Lindeke v. Associates Realty Co.

• Decision Date: 30 July 1906
• Docket Number: 2,419.
• Citation: 146 F. 630
• Parties: LINDEKE et al. v. ASSOCIATES REALTY CO.
• Court: U.S. Court of Appeals — Eighth Circuit

146 F. 630

LINDEKE et al. v. ASSOCIATES REALTY CO.

No. 2,419.

United States Court of Appeals, Eighth Circuit.

July 30, 1906

E. H Morphy (F. H. Ewing and John M. Bradford, on the brief), for appellants.

Ralph Whelan (M. B. Koon and William H. Bennett, on the brief), for appellee.

The appellee, the Associates Realty Company, a corporation of Minneapolis, Minn., being the owner of 44 feet of lots 1 and 2, in block 221, in the city of Minneapolis, with the store building thereon, leased the same, on the 26th day of March 1900, to J. F. Evans, R. W. Munzer, Adam Pickering, A. V Hamburg, W. A. Alden and J. F. Elwell, partners under the firm name of Evans, Munzer, Pickering & Co., to run 50 years from the 1st day of April, 1900, at an annual rental of $5,000, to be paid in quarterly installments in advance, upon the 1st days of April, July, October and January of each year during said term; and further, and in lieu of additional rent, to pay all taxes and assessments of every kind and nature which may be assessed against any part of said leased premises, or against any buildings, structures, or improvements thereon or which might thereafter be placed thereon during said term. 'And in consideration of the premises, the said parties of the second part (Evans, Munzer, Pickering & Co.), for themselves, their heirs, executors, administrators and assigns, do hereby covenant and agree to and with the said party of the first part, its successors and assigns, that the said parties of the second part will, and their heirs, executors, administrators, and assigns shall, at all times during the continuance of this lease, and all taxes and assessments which may be levied upon or assessed against the said leased land, and against any buildings, structures, or improvements now on said land, or that shall hereafter be placed thereon during said term, or against any part of the same, promptly, and as above provided.

'It is further agreed between the parties hereto as one of the conditions upon which this lease is made, that 'if said parties of the second part, their heirs, executors, administrators or assigns, shall make default for the space of sixty (60) days in the payment of any of said rent, taxes or assessment, when any of the same shall become payable, or in the performance of any of the covenants or agreements on the part of the said parties of the second part of to be performed, the said party of the first part, its successors or assigns, may give said parties of the second part, their heirs, executors, administrators, and assigns, notice in writing of its or their intention to terminate the lease, and all the rights thereby reserved or granted unto the said parties of the second part, which notice shall be subscribed by the said party of the first part, its successors or assigns, or its agent or attorney, and shall specify the sums of money, or the covenant or agreement on account of the nonpayment, or nonperformance of which such declaration of forfeiture shall be made; and if the said parties of the second part, their heirs, executors, administrators, or assigns, shall not within four (4) months after the time of service of said notice, pay the rents, taxes, or assessments for the nonpayment of which said forfeiture shall have been declared, together with interest on said rent from the time the same shall have been due and payable, and any and all expenses that said first party shall have incurred in and about the preparation and service of said notice, or shall not perform the covenants or agreements for the nonperformance of which said forfeiture shall have been declared, then and in that event this lease shall, from and after the termination of said four (4) months, become ended and determined, and all rights of said parties of the second part, their heirs, executors, administrators and assigns hereunder, shall be forfeited and lapse as fully as if this lease had expired by lapse of time, and all buildings and improvements thereon shall remain as attached to the freehold and become and be the property of the party of the first part, its successors and assigns. And the said party of the first part, its successors and assigns, shall at once have all the rights of re-entry upon said premises, and to repossess and have and enjoy the same, which it, or they, would have upon the expiration of this lease by lapse of time.'

