Katz v. Miller

• Decision Date: 09 January 1912
• Citation: 148 Wis. 63,133 N.W. 1091
• Parties: KATZ v. MILLER ET AL.
• Court: Wisconsin Supreme Court

148 Wis. 63

133 N.W. 1091

KATZ

v.MILLER ET AL.

Supreme Court of Wisconsin.

Jan. 9, 1912.

Appeal from Circuit Court, Milwaukee County; J. C. Ludwig, Judge.

Action by Herman Katz against George P. Miller, trustee, and others. Judgment for plaintiff, and defendants appeal. Affirmed.

Edward H. Brodhead was the owner of certain real estate located at 89-91 Wisconsin street in the city of Milwaukee. He died in 1890, leaving a will under which these premises were left to Frank G. Bigelow and Julia L. Chaffee in trust during the life of Julia L. Chaffee. In December, 1902, Bigelow and Chaffee as trustees, the remaindermen joining, executed a lease of these premises to one Phillipsborn for a term of 10 years commencing May 1, 1904. The lease contains a covenant against underleasing the premises or assigning the lease without the written consent of the lessors. Phillipsborn had intended to use the building on the premises, which is a three-story brick building, for a cloak and suit store, but abandoned this idea and requested the plaintiff to take an assignment of the lease. This plaintiff agreed to do, provided the consent of the lessors should be obtained. The facts relating to such consent are as follows: An agent of Phillipsborn, one John E. De Wolf, talked with Bigelow, and Bigelow told him that he would consent to the assignment and the sublettings of the premises, provided the tenants were satisfactory. Plaintiff proposed to Bigelow to make changes in the building so as to prepare the ground floor for stores and the second and third floors for offices, and Bigelow said he would approve the proposed changes in the building if the guarantors on the lease to Phillipsborn would continue as guarantors under the assignment. The lease provided that proposed changes in the building should be approved by Bigelow and that the guaranty of the sureties was to terminate when the lessee had expended $4,000 in making the changes. The guarantors consented to the assignment. Among the proposed sublessees was the United Cigar Stores Company, and certain changes in the building were desired. These changes, together with other changes which would make the building fit for an office building, were submitted to Bigelow and approved in writing by him. There was evidence on the trial of this action tending to show that Bigelow had signed a consent to the subleasing to the Cigar Company, but no such writing was produced. Five thousand dollars was expended in remodeling the premises to make them suitable as an office building, and the plaintiff sublet all but one room in the building, and paid his rent to the lessors.

There was evidence that Miss Chaffee was of advanced years and was not experienced in business affairs. Mr. Bigelow testified, in effect, that she intrusted all of the trustee matters to him, and that with her acquiescence he acted practically as the sole trustee. In July, 1905, Bigelow and Chaffee resigned their trusteeship, and George P. Miller was appointed trustee. While Bigelow and Chaffee were trustees, the rent was always paid by the plaintiff or his agent to Bigelow, sometimes by a check payable to Bigelow, and sometimes, and always at last, by checks payable to the bank with which Bigelow was connected. The payments were credited on the books of the estate by a clerk, and the receipts describe the lease as the Phillipsborn lease. After Miller became trustee, the rent was collected by his agent until 1908, when Miller first learned of the assignment. It appeared that Miller knew that the premises were being sublet to various tenants before he became trustee and up to the time when he refused to receive rent from the plaintiff. In May, 1909, Miller and the remaindermen notified the plaintiff and his tenants to quit the premises, and in their action against them for unlawful detainer alleged, as the grounds for the action, that the covenant of the lease to Phillipsborn against assignment and subletting had been violated. The plaintiff then began action to enjoin the trustee and the remaindermen from bringing any action to declare the lease forfeited because of the breach of the covenant against assignment and subletting.

Upon the evidence tending to establish the facts as stated in the foregoing, the court found, among other findings, as follows: “(3) The said Julia Chaffee is, and was at the time of the leasing of said premises and execution of said lease, a woman of advanced age and inexperienced in business affairs; that she at all times intrusted to said Bigelow the entire management of said trust and the control and handling of the property covered thereby; that in all matters relating to the management of said trust estate the said Bigelow, by and with the consent of the said Chaffee, acted practically as sole trustee.” The court also found that Phillipsborn abandoned the design of using the building for the manufacture and sale of cloaks and dry goods and offered to assign the lease to the plaintiff upon condition that he would perform all the conditions and covenants to be performed by Phillipsborn; that the plaintiff informed Bigelow of his willingness to take an assignment of the lease provided he might sublet the premises to tenants for stores and offices and obtain the consent of the trustees, through Bigelow, to the assignment and subletting; that Bigelow assented to the assignment and to the proposed subletting provided the guarantors would continue their guaranty in force under such arrangement; and that, relying on the consent of Bigelow for the trustees to the assignment and subletting, the plaintiff expended upwards of $5,000 in changing and altering the building to fit it for renting to subtenants, and thereafter sublet the first floor as stores and the second and third floors as offices, the subtenants occupying under their subleases to Bigelow's knowledge and without objection from him or Miss Chaffee. The court found that there was no sufficient proof that a written consent had been given by the lessors to the assignment and subletting. It found that the plaintiff paid the rent according to the conditions of the lease and that Bigelow and Chaffee received it while they were trustees knowing that the lease had been assigned to the plaintiff, that the plaintiff had been engaged in subletting, that he had expended large...