tax because affixed to the building and land, and payment of the tax by the plaintiff discharged that liability and so benefited the defendant. The plaintiff might have maintained an action of contract against the defendant to recover such taxes. Phinney v. Foster, 189 Mass. 182, 75 N. E. 103. Therefore the defendant strongly contends that this suit cannot be maintained because the plaintiff had a perfect remedy at law. This contention is important in view of the procedure at the trial. At the conclusion of the evidence and after arguments, the plaintiff moved to amend her bill by striking out the portions relating to reformation of the lease (it having become plain that the proof did not support that allegation) and by adding a new paragraph seeking an interpretation of the provisions of the lease on the points in controversy as developed at the trial, under G. L. (Ter. Ed.) c. 213, § 3, Tenth A, relating to declaratory judgments, Whiteside & Aldridge v. Merchants' National Bank, 284 Mass. 165, 187 N. E. 706. The defendant opposed this motion on the ground (1) that such an amendment would change the cause of action from that for which it was intended to be brought and (2) that as to the matter pleaded the plaintiff had a plain, adequate and complete remedy at law. It also pleaded the latter ground in defence. This motion was allowed.

The allowance of this amendment was in substance a finding by the trial judge that it enabled the plaintiff to prosecute the cause of action for the enforcement of which the suit was instituted. Regarded simply as an amendment of pleadings, this presents no substantial question of law. It was within the jurisdiction conferred by statute as to amendments. Its allowance falls within...