Nw. Loan & Trust Co. v. Topp Oil & Supply Co.

• Decision Date: 09 May 1933
• Citation: 211 Wis. 489,248 N.W. 466
• Parties: NORTHWESTERN LOAN & TRUST CO. ET AL. v. TOPP OIL & SUPPLY CO.
• Court: Wisconsin Supreme Court

211 Wis. 489

248 N.W. 466

NORTHWESTERN LOAN & TRUST CO. ET AL.

v.TOPP OIL & SUPPLY CO.

Supreme Court of Wisconsin.

May 9, 1933.

Appeal from a judgment of the Circuit Court for Milwaukee County; Walter Schinz, Circuit Judge.

Action by the Northwestern Loan & Trust Company and another against the Topp Oil & Supply Company. From a judgment in favor of plaintiffs, defendant appeals.--[By Editorial Staff.]

Affirmed.

NELSON, J., dissenting.

Action commenced April 11, 1932, by mortgagee and trustee of an express trust to enjoin a lessee from removing a building and its equipment constituting a gasoline station from the leased premises. From a judgment entered for the plaintiffs on December 3, 1932, the defendant appeals.

On May 24, 1927, Carrie E. Pedersen owned and leased to the defendant the premises involved for the term of five years “to be used as and for a gasoline filling station.” One dollar was expressed as the consideration of the lease. The lessee agreed to pay $75 a month rental for the first two and $100 for the last three years of the lease. A dwelling house was situated on the premises at the time of the execution of the lease, and the lease recited that it was agreed that the lessor should remove the same from the premises, so that the lessee might “construct its filling station as soon as possible,” and that the lessee should pay no rental until said filling station should be completed, which should “be not later than July 15, 1927.” The lease gave to the lessee an option for a five-year extension at a rental of $125 a month, and an option for an additional twenty-year term at a rental of $150 a month. It also gave to the lessee an option to purchase the premises before 1934 at a price to be determined by arbitrators. It also provided that the lessor should pay the taxes on the premises during the term of the lease and they were so paid. The house was removed by the lessor to another location at an expense of $650, and the filling station was constructed by the lessee at a total expense of $5,000, $1,500 of which was for a building, $2,400 for a concrete pavement over the premises, and the rest for tanks, lights, air compressor, and plumbing. The building, twelve by twenty feet in dimension, is constructed of cement tile, plastered inside, covered with stucco outside, with a tile roof. Ninety feet of curbing was removed for construction of driveways. Two grease pits and a slightly elevated platform on which the gas pumps are located were constructed. A heating plant was put in the basement of the building, plumbing was installed for water and toilets, and two 1,000-gallon gasoline tanks were laid in pits covered with the concrete pavement. The lease contained nothing about removal of the property or any of it by the lessee, and no provision for restoring the premises to their original condition. No oral conversations were had in any way relating to these matters during negotiations for the lease. At the termination of the five-year period the lessee claimed right and was about to remove the building and equipment constructed by it on the premises when this suit was instituted. The cost of replacing the curb and filling the excavations and removing the concrete pavement would be $400 to $450. This would not include replacing trees and shrubbery that were removed by the lessee. The building was worth at time of trial about $800 and could be replaced new for $1,300.

The negotiations for the lease were conducted for the lessor by her son, one of the plaintiffs. The day previous to the execution of the lease the lessor executed to her son a mortgage to secure $2,000 at the time borrowed from him. This money was used in part towards payment of an existing mortgage held by a Mrs. Jones and a new mortgage was given to her to secure the remaining $2,000 due upon it, to which the mortgage to her son was made expressly subject. Mrs. Jones is not a party to the suit. Her mortgage was not recorded until about the time of the commencement of this suit, but the son's mortgage was recorded the day after the lease was signed. The lessor in July conveyed the premises to the plaintiff trust company in trust to hold and manage for her use during her life and to convey to her named children after her death.

The trial court found the facts as above set forth; that the intention of the parties at the time the lease was made was that the improvements covenanted to be erected on the premises were to be and become a part of the realty; that the removal of the buildings and improvements would result in irreparable injury for which no adequate remedy at law existed; and that the mortgages on the premises were unpaid and the holders had not consented to removal of the improvements. Judgment was entered enjoining removal of the improvements, or any part thereof.