It is further covenanted and agreed that upon the termination of the lease, whether by lapse of time or under any of the conditions or provisions contained therein, the lessees or their assigns would peaceably surrender the possession of the property and the buildings and improvements thereon unto the lessor, its successors or assigns; except that such buildings that might have been previously removed from said premises are freed from the provisions of the contract; and that no waste or injury to said premises, or to any building thereon, should be permitted or committed by the lessees or any persons holding under them during the continuance of the lease.

The lessees further covenanted and agreed to keep the sidewalks, alleys and passageways contiguous or appertaining to the leased premises in good repair and free from obstructions as might be prescribed by the city of Minneapolis; and to indemnify and hold harmless the lessor against claims or demands that might be made by reason of any defect, imperfection, or obstruction in said sidewalks, alleys or passageways.

The lessees covenanted and agreed to keep the buildings insured in some reliable fire insurance company or companies, selected by the lessor, in an amount equal to the insurance value of said buildings, and cause the insurance policies to be made payable, in case of loss, to the lessor or its mortgagees, as collateral security for the payment of the rents due or to become due, and for the payment of taxes, assessments, and charges against said real estate; and that so soon as the new buildings hereinafter provided for should be erected, the lessees would cause the same to be insured in at least the amount of $12,500 and keep the same insured for not less than said amount, in some reliable insurance company selected as aforesaid, with a like provision respecting the payment of loss to the lessor, as collateral security, whether said policies are held and made payable in that way or not.

It was further covenanted and agreed that in case of any default by said lessees as aforesaid in the payment of any rents, taxes, or assessments due under the terms of the lease, the lessor, at its election, instead of declaring the lease forfeited might pay the taxes or assessment in default, and that all rents in arrears, and such taxes and assessments and insurance premiums paid by said lessor should become a specific lien and paramount to all other liens, drawing interest at the rate of 6 per cent, per annum; with power to foreclose said lien and sell the said leasehold estate, buildings, etc., at auction, as in case of the statute relating to the foreclosure of mortgages, and out of the purchase money to retain the amount of rent in arrears, taxes, assessments, and interest as aforesaid. Said lease was made subject to the terms and conditions of a certain party-wall contract made between certain parties and entered upon the records of the county, the conditions of which the lessees assumed and agreed to perform, and to indemnify the lessor harmless therefrom. It was also made subject to a mortgage thereon, which the lessor agreed to pay off, which mortgage was in the sum of $50,000. The said lessees for themselves, their heirs, executors, etc., further covenanted and agreed with the lessor that they would within five years from the 1st day of April, 1900, erect and complete upon said leased premises a substantial business building, to cover the entire property leased, at least five stories in height, and as substantial in character and attractive in appearance, and equal in manner and cost of construction to the building now occupied by said lessees adjoining said described premises, and would complete the same in all respects free and clear of any liens within the time aforesaid, and that they would cause the same at once to be insured as before stated.

It was further covenanted and agreed that before the old buildings situated on the premises were torn down and removed, the lessees should first enter into a valid contract with a responsible contractor providing fully for the erection and completion of said new building, according to plans and specifications providing for a building of the kind, etc aforesaid, which said contract should specifically provide that said building should be so erected and completed within a reasonable time therein specified, free from any lien or claim on the part of the contractors, and should be submitted to and approved by the lessor before the building standing upon the premises should be demolished as aforesaid. It was covenanted that the lessees or their assigns on paying the rents, taxes, assessments and insurance charges, and performing the covenants and agreements provided for in the lease, could peaceably hold and enjoy the premises during the continuance of the lease. The further covenant and agreement was that at all times during the last year of the said term of the lease and after the end of said first term, the lessor should have the option either to buy the improvements on said land or to sell said land to the lessees at a valuation in either case to be arrived at by arbitration, or to release said premises to the lessees for a further term of 20 years, at an annual rental of 5 per cent. on the fair market value of the land exclusive of the improvements, to be fixed by arbitration. Said valuation, however, not to...