Carney-Rutter Agency v. Central Office Bldgs.

• Decision Date: 03 March 1953
• Docket Number: CARNEY-RUTTER
• Citation: 57 N.W.2d 348,263 Wis. 244
• Parties: AGENCY, Inc. v. CENTRAL OFFICE BUILDINGS, Inc. et al.
• Court: Wisconsin Supreme Court

Page 348

57 N.W.2d 348

263 Wis. 244

CARNEY-RUTTER AGENCY, Inc. v.CENTRAL OFFICE BUILDINGS, Inc. et al.

Supreme Court of Wisconsin.

March 3, 1953.

This is an action by the plaintiffCarney-Rutter Agency, Inc., against the defendants, Central Office Buildings, Inc.(hereinafter referred to as 'Central') and Mitchell Building Corp., (hereinafter referred to as 'Mitchell'), to recover $6,500 damages for breach of a lease.The prayer of the complaint also contained a clause that in the event it should be determined that plaintiff was not entitled to judgment without reformation of the clause of the lease which gave the lessor the right to terminate in the event of sale of the leased premises, such clause be reformed to state the intention of the parties.The defendant Mitchell moved for summary judgment dismissing the action as to it, and the trial court, by order entered May 22, 1952, denied such motion.Mitchell has appealed from such order to this court.

For many years prior to September 29, 1948, Central was the owner of an office building known as the Mitchell Building, located on East Michigan street in the city of Milwaukee.On December 18, 1946, William C. Carney and Russell M. Rutter, doing business as a partnership, became a tenant in the Mitchell Building under a five- year written lease made on a printed form which had been adopted for use by Central in the winter of 1933-34 and which thereafter was continued in general use by Central in the making of at least two hundred leases for office space.Such printed form of lease contained the following clause:

'It is further agreed that in case the Lessor shall sell the property on which said premises are located, or lease the same for twenty-five (25) years or more, or desires to remodel or tear down and rebuild the building or buildings thereon, it may terminate this lease by giving the Lessee notice in writing thereof at least ninety (90) days before such termination of said lease.'

Thereafter, Carney and Rutter converted their partnership into a corporation, such corporation being the plaintiff in this action.During the months of November and December, 1947, plaintiff negotiated with Central for different office space in the same building, and on December 30, 1947, a new five-year lease for different space was executed between plaintiff and Central on the same printed lease form as the prior lease, containing the same termination clause in the event of sale.Thereafter plaintiff expended substantial sums for remodeling and redecorating the leased premises.

On September 18, 1948, Central received and accepted a written offer to purchase the Mitchell Building, made by Ralco Corporation on that same date and accompanied by a tender of $35,000 as earnest money.Ralco Corporation informed Central that title to the Mitchell Building was to be conveyed to 'Mitchell Building Corp.' as nominee for Ralco.On September 29, 1948, a written notice dated September 28, 1948, signed by both Central and Mitchell, was served upon the plaintiff, which called attention to the clause in plaintiff's lease permitting termination in event of sale, informed plaintiff that a sale of the Mitchell Building had been made 'with conveyance and assignment of said lease to run to Mitchell Building Corp.', and notified plaintiff that Central, as lessor, elected to terminate the lease as of December 31, 1948, and that plaintiff was required to deliver and surrender the leased premises to Mitchell as of the expiration of December 31, 1948.Accompanying above mentioned notice was a letter from Mitchell of the same date inviting plaintiff to negotiate a new lease.On September 29, 1948, after the service of such notice on the plaintiff, conveyance of the Mitchell Building was made by Central to Mitchell.Then a second written notice of termination, dated September 29, 1948 and signed by both Central and Mitchell, was served on plaintiffSeptember 30, 1948.

Within a week after September 29, 1948, Messrs. Carney and Rutter conferred with the managing agent of Mitchell, but negotiations for making a new lease proved unsuccessful, and Carney and Rutter began to look for quarters elsewhere.Under date of October 30, 1948, plaintiff wrote Mitchell as follows:

'We received notice from Central Office Buildings, Inc. dated September 28, 1948 cancelling our lease dated December 30, 1947 and running until December 31, 1952 on Rooms 312, 315, and 318, Mitchell Building, commonly known as 207 East Michigan Street.

'Your letter dated September 28 inviting us to negotiate with you a new lease and thereunder continue our tenancy has also been received.After careful consideration it has been determined by our officers not to negotiate a new lease but to vacate the premises prior to November 30, 1948 possibly during the week of November 29 but, of course, not later than November 30, 1948, provided that we are not prevented from moving because of strikes in the transportation industry.'

Further facts will be stated in the opinion.

George A. Gessner, Milwaukee (Charles D. Ashley, Milwaukee, of counsel), for appellant.

Gold & McCann and Richard A. McDermott, Milwaukee, for respondent.

FAIRCHILD, Justice.

With respect to this appeal, respondent urges that it was proper for the trial court to have denied Mitchell's application for a summary judgment because there are disputed questions of fact.In addition to the verified complaint and answer, the trial court had before it the adverse examinations of Messrs. Carney and Rutter, various affidavits, and considerable documentary evidence, such as deeds of conveyance, and letters passing between the parties.There are some disputed questions of fact, it is true, but these are entirely immaterial to the questions of law presented and therefore do not afford a basis for denying the application for summary judgment.In State ex rel. Salvesen v. Milwaukee, 249 Wis. 351, 24 N.W.2d 630, 632, this court stated:

'It is also argued that the case is not a proper one for a summary judgment.We have found no dispute in the facts save in the respect just set forth and we have pointed out that this difference is not significant.The material issues are legal rather than factual and the case falls squarely within the purpose of sec. 270.635[Stats.], the summary judgment statute.'

The quotation immediately above was recently cited with approval in Des Jardin v. Greenfield, 262 Wis. 43, 50, 53 N.W.2d 784.

As a first cause of action the complaint of respondent alleges the following two breaches of its lease of December 30, 1947, with Central: (1) Inasmuch as a warranty of title inheres in a conveyance of an interest in land such as the five-year lease in question, such warranty was breached by reason of the fact that there was outstanding at the time the lease was executed an unaccepted offer to purchase the Mitchell Building.(2) Inasmuch as the second notice to terminate, dated September 29, 1948, nullified the first notice to terminate, dated September 28, 1948, and inasmuch as the second notice was given after the conveyance, Mitchell had become the lessor and had no right to terminate until such time as it in turn should sell the building.

We find it unnecessary on this appeal to determine the issue of whether there is an implied warranty of good title on the part of a lessor to a lessee where the term is for more than three years.Respondent relies on 51 C.J.S., Landlord and Tenant, § 266 et seq., page 909 et seq.;Petre v. Slowinski, 251 Wis. 478, 483, 29 N.W.2d 505;andSchwartz v. Westbrook, 81 U.S.App.D.C. 64, 154 F.2d 854, 165 A.L.R. 1175, as authorities holding that there is such a warranty of title.

The facts with regard to the claimed unaccepted offer to purchase are as follows: On August 26, 1947, some four months before the execution of the lease of December 30, 1947, Charles Realty Company had submitted to Central an offer to purchase the Mitchell Building and another building.A $25,000 earnest money check accompanying the offer was to be held in trust account by a real estate broker through whom the offer was submitted.The president and principal stockholder of Charles Realty Company was Attorney Charles...