Harte v. Shukert

• Decision Date: 26 June 1913
• Docket Number: 17,282
• Citation: 142 N.W. 517,94 Neb. 210
• Parties: JOHN H. HARTE, APPELLEE, v. GUSTAVE E. SHUKERT, APPELLANT
• Court: Nebraska Supreme Court

142 N.W. 517

94 Neb. 210

JOHN H. HARTE, APPELLEE, v. GUSTAVE E. SHUKERT, APPELLANT

No. 17,282

Supreme Court of Nebraska

June 26, 1913

APPEAL from the district court for Douglas county: ALEXANDER C TROUP, JUDGE. Affirmed as modified.

AFFIRMED AS MODIFIED.

W. H Herdman and Martin Langdon, for appellant.

M. L Learned and Carl E. Herring, contra.

ROSE, J. BARNES, FAWCETT and HAMER, JJ., not sitting.

OPINION

ROSE, J.

This is an action to foreclose a mechanic's lien for $ 15,113.08 on a lot in Omaha. Under a contract for improvements, Harte, the plaintiff, earned $ 42,628.19 between November 6, 1907, and June 26, 1909. He received $ 27,515.11. The lien is for the remainder.

When Harte commenced work there was on the lot a two-story brick building occupied by the owner, Gustave E. Shukert, and his tenants. The contract for the improvements was made by Harte and Tolf Hanson, the latter having leased the premises from Shukert, May 20, 1907, for a term of ten years, beginning April 1, 1908, the agreed rental being $ 102,000, payable monthly in advance at the rate of $ 850 a month from April 1, 1908. Under the terms of the demise, failure to pay any part of the rent when due gave Shukert the right, at his option, to declare the lease at an end, and thereby cancel and annul it, to retake immediate possession of the premises, and to remove any person occupying the same. The lease also provided: "All the improvements to said premises made by said lessee shall revert to the owner at the expiration of this lease." With the consent of the owner and the other occupants, Harte began to make permanent improvements for Hanson as early as November 6, 1907, and continued until sums in excess of $ 70,000 had been expended by June 26, 1909, when Hanson became insolvent. He had not paid the rents for May, June and July of that year, but Harte and other creditors paid the May rent July 21, 1909. In the federal court Hanson was adjudged a bankrupt August 3, 1909, and died September 1, 1909. The receiver of the bankrupt estate and the trustee in bankruptcy held possession of the demised premises from July 31, 1909, until September 30, 1909, and paid the monthly rentals. Pursuant to a void order of the bankruptcy court, the trustee surrendered the leasehold estate to Shukert, September 30, 1909, and he has been in possession of the premises ever since. Shukert and his wife, his tenants, the trustee in bankruptcy and the administratrix of the estate of the deceased Hanson are defendants herein. The defense of Shukert is that the Harte lien attached only to the leasehold interest of Hanson; that Shukert exercised his option to terminate the lease for nonpayment of rentals due; that the lien expired with the lease; and that the improvements made by Hanson became the property of Shukert. The trial court found that there had been no effective forfeiture of the lease, and that the leasehold estate had been merged in the fee, and rendered a decree of foreclosure in favor of Harte for the full amount of his claim. Shukert has appealed.

The finding that the lease had not been forfeited or terminated for nonpayment of rentals is challenged as erroneous. On the first day of each of the months of May, June and July, 1909 Shukert made a demand for the amount due and unpaid. He asserts that he notified Hanson in writing July 31, 1909, to vacate the premises within three days, and that service was made by leaving the notice at Hanson's usual place of residence. It is argued that the demands and notice mentioned, in connection with the defaults of Hanson, amounted to an exercise of Shukert's option to declare the lease at an end and to retake possession of the premises. By undisputed facts Shukert, on principles of justice and equity, is estopped to assert against Harte the forfeiture of the lease. Harte made the improvements under the direction of Hanson. They were made on a scale so expensive as to indicate that they never would have been undertaken except in contemplation of their use by the lessee during the term...