Goldstine v. Tolman

• Decision Date: 01 May 1914
• Docket Number: No. 53.,53.
• Citation: 157 Wis. 141,147 N.W. 7
• Parties: GOLDSTINE ET AL. v. TOLMAN ET AL.
• Court: Wisconsin Supreme Court

157 Wis. 141

147 N.W. 7

GOLDSTINE ET AL.

v.TOLMAN ET AL.

No. 53.

Supreme Court of Wisconsin.

May 1, 1914.

Appeal from Circuit Court, Milwaukee County; Oscar M. Fritz, Judge.

Action by Max Goldstine and others against S. A. Tolman and another. From a decree in favor of plaintiffs, defendants appeal. Reversed and remanded, with directions.

This action was brought to enforce specific performance of an alleged agreement to enter into a 99-year lease, and resulted in a judgment for the plaintiffs. On October 16, 1909, the plaintiffs and the defendant S. A. Tolman entered into the following agreement: “This preliminary agreement certifies that S. A. Tolman, party of the first part, and James A. Silver, Max Goldstine, and Gustave E. Kahn, parties of the second part; that party of the first part agrees to lease the property south of the alley facing on Third and Sycamore streets in Milwaukee, Wis., owned by first party, to parties of the second part for ninety-nine years on the usual terms as applied to a ninety-nine year lease, leasing the property for the first fifteen years at $22,500 per year, balance of eighty-four years at $23,500 per year, payable monthly in advance, first party agreeing to rebate the first year during building $5,000 from the rental parties of the second part are to pay as here specified. Parties of the second part agree to put up a fireproof building which shall be put up with foundations sufficient to carry ten or more story building, and walls to carry that height also, and party of the second part shall give good and sufficient security that they will put up a building to cost not less than $200,000, and any more money required to complete the building they are to furnish. Party of the first part agrees to loan party of the second part $100,000 for five years at five per cent. per annum. After five years second parties to have option to have loan continued and pay $10,000 on the principal annually until it is paid. Interest on money loaned by said first party payable monthly in advance. Parties of the second part are to have plans and specifications drawn and submit same to the party of the first part for his approval, and no building shall be put up without his approval, and he puts in this $100,000 after party of the second part have put in theirs, and he as fast as architect's certificates and mechanic's liens are furnished. Parties of the second part shall have the right to purchase the property any time within ten years at $550,000. Parties of the second part shall insure the property at least eighty per cent. of the value of the buildings, and in case of fire the same shall be paid to the first party as his interest may appear, and this insurance on the property shall continue to his benefit during the life of the lease, and at the end of the lease term buildings shall go free to the party owning the fee simple. Party of the second part hereby pays $250 for the payment of attorney's fees, providing this lease is not merged into an actual agreement and new lease. If it is, they are to have credit for $250. Date of this lease to take effect on the 1st of January, 1910; parties of the second part having all signed this agreement, and are to continue to be responsible to party of the first part for the lease up to the time of full payment of money advanced for the building. Parties of the second part have the right to form a holding company with sufficient responsibility to carry on and make them responsible for the rental of the property and carry out this preliminary agreement; parties of the second part personally signing the notes and lease, and being personally responsible to the end of the time when the payment is fully made for money loaned by party of the first part. Lease must be completed and signed not later than November 5, 1909.”

