In re Marty v. Champlin Refining Co.

• Decision Date: 08 March 1949
• Docket Number: 47364.
• Parties: MARTY v. CHAMPLIN REFINING CO. et al.
• Court: Iowa Supreme Court

36 N.W.2d 360

240 Iowa 325

MARTY v. CHAMPLIN REFINING CO. et al.

No. 47364.

Supreme Court of Iowa

March 8, 1949

Breese & Cornwell, of Mason City, for appellant.

Smith & Beck, of Mason City, and Scarritt & Champlin, of Enid, Okl., for appellees.

WENNERSTRUM Justice.

Plaintiff the owner of real estate in Mason City, Iowa, sought recovery in a law action of claimed damages which he asserts resulted from the removal by the defendants of an automobile lift and air compressor, pumps, and signs placed upon the property of the plaintiff during the period one of the defendants was in possession of the leased property as a tenant. It is the claim of the plaintiff that the previously referred to items became a part of the realty while the defendants maintain they are trade fixtures which they had a right to remove prior to the expiration of the lease.

At the close of the plaintiff's evidence the trial court withdrew from the consideration of the jury the issue as to damages pertaining to the removal of the automobile lift and air compressor. The plaintiff on his part, withdrew any claim for damages for the removal of pumps and signs. The trial court also withdrew from the consideration of the jury any evidence of claimed declarations of defendants' agent made at the time of the negotiations for the lease and submitted only the question as to damages for necessary repairs to the filling station and also for the damages resulting from the removal of a wall. The jury returned a verdict for the plaintiff on the limited claim for damages as submitted. The plaintiff has appealed from the judgment and assigns error on the part of the trial court in withdrawing the previously referred to issues and evidence from the jury.

On May 2 1927, George S. Marty, the appellant entered into a written lease with the Champlin Refining Company, an Iowa Corporation for certain real estate in Mason City, Iowa for a term of ten years from July 1, 1927. Inasmuch as portions of the original lease and a renewal lease must receive consideration in our determination of this case we hereinafter set forth portions of the leases which are involved in this litigation. A part of the original lease is as follows:

'Second party shall have the right to construct and erect upon said premises any building or buildings as it may desire for the operation and maintenance of an oil station and shall have the right to place on said premises all equipment and apparatus used by it in the necessary operation and maintenance of its said business, including tanks, pumps, air compressors and any and all property of any kind or description necessary in the operation of said business, * * *.

'It is further agreed between the parties hereto that at the termination and expiration of this lease, if the rent due, including water rents, shall have been fully paid, the second party shall have the right to remove all equipment and apparatus used by it in the operation and maintenance of its said business, including tanks, pumps, air compressors and any and all property of every kind and description used in the operation of its said business except the underground piping and concrete drives to be purchased by second party.

* * *

* * *

'It is further stipulated and agreed that should the party of the first part extend this lease for a period of ten (10) years on the same terms, after the expiration of this lease, that all the buildings and improvements placed on the above-described property by the party of the second part shall, at the expiration of the extension of said lease, become the absolute property of the party of first part.' (Italics supplied)

On February 14, 1935, the original lease was extended for a period of ten years and the extension agreement is in part as follows:

'Whereas, the party of the second part is desirous of erecting a grease building on said property; and

'Whereas, party of the second part does not desire to erect said building on said property without an extension of its present lease; and

* * *

* * *

'It is hereby stipulated and agreed as follows:

'That the party of the first part for and in consideration of the rents to be paid and the covenants and agreements hereinafter mentioned to be performed by the said party of the second part, has extended, and does hereby extend the attached lease for the term of ten (10) years from and after the 1st day of July, 1937.

* * *

* * *

'It is also expressly understood and agreed, by and between the parties hereto, that nothing herein contained shall operate to discharge or release party of the second part, its legal representatives or assigns, from the liabilities to fulfill, keep and promptly perform, as well in spirit as in letter, each and all of the covenants contained in the original lease attached hereto and made a part hereof.' (Italics supplied)

It is the claim of the appellant that the lease and the extension agreement are indefinite and uncertain and that oral evidence of the real agreement should be received in explanation thereof. The appellees maintain, however, that the lease and extension agreement can and should be interpreted by the court and that no oral evidence is admissible to vary or change the terms of the written agreement. The appellant claims that the automobile lift and air compressor became a part of the realty in that they constituted 'improvements' and under the terms of the lease and extension, became the property of the appellant. The appellees contend that these items were trade fixtures and under the accepted interpretation of trade fixtures and by the terms of the lease they remained the property of the appellees with the right to remove them from the leased real estate prior to the expiration of the extension agreement. The trial court in passing upon the motion to withdraw certain items of claimed damages from the consideration of the jury said, in part:

'* * * it is provided in the original lease that at the termination and expiration of the lease, if the rent due including water rent shall be fully paid, the second party shall have the right to remove all equipment and appliances used in the operation and maintenance of said business including tanks, pumps and so forth, used in the operation of said business except the underground piping and concrete drives to be purchased by second party. Now the extension agreement which was drawn by the plaintiff himself provides that, * * * all of the said improvements now on said premises or to be placed thereon in accordance with this agreement or at any future time including the concrete drives, underground tanks and pipes shall at the expiration of this extension agreement become the property of the party of the first part absolutely and then it provides the same thing in case of forfeiture. But down here at the end of this lease it says it is expressly understood and agreed by and between the parties hereto that nothing herein contained shall operate as a discharge or release of the party of the second part, its legal representatives or assigns from liabilities to fulfill, complete and promptly perform as well in spirit as in letter each and all of the covenants contained in the original lease attached hereto and made a part hereof, so the original lease was still in effect and ran until the first day of July, 1947 and the provision as to the company removing this apparatus is still in full force and effect. There is no ambiguity about it. There might have been if the original lease hand't been kept in full force and effect * * *, but with that there is just nothing to it, so the court withdraws all evidence in regard to the removal of the automobile lift and the air compressor from the consideration of the jury, so the only thing left in this lawsuit is the question which has been admitted to the matter of the repairs and the damage by reason of the removal of the wall. That is still in. * * *'

In a letter written November 15, 1934, to the appellant by the company and apparently dictated by one A. H. Holland, a representative of the appellees, it was stated: 'The air lift referred to in the fourth article in your letter is an item of equipment that should not be included in the property to be turned over to you at the end of the lease but this is a minor consideration which can be adjusted when the other details on the program have been worked out.' This letter was written during the negotiations relative to the extension agreement. The article four referred to in the Holland letter pertains to a portion of a letter written by the appellant wherein certain suggested terms of a renewal lease are set out. The applicable portion of that letter is as follows:

'4. At the expiration of the present agreement and the extension agreement all of the permanent improvements which you have on the lot at the present time, and which you might erect on said lot during the period of this lease and extension agreement, including the underground tanks, air lift and driveways, shall become my property absolutely;'

The appellant testified that in a later conversation between Mr. Holland and himself they 'arrived at an agreement with reference to what the extension agreement should be.' Inasmuch as it is claimed that in this conversation it is indicated what was meant to be included in the extension agreement we shall set out a portion of appellant's testimony.

'Q. What was the conversation with reference to the lift and the other equipment and so forth that were to be placed on the premises?

'Mr Smith: The defendants object to this conversation as being clearly incompetent, immaterial, Mr. Holland is dead, he cannot testify, and all these conversations are merged in the contract; such conversations and...