Josten Mfg. Co. v. Medical Arts Bldg. Co.

• Decision Date: 24 October 1934
• Docket Number: No. 9908.,9908.
• Citation: 73 F.2d 259
• Parties: JOSTEN MFG. CO. v. MEDICAL ARTS BLDG. CO.
• Court: U.S. Court of Appeals — Eighth Circuit

73 F.2d 259 (1934)

JOSTEN MFG. CO. v. MEDICAL ARTS BLDG. CO.

No. 9908.

Circuit Court of Appeals, Eighth Circuit.

October 24, 1934.

Joseph N. Moonan, of Waseca, Minn. (A. L. Sperry, of Owatonna, Minn., and Ray G. Moonan, of Waseca, Minn., on the brief), for appellant.

William E. MacGregor, of Minneapolis, Minn. (Arnold L. Guesmer and Harry S. Carson, both of Minneapolis, Minn., on the brief), for appellee.

Before SANBORN and BOOTH, Circuit Judges, and MUNGER, District Judge.

MUNGER, District Judge.

In this action at law by a landlord against a tenant for rent due according to the terms of a written lease, a verdict was directed for the plaintiff, and the defendant has appealed from the judgment on the verdict. The property leased was described as room 207 on the second floor of the Medical Arts building in Minneapolis, Minn. At the time of the lease, this room was entered from a hallway which ran north and south and led to a bank of passenger elevators. The term of the lease began at the date between March 1 and May 1, 1929, when the tenant should take possession, and continued to May 31, 1934. The tenant entered into possession on April 1, 1929, and continued in possession until May 31, 1930, when it vacated the premises. The action was for rent claimed to be due for the period beginning June 1, 1930, and ending April 30, 1932. In substance, the defendant's answer, so far as it is material, after admitting the execution of the lease and its occupancy under it, alleged that it had elected to rescind the lease and had so notified the plaintiff, because the defendant had been induced to execute the lease by a promise of the plaintiff, which it never intended to perform and never did perform. It alleged a promise by the defendant that it would construct a new hallway, running east and west, which would connect with the hallway running north and south, according to the floor plans appearing in a booklet furnished to the defendant. These plans showed a hallway which led from another hallway in a different part of the building, past another bank of elevators, and connected with the north and south hallway in front of room 207.

The answer admitted that when the defendant took possession on April 1, 1929, it had discovered that the hallway had not been constructed in accordance with the plans. There were allegations in the answer of subsequent negotiations between the parties, of a demand in April, 1930, that the defendant should perform its promise, of defendant's failure to comply, and that the rental value of the room in the absence of the new hallway was less than that fixed by the lease.

The reply denied the allegations relating to the alleged promise, set forth some provisions of the lease as an estoppel, and by an amendment made at the trial, alleged a further estoppel and a ratification of the lease because the defendant had remained in possession and had paid the rental after knowledge of the alleged fraud.

At the trial, testimony was received apparently without objection, tending to prove what was said in the preliminary negotiations for the lease. In brief, the testimony shows that the plaintiff's rental agent stated to the officer representing the defendant that the new hallway would be constructed as shown by the booklet, and would be completed by the date when the defendant was ready to move in. Thereafter the lease was signed by the parties, in December, 1928. When the defendant took possession on April 1, 1930, the hallway had not been constructed, nor begun. The defendant's officer in charge of the office was the officer to whom the promise had been made, according to the testimony, and he knew that the hallway had not been built, but the defendant nevertheless took possession, and made no complaint to any one. The defendant promptly paid the rent due on the 1st days of April, May, June, and July, 1929, without any protest, and without making any further inquiry. In July, 1929, the defendant learned that the firm of Lee Bros. had a lease covering the part of the building where the new hallway was shown on the plans, and that this lease did not expire until 1933. The defendant paid the rent due on August 1st and September 1st, and made no complaint to, nor inquiry of, the plaintiff. The first time the defendant mentioned to the plaintiff the subject of the absence of the hallway was in September, when the defendant's officer saw the rental agent of plaintiff who had conducted the negotiations for the lease, and was told that the plaintiff was trying to make some arrangements with Lee Bros. that would allow the hallway to be constructed. The defendant's officer concluded that the result of the negotiations with Lee Bros. was doubtful, but decided that the defendant would continue to occupy the room and would take a chance on the doubtful negotiations because he considered that it was cheaper to do so, than to move. The defendant continued to pay the rent monthly as long as it occupied the room. The defendant's officer complained to the plaintiff on a number of occasions during the period from November to February, because the promised hallway had not been built. The plaintiff insisted that negotiations were going on with Lee Bros., and that the hallway would be constructed. There were some negotiations in this period looking to occupancy of some other portion of the building by the defendant. In January, 1930, the defendant wrote to the plaintiff a letter saying that at that time it had on lease certain space on the...