Cavanagh v. Iowa Beer Co.

• Citation: 113 N.W. 856,136 Iowa 236
• Parties: JOHN A. CAVANAGH ET AL., Appellees, v. IOWA BEER CO., Appellant
• Decision Date: 18 November 1907
• Court: United States State Supreme Court of Iowa

113 N.W. 856

136 Iowa 236

JOHN A. CAVANAGH ET AL., Appellees, v. IOWA BEER CO., Appellant

Supreme Court of Iowa, Des Moines

November 18, 1907

Appeal from Polk District Court.--HON.W. H. MCHENRY, Judge.

ACTION at law to recover damages for breach of a contract of lease. Defendant admitted the making of the lease, but pleaded that it never became operative by reason of breach of a condition precedent. A jury was waived, but before any testimony was introduced plaintiff moved for judgment upon the pleadings. This motion was sustained, and defendant appeals.

Reversed.

N. T Guernsey and Hubbard & Burgess, for appellant.

St John & Stevenson, for appellees.

OPINION

DEEMER, J.

In January of the year 1905 the parties to this action entered into a written contract of lease for part of a certain lot in the city of Des Moines. This lease was for a term of five years from and after the 1st day of April, 1905, and provided for an annual rental of $ 1,000 to be paid in advance monthly installments, beginning April 1, 1905. Plaintiff alleged "that after the making of said lease, and before the 1st of April, 1905, they erected the brick building specified in the said lease on said premises, and expended therefor $ 1,200 or more, and fully complied with the terms and condition of said lease on their part, and about the 1st day of April, 1905, plaintiffs delivered to the said defendant the full possession and control of said premises, and the defendant was in possession of said premises thereafter from the 1st day of April, 1905, to about the 1st day of June 1905, at about which latter day the said defendant abandoned said premises, and refused to perform any of the conditions of said lease on its part, and hitherto have wholly failed to pay any rents, and have refused to have anything to do with said premises, and about the 5th day of June, 1905, said plaintiffs took possession and control of said premises with notice to said defendant and under a stipulation that the act of so taking possession should not in any manner prejudice the rights or liabilities of either of the parties under said lease."

The lease contained these, among other, provisions: The defendant agreed "not to permit any unlawful business to be conducted on said premises and to pay promptly during the continuance of this lease all amounts whatsoever that may be legally required of it in connection with the running or operation of a saloon on said premises, as well as the operation and running of any other business of whatsoever kind which may be conducted and carried on upon said premises." And the plaintiff agreed to erect a one-story brick building sixteen by fifty feet upon the lot to be completed on or before April 1, 1905, suitable and ready for the conducting of a saloon, and, upon request, remove another brick building and substitute a frame one in its place. Defendant admitted the execution of the lease, but averred that the sole inducement and consideration therefor was an oral agreement on plaintiff's part that they (plaintiffs) would procure or cause to be procured from the city council of the city of Des Moines the consent of the said city council to the operation by defendant of a saloon upon the leased premises and that the lease was not to become obligatory until plaintiffs procured this consent. It also pleaded that plaintiff failed and neglected to procure this consent, and that, by reason thereof, the consideration for said lease failed, and that it never became operative. We now extract from the answer these further paragraphs:

This defendant avers that when it became evident that such consent could not be procured from said city council, and that said plaintiffs could not comply with their oral agreement as herein before set out, this defendant orally notified said plaintiffs that it would not enter into the possession of said leased premises, and that it disclaimed any and all liability under said lease, and would refuse to be bound thereby, because of the failure of said plaintiffs to perform the condition and tender the consideration to which its execution and delivery was made subject, and that, in pursuance of such notice, said defendant never entered into the possession of or assumed the control over said leased premises. . . . This defendant avers that the failure of said plaintiffs to perform their oral agreement and to fulfill the condition precedent to the complete delivery of said lease, and to the consummation of the contract therein contained, was not due in any respect to the default, omission, or neglect of this defendant. . . . This defendant avers that by reason of the failure of said plaintiffs to carry out and perform the collateral oral agreement so made by them, which agreement furnished the sole inducement to and consideration for the signing of said lease by this defendant, and which was a condition precedent to the complete delivery of said lease, and the complete consummation and execution of the contract therein contained, said lease never became a valid instrument or binding upon either of the parties thereto. . . . This defendant avers that it was mutually understood and agreed by and between the parties to said lease, at and prior to its signing, that the same should not become binding upon the parties thereto, nor upon this defendant, nor be enforced by either of said parties by suit at law or in equity, unless and until the condition precedent set out should have been fully and duly performed by said plaintiffs.

Plaintiff's motion for...