Republic Building v. Gaertner

• Decision Date: 27 November 1923
• Citation: 256 S.W. 1111,201 Ky. 509
• Parties: REPUBLIC BUILDING v. GAERTNER.
• Court: Kentucky Court of Appeals

256 S.W. 1111

201 Ky. 509

REPUBLIC BUILDING v. GAERTNER.

Court of Appeals of Kentucky.

November 27, 1923

Rehearing Denied Jan. 29, 1924.

Appeal from Circuit Court, Jefferson County, Common Pleas Branch Fourth Division.

Action by Phillip A. Gaertner against the Republic Building. Judgment for plaintiff, and defendant appeals. Affirmed.

Edw. G Klemm and Chas. R. Ecker, both of Louisville, for appellant.

C. B Seymour and Shackelford Miller, both of Louisville, for appellee.

SAMPSON C.J.

Appellee Gaertner, leased a plot of ground at the northeast corner of Walnut and Fifth streets, in Louisville, to the predecessor in title of the Republic Building, a corporation, for the term of 99 years, reserving a rental of $2,500 per year for the first 10 years; $2,750 per year for the second period of 10 years; $3,000 per year for the third period of 10 years; $3,250 per year for the fourth, and $3,500 for the fifth period of 10 years, etc.; it being stipulated in the contract--

"that said lessees further covenant and agree to pay all taxes, assessments, water rents, or other assessments imposed, assessed, or levied upon said premises or upon any part thereof, or any buildings or improvements thereon, or the income from said premises, from and after the 22d day of June, 1910, and for each and every year thereafter during the continuance of this lease, including the year 2009, it being the intent of the parties that the lessor shall receive the aforesaid rentals net and free from any sort of tax or deduction. Said payments to be made when such assessments, rates, and impositions shall be due, and to keep the improvements now upon said lot, or that may hereafter be put upon said lot, insured for 80 per cent. of their insurable valuation in good and solvent insurance companies, to be approved by said lessor or his assigns, and assigned to him as his interest may appear. This insurance covenant not to affect the hereinafter stated provisions about the tearing down of the present improvements on said lot. Should the lessees at any time fail to pay any such tax assessment, water rent, special assessment, or other government charge, or fail to keep up the insurance as hereinafter provided, the lessor may pay the same or affect such insurance, and any sum so paid shall be repaid by the lessees on demand with interest at the rate of 6 per cent. per annum, payable semiannually until paid. If not repaid, the sum so paid shall be added to and deemed a part of the next installment of rentals due by lessees to lessor."

The question is whether the foregoing paragraphs from the lease contract are sufficiently broad to include the income taxes due the United States government upon the rents accruing and to be paid annually by the Republic Building to appellee, Gaertner. The latter insists it is, while the corporation insists it is not. It says:

The phrase in the lease "income from said premises" does not mean the "rent" payable to the lessor thereunder, because the word "rent" would otherwise have been used therein; if such had been the intention of the parties. The lease provides that the lessee shall pay to lessor "as rent" during the first ten years $2,500 per annum; during the second ten years $2,750 "as rent," during the next ten years $3,000 per annum "as rent," during the next ten years the sum of $3,250 per annum "as rent," and during the residue of the term the sum of $3,500 per annum "as rent." In none of these connections is the annual rental called or referred to as "income." Lessee has constructed and now conducts a large office building on the leased premises from which it (appellant) derives an income, and by the phrase quoted was meant that lessee...