Osterling v. Sturgeon

• Decision Date: 06 February 1968
• Docket Number: No. 52760,52760
• Parties: Gunnar A. OSTERLING, Appellant, v. Dale STURGEON, Appellee.
• Court: Iowa Supreme Court

Page 344

156 N.W.2d 344

261 Iowa 836

Gunnar A. OSTERLING, Appellant, v. Dale STURGEON, Appellee.

No. 52760.

Supreme Court of Iowa.

Feb. 6, 1968.

McDonald, Sayre & McDonald, Cherokee, for appellant.

Miller, Miller & Miller, Cherokee, for appellee.

GARFIELD, Chief Justice.

This is an action in equity by Gunnar A. Osterling, landlord, to collect rent on the west half of the first floor and basement of a business building in Cherokee and foreclose the contractual lien therefor. Defense of the tenant, Dale Sturgeon, was that a flood of the Little Sioux River in April, 1965 in effect destroyed the building, rendered it unfit for the use contemplated by the parties and relieved defendant from paying rent. Following trial to the court this defense was sustained and plaintiff appeals from the adverse decree.

Unless we are to disregard the applicable law we must reverse.

I. On July 6, 1956 plaintiff-owner leased the premises to defendant for ten years commencing September 1, 1956. The entire building was 120 feet wide, facing Main Street, by 121 feet deep. Incidentally the building, built in 1952, cost about $80,000, the land on which it is located $10,000 and an addition built at the time the lease was made cost about $22,000.

The lease provides: 'these premises are to be used for a bowling alley, with a bar, refreshment and lunchroom in connection therewith. * * * The Tenant agrees to use the said premises for no other purposes * * * and activities related to bowling and not to underlet the same * * * nor assign this lease without the written consent of the Landlord * * *.'

The lease contains no covenant by the lessor to repair nor for abatement of rent in the event of casualty to the premises. It is not claimed any statute so provides.

There was some delay in defendant's occupancy of the premises for which an agreed adjustment in the rent was made. Defendant first occupied them with his bowling alley in operation in October, 1956 and paid the agreed rent up to and including April, 1965. The monthly rent was $430 and the total unpaid rent at the end of the term of the lease was $6,880.

The Little Sioux River flows through Cherokee a little more than a quarter mile east of the building. In early April, 1965 the river rose to an unprecedented height of 27.2 feet, causing the worst flood in the city's history. Nearly 350 residents were forced from their homes, 250 national guardsmen from four cities were called out, and boats were used for travel in the flooded area.

For the first time since the leased premises were built water covered the floor on which defendant installed his bowling lanes. The basement, under the front 40 feet of the building, was filled and the water was three feet deep on the bowling alleys. It was five to seven days before it receded and the alleys were damaged beyond repair. They were defendant's property, installed by him. The building itself was not damaged except for the paint and could have been occupied in about a week after the flood.

There had also been a lesser flood in 1962 when water entered the basement of the premises but none entered the bowling alley part. Still lesser floods occurred in 1960 and 1961 but none in 1963, 1964 or 1966.

Defendant testified he was unable to obtain a loan from the Small Business Administration with which to install new bowling lanes in the leased premises and in any event deemed it unwise to do so for fear of future flood damage. He then constructed a new building where he was operating a bowling alley at the time of trial in October, 1966. Efforts by both parties to find a renter for the leased premises proved unsuccessful although the east half of the building remained occupied by a tenant.

We deem it unnecessary to set out facts bearing on issues no longer in the case as the appeal stands.

II. At common law injury to or deterioration of the leasehold or building thereon by flood, fire or other casualty, under such a lease as we have here did not relieve the tenant from his obligation to pay rent. Harris v. Heackman, 62 Iowa 411, 17 N.W. 592, 593; Woodbury Company v. Wm. Tackaberry, 166 Iowa 642, 645, 148 N.W. 639; Gamble-Robinson Co. v. Buzzard, 8 Cir., Iowa, 65 F.2d 950, 952 and citations; Standard Industries, Inc. v. Alexander Smith, Inc., 214 Md. 214, 133 A.2d 460, 61 A.L.R.2d 1433, 1441, and citations; 1 Tiffany, Landlord and Tenant, p. 1191.

Defendant contends, and it may be conceded, where the lease is for only a portion of a building its destruction terminates the tenant's obligation to pay rent. Gamble-Robinson Co. v. Buzzard, supra, at p. 953 and citations; 1 Tiffany, Landlord and Tenant, pp. 1196--1197; 32 Am.Jur., Landlord and Tenant, sections 494, 495.

This exception, just referred to, to the rule has been applied and the tenant relieved from paying rent only where it appears the leasehold was totally destroyed, not where it was merely injured or damaged. 'Total destruction, perhaps, does not mean such a destruction as does not leave one stone lying upon another, but it must be such as destroys the leased property in its character as a room or a building.' Humiston, Keeling & Co. v. Wheeler, 175 Ill, 514, 51 N.E. 893, 894; Gamble-Robinson Co. v. Buzzard, supra, and citations at p. 953 of 65 F.2d. See also Standard Industries, Inc. v. Alexander Smith, Inc., supra, 214 Md. 214, 133 A.2d 460, 61 A.L.R.2d 1433, 1441 and citations; Scharbauer v. Cobean, 42 N.M. 427, 80 P.2d 785, 118 A.L.R. 102 and citations; Chase & Co. v. Fleming, 143 Iowa 452, 455, 121 N.W. 1055.

'In order that the liability for rent thus cease by reason of the destruction of the building or of the apartment leased, it is necessary that the premises leased be entirely destroyed, and the liability for rent continues as before, if the building or apartment leased still exists, although it be necessary to repair it in order that it be tenantable.' 1 Tiffany, Landlord and Tenant, p. 1197. See also 52 C.J.S. Landlord and Tenant § 486b, p. 256.

The slight damage caused by this flood to the portion of the building leased to defendant here falls far short of such destruction of the leasehold as relieves him from his obligation to pay the rent stipulated in the lease. No authority has come to our attention which sustains such a result.

As indicated, the building was not damaged structurally and the only damage to it of any kind, as we understand the record, was to the paint on the lower portion of the inside walls. The floor of the building was concrete, joists were steel and the walls were of clay and cement block and brick. Physical damage from the flood was almost all confined to defendant's own property. Plaintiff, of course, was in no way at fault or responsible for this unprecedented flood.

Iowa decisions which lend support to the conclusion just stated include Benson v. Iowa Bake-Rite Co., 207 Iowa 410, 412--416, 221 N.W. 464, which approves what Chase & Co. v. Fleming, supra, holds is meant by 'total or partial destruction' of the leasehold; Woodbury Company v. Tackaberry, supra, 166 Iowa 642, 647, 148 N.W. 639; Healey v. Tyler, 150 Iowa 169, 129 N.W. 802.

The instant case is considerably stronger for plaintiff than O'Neal v. Hawkeye Lbr. Co., 185 Iowa 452, 170 N.W. 792, where the leased premises were to be used only for operating a garage and amusement park. By implication the lessee was authorized to erect such buildings as in its judgment were required to carry on such business. When the lease was executed the lessee owned such buildings. They were burned without lessee's fault and the burning made the premises untenantable as a garage and amusement park. The lessee resisted payment of rent because the lease provided it should stop if 'said premises are untenantable by reason of fire...