On October 20, 1909, the following supplementary agreement was made: “This agreement, made between S. A. Tolman, of the city of Chicago, Cook county, Illinois, party of the first part, and James A. Silver, Max Goldstine, and Gustave E. Kahn, parties of the second part, and as supplemental to the preliminary agreement entered into by said parties on the 16th day of October, 1909, and as though fully incorporated therein. The said S. A. Tolman agrees to and with the parties of the second part that the said long term lease shall contain a provision that, in case of default of the lessees under said lease, lessees shall be entitled to thirty days' notice. And the said parties of the second part agree to furnish a good and sufficient bond acceptable to party of the first part, equivalent to the moneys actually required and to be put in said building in the erection thereof by the parties of the second part. And the said first party further agrees to pay the taxes and all assessments for the year 1909. And it is mutually agreed between the parties hereto that the building on the said premises to be erected shall be of the construction known as reinforced concrete, and acceptable to party of the first part. And the parties of the second part agree to pay all taxes, insurance premiums, and charges of every nature which may accrue after January 1, 1910; it being agreed and understood by and between the parties hereto that the rentals provided shall be net to said party of the first part, without discount or deduction, excepting, however, the $5,000 which shall be rebated the first year during the erection of the building. Said party of the first part agrees that, in addition to the property described in the agreement of October 16th, he agrees to lease to the parties of the second part whatever rights he may have in the alley north of the said premises belonging to and attaching to the said premises south of the alley. Said parties of the second part agree, on January 1, 1910, to accept the leases now on and affecting the said premises.”

In pursuance of these agreements the defendant S. A. Tolman tendered a form of lease to the plaintiffs under date of October 28, 1909. The lease tendered was not satisfactory, and on November 5th the plaintiffs prepared and tendered to Tolman a lease which they claimed conformed to the agreement of the parties. This lease was accompanied by a form of bond. This form of lease was not satisfactory to Tolman, and he refused to execute it. Thereafter considerable negotiations were carried on, personally and by correspondence, in an endeavor to agree upon the terms of the lease. On or about February 28, 1910, Tolman prepared and submitted a second lease, which modified to some extent the terms of the one first presented, and offered to execute the same. This lease was not satisfactory to the plaintiffs, and they in turn prepared and on April 16, 1910, presented to Tolman a second lease, modifying to some extent the terms contained in the lease which they first presented, and demanded of Tolman that he execute the same. This he refused to do, and the negotiations between the parties practically ceased at this time. The premises covered by these agreements were occupied by seven different tenants when the agreements were made. The leases held by six of them expired on May 1, 1910, and, after the negotiations had practically come to an end, and on April 15, 1910, Tolman proceeded to renew the leases of his tenants. Part of the property covered by the proposed leases consisted of the Davidson Theater and the Hotel Davidson. It was necessary to make repairs on these buildings, and the sum of $26,840 was expended in making such repairs. Some attempt was made by the plaintiffs to renew negotiations during the summer of 1911; but nothing came of it. On October 10, 1911, the defendant Tolman leased the same premises to his codefendant, Stone, for a period of 99 years. In addition to the facts recited, the circuit court found: (1) That the expression “on the usual terms as applied to a ninety-nine year lease,” which appeared in the contract of October 16th, was used and intended by the parties to mean those terms which were usually applied to a lease for 99 years in the city of Chicago at that time; (2) that Tolman directed his attorneys to draw a lease which, in addition to the matters expressly provided for in the two preliminary agreements, should contain the usual terms applied to a lease for 99 years in the city of Chicago; (3) that in the lease so prepared, bearing date October 29th, there are the usual terms as applied to a 99-year lease in said city, but that certain provisions which related to matters expressly agreed upon in the preliminary agreements were not in accordance with the terms of these agreements; (4) that prior to November 5, 1909, plaintiffs did not propose any sufficient sureties or acceptable bond to said S. A. Tolman under said preliminary agreements, and that no contract or arrangement had been made with any sureties by the plaintiffs for the signature of the bond form tendered by the plaintiffs on November 5, 1909; (5) that during the months of August and September, 1911, the defendant Stone negotiated with the agent of the defendant Tolman for a lease of the property; that on or about September 7th the form of the lease was agreed upon, and on October 11, 1911, the same was reduced to writing, executed, and delivered; (6) that, at the time the defendants began their negotiations and thereafter, they believed that whatever rights the plaintiffs had under the preliminary agreements had terminated; (7) that the failure of Tolman to execute and deliver to the plaintiffs a lease of the premises in question was not caused by or due to any act of the defendant Stone; (8) that the said lease which was entered into between the defendants was made and entered into in good faith, and without intent or design to injure, cheat, or defraud the plaintiffs; that there was no conspiracy or agreement between the defendants to cheat or defraud the plaintiffs, or any or either of them; (9) that the...