Mayer, Wilde & Haertle, of Milwaukee (Walter F. Mayer and James D. Porter, both of Milwaukee, of counsel), for appellant.

Kearney, Kearney & Koelbel, of Racine, for respondents.

FOWLER, Justice.

[1] There can be no question that the building and equipment were so attached to and so used in the operation of the business conducted on the premises as to become a part of the realty. Gunderson v. Swarthout, 104 Wis. 186, 80 N. W. 465, 76 Am. St. Rep. 860;State ex rel. Gisholt Mach. Co. v. Norsman, 168 Wis. 442, 169 N. W. 429;Anglo American Mill Co. v. Wis. Hydro-Elec. Co., 189 Wis. 120, 207 N. W. 276;Thomsen v. Cullen, 196 Wis. 581, 219 N. W. 439;Fuller-Warren Co. v. Harter, 110 Wis. 80, 85 N. W. 698, 53 L. R. A. 603, 84 Am. St. Rep. 867. Being a part of the realty, they belong to the owner of the fee, unless there be a rule of law applicable between landlord and tenant under the facts of the case that vests the property therein in the lessee.

[2][3][4] The appellant bases its claim of ownership upon the rule quoted from State ex rel. Hansen Storage Co. v. Bodden, 166 Wis. 219, 221, 164 N. W. 1009, 1010: “In the absence of express stipulation to the contrary the general rule is that improvements made by a tenant on demised premises in furtherance of the purposes of the lease may be removed by him before or at the expiration of the term, provided he leaves the premises in as good condition as he received them.” We recognize this as a correct statement of the law. It is to be noted, however, that it is a general rule, and a general rule is subject to exceptions where special circumstances render its application inequitable and unjust. It is to be noted also that to render the rule applicable the lessee must leave the premises in as good condition as they were when he received them. The reason for the proviso is that the lessor shall receive the premises back in the same condition that they were in when he executed the lease. When this lease was executed, a dwelling house was on the premises, which the lessor was required by the terms of the lease to remove, and which she did remove at an expense of $650. To restore the premises to the condition which they were in when the lease was executed, the dwelling house would have to be moved back, at a presumptive expense of at least $650 more, the trees and shrubbery and lawn would have to be replaced at an additional expense, the amount of which does not appear. It is true that when the lessee actually took possession of the premises there was no dwelling house upon it, but to allow the lessee the benefit of the rule as strictly stated would ignore the reason of the rule entirely, and when the reasonof a rule does not apply, neither does the rule. Moreover, it does not appear that it is possible to restore the lessor to the position she was in when the lease was executed. Arrangements may have been and doubtless were made that cannot be unmade, and the lessee is not offering and claims it is not obliged to unscramble the lessor's eggs. The finding of the trial judge that removing the improvements would work irreparable injury to the plaintiff is justified. Under the circumstances involved we must hold that the general rule as stated is not applicable to the instant case.

The appellant claims that Shields v. Hansen, 201 Wis. 349, 230 N. W. 51, rules the instant case. To this we cannot agree. While the improvement which the defendant in that case was permitted to remove was made for the same purpose as the one involved herein, the instant case is clearly distinguishable, in that the leased premises there involved were vacant; it was not a valuable leasehold; the original lease was oral and the parties agreed that the defendant might remove the improvement on its termination; the lessor did not pay the taxes on the improvement; on removal of the building and concrete slab, “refilling the excavations” left the premises “in the identical condition that they were when leased” (page 352 of 201 Wis., 230 N. W. 51, 52); the building was of wood covered with stucco, bolted onto a concrete slab, without basement and was built with especial view to its removal; the lease was a short-term lease, originally oral, and after four years' occupation under it was put in writing for three years at increased rental. Every case must stand on its own facts. The facts here involved are widely different, as appears from the statement thereof preceding the opinion.

The case of Dougan v. H. J. Grell Co., 174 Wis. 17, 182 N. W. 350, is also relied on by the appellant. It may also be distinguished by its facts. Two leases were involved. The one of them the more nearly approaching the instant case in its facts leased for ninety-nine years a strip of farm land forty by one hundred ninety-five feet at a nominal annual rental of $5. The premises were to be used for no other purposes than operating a cheese and butter factory, and the lease granted “the privilege of erecting buildings thereon” suitable for the purpose. The buildings erected were assessed as personal property and the lessee paid the taxes. An injunction against removal was...