LaSalle Cartage Co., Inc. v. Johnson Bros. Wholesale Liquor Co., 44459

• Decision Date: 27 December 1974
• Docket Number: No. 44459,44459
• Citation: 225 N.W.2d 233,302 Minn. 351
• Parties: LaSALLE CARTAGE CO., INC., Respondent, v. JOHNSON BROTHERS WHOLESALE LIQUOR COMPANY, Appellant, and Midwest Patrol, Inc., Defendant.
• Court: Minnesota Supreme Court

Page 233

225 N.W.2d 233

302 Minn. 351

LaSALLE CARTAGE CO., INC., Respondent, v. JOHNSON BROTHERS WHOLESALE LIQUOR COMPANY, Appellant and Midwest Patrol, Inc., Defendant.

No. 44459.

Supreme Court of Minnesota.

Dec. 27, 1974.

Syllabus by the Court

1. Where all the intentions, expressions, acts, understandings, and pleadings of the parties indicate that a business arrangement constitutes an oral month-to-month lease, and the case was tried on that theory, the trial court did not err in finding as a matter of law that the arrangement constituted a lease of real estate and that the user was entitled to a written notice of proposed termination of the lease.

2. The trial court did not abuse its discretion in granting plaintiff's motion to amend its complaint where there was no showing of prejudice going to the merits of the case.

3. The damages awarded by the jury verdict were justified by the evidence and not excessive.

Shanedling, Phillips, Gross & Aaron and Felix M. Phillips, Minneapolis, for appellant.

Zeigler, Colvin & Peterson and Roger E. Petersen, Rochester, for respondent.

Heard before SHERAN, C.J., and PETERSON, KELLY and TODD, JJ., and considered and decided by the court en banc.

KELLY, Justice.

This is an action to recover damages allegedly sustained by plaintiff, LaSalle Cartage Co. Inc., based on (1) theories of conversion and wrongful termination of a lease as a result of defendant Johnson Brothers Wholesale Liquor Company's removal of plaintiff's radio antenna from a tower atop defendant's building, and (2) theories of breach of warranty of good and marketable title by defendant Midwest Patrol, Inc., in its sale to plaintiff of the tower to which the antenna was attached. ¹ The trial court ruled as a matter of law that the purported sale of the tower by Midwest was of no force or effect, title having previously vested in Johnson Brothers (hereinafter referred to as defendant). Thus, the conversion claim was determined adversely to plaintiff. The court also ruled as a matter of law that plaintiff's use of the tower and space on the third floor for a transmitter was based on a month-to-month lease, rather than a license, so that defendant's failure to give written notice of termination was a violation of statute (Minn.St. 504.06). The jury, by special interrogatories, determined that plaintiff sustained damages of $2,000 by reason of this failure to give proper notice of termination of the lease, and of $500 by reason of Midwest's breach of warranty. Defendant appealed from an order denying its motion for a new trial or for judgment notwithstanding the verdict. We affirm.

This case revolves around the ownership and use of a 100-foot radio tower affixed to the top of a 3-story building in St. Paul owned and used by defendant. Midwest had been a tenant of a portion of the building until early 1969 and had erected and used the tower with defendant's permission during its tenancy.

Plaintiff, a company engaged in general local cartage, acquired a new account in March 1969 which required radio communications between its office and its trucks. Plaintiff's search for an antenna tower led to discovery of the tower here in question, which it learned was for sale by Midwest. Before purchasing the tower, one of plaintiff's officers, John Dean, met with Lynn Johnson, one of defendant's officers. According to Dean, Johnson agreed that the tower could remain after plaintiff purchased it, and that a yearly rental could be worked out. Furthermore, according to Dean, no written agreement was involved because he and Johnson had previously transacted business orally. Lynn Johnson testified that the agreement reached at this meeting was for plaintiff's use of the tower itself, not just the roof, and that a monthly rental of $35 per month was agreed to about 5 weeks later. He also testified that Dean had not informed him at that time that plaintiff was purchasing the tower from Midwest.

On May 8, 1969, subsequent to the above agreement, plaintiff 'purchased' the tower from Midwest for $500. Plaintiff then affixed its antenna to the tower and installed its transmission equipment in a room in the building. Plaintiff's president, Harlan Lindman, testified that no rent was paid because of a collateral agreement with a third party giving that party the right to mount its antenna on the tower in exchange for its assumption of the rent obligation. The trial court instructed the jury that this arrangement, never communicated to defendant, was of no legal significance.

In September 1971, Mitchell Johnson, also an officer of defendant, telephoned John Dean at plaintiff's offices and told him they had 3 weeks to take their equipment off the building. The date of the call is in dispute, Mitchell Johnson testifying it was early in September, Dean testifying it was about the 19th or 20th of September. Lindman testified that Dean told him of the call, and he immediately began looking for another location for the antenna.

On September 23, 1971, plaintiff's antenna was disconnected and replaced on the tower by defendant's TV antenna. Depending on whose estimate of the date of the first phone call is accurate, this disconnection occurred anywhere from 3 days to 3 weeks later. Lindman went to defendant's building to investigate and was told by Mitchell Johnson that the reason for the disconnection was plaintiff's failure to pay rent. Service was restored a day later, and discussions regarding rent and ownership of the tower took place between Mitchell Johnson and Lindman during the next few days. During a meeting on September 28, 1971, Johnson demanded payment of all back rent through September 30, at $35 per month, totaling $980, which plaintiff paid later that day.

On October 1, 2 days later, without any further notice, defendant disconnected plaintiff's antenna for the second and final time. Plaintiff thereafter removed its equipment and antenna from the building and proceeded to transfer it to a tower in Bloomington. Lindman testified that radio communications were inoperative for 10 working days before being restored through use of the tower in Bloomington.

Lindman testified with respect to plaintiff's cost of operating the account which was dependent on radio communications, introducing into evidence records to establish plaintiff's average income per hour per week. He explained to the jury how his records were kept and showed how average income per hour dropped $3 during the 10 working days when communications were out of operation. Multiplying this figure by the number of driving hours during this period, he estimated the loss sustained by plaintiff to be $3,018.33.

The central issues on this appeal are:

(1) Whether the trial court erred in finding as a matter of law that the arrangement between plaintiff and defendant constituted a lease of real estate rather than a license.

(2) Whether the trial court abused its discretion in granting plaintiff's motion to amend its complaint after the case was called for trial to allege wrongful termination of a lease, in addition to the original claim of conversion.

(3) Whether the jury verdict of $2,000 damages is unjustified and excessive.

1. Defendant argues that it retained exclusive possession of all of its building (including the roof), that the parties intended the arrangement to be terminable at will, and that therefore the plaintiff was a licensee rather than a tenant, and that the trial court erred in deciding the converse. Plaintiff argues that since it had a right of access to the roof, as well as a room on the third floor where...