Roshek Realty Co. v. Roshek Bros. Co.

• Decision Date: 17 December 1957
• Docket Number: No. 49292,49292
• Citation: 87 N.W.2d 8,249 Iowa 349
• Parties: ROSHEK REALTY COMPANY, an Iowa Corporation, Appellant, v. ROSHEK BROTHERS COMPANY, an Iowa Corporation, Appellee.
• Court: Iowa Supreme Court

Page 8

87 N.W.2d 8

249 Iowa 349

ROSHEK REALTY COMPANY, an Iowa Corporation, Appellant, v. ROSHEK BROTHERS COMPANY, an Iowa Corporation, Appellee.

No. 49292.

Supreme Court of Iowa.

Dec. 17, 1957.

Louis F. Fautsch, Dubuque, and Herrick & Langdon, Des Moines, for appellant.

O'Connor, Thomas, McDermott & Wright, Dubuque, for appellee.

GARFIELD, Justice.

Plaintiff, owner of a large business block in Dubuque, brought this action of forcible entry and detainer under chapter 648, Code 1954, I.C.A., to remove defendant lessee and put plaintiff in possession of most of the building. Alleged grounds of the action are that defendant holds over after termination of its lease and contrary to its terms. See Code section 648.1, subsections 2 and 3. Pursuant to Code section 648.5 the action was tried as an equitable one. Relief was denied and plaintiff has appealed. Our review is on course de novo. Rule 334, Rules of Civil Procedure, 58 I.C.A.

Plaintiff leased the premises by written lease to defendant for 10 years commencing February 1, 1945. Pursuant to provisions of the lease the term was extended to January 31, 1970. The monthly rent was $3125 payable on the first day of each month, plus a percentage of receipts from sales of merchandise by the lessee, payable annually. These percentage payments are not here material. Defendant did not pay its rent for April, 1956, on or before May 9 and on the latter date plaintiff undertook to declare the lease forfeited.

The vital provision of the lease, prepared by plaintiff, is:

'(11) Default: In case the rent for any one month shall be due and remain due and unpaid for thirty days after the same shall become due and payable and demand therefor has been made by the Lessor in writing, such failure to pay said rent * * * shall work a forfeiture of this lease at the option of Lessor, and thereupon the Lessor shall have the right to re-enter and repossess said premises, without action as of its first estate, or may bring its action for forcible entry and detainer under the Laws of Iowa, as it may elect, * * *'

I. The principal controversy is whether plaintiff has shown it made written demand for the April rent as a prerequisite to declaring the lease forfeited. Throughout the tenancy plaintiff customarily mailed to defendant on or about the first day of each month a typewritten statement on a printed form like this:

'Roshek Realty Company

Roshek Building

Dubuque, Iowa

Please detach and return this stub with your check.

Your check returned by your bank will be your receipt.

April 1, 1956

In account with

Roshek Brothers Company

Eighth and Locust Streets

Dubuque, Iowa.

Amount paid $_____

................................................................................

* * *

April 1, 1956

April Rent

$3,125.00

Roshek Realty Company

Roshek Building

Dubuque, Iowa'

Mrs. Wareham, secretary to secretary-manager Rohde of plaintiff corporation, testified she mailed by ordinary mail a statement like this to defendant on April 2, 1956, at the same time she mailed two other such rent statements to other tenants. She sent statements similar to the above to over 40 tenants but all except the three before referred to were delivered personally by an employee of plaintiff. Plaintiff's offices are in the same building where defendant has its store and offices and where most of the other tenants evidently are located. Parts of some of the upper floors of the store building are used by other tenants for offices.

Plaintiff contends the statement quoted above customarily mailed out on the first of each month constitutes a written demand for the rent such as the lease requires as a prerequisite to its forfeiture. There is room for argument that the parties to the lease contemplated a written demand in addition to the routine statement sent defendant the first of each month for over 11 years and sent other tenants as well. Part of the statement was apparently intended to be detached and returned to plaintiff for its convenience in bookkeeping. When the lease was made the presidents respectively of these corporations were brothers each of whom, with his family, owned half the stock of both corporations. Under plaintiff's contention, if defendant's monthly rent check miscarried in the mails following receipt of the monthly statement plaintiff would have an absolute right to declare the lease forfeited without any other communication to defendant.

However, we will assume, without so holding, the statement above quoted constitutes a written demand within the lease provision for forfeiture. Nevertheless we have no hesitancy in deciding plaintiff has failed to carry the burden of showing the alleged demand was made upon defendant. There is no testimony defendant received it. Plaintiff relies wholly upon the rebuttable presumption it was received because, according to Mrs. Wareham, it was properly addressed, stamped and mailed. But we think the presumption plaintiff invokes has been rebutted.

Defendant produced as witnesses all officers and employees who have anything to do with receipt of mail and payment of rent commencing with the man who gets the mail at the post office, sorts it and leaves it on the desk of Mrs. Gilman, the personal shopper. She in turn opens the first class mail, divides it into piles and takes it to the office of John or Tom Roshek, defendant's vice president and president respectively, one of whom approves the rent statement. Mrs. Gilman testified she never saw a statement for the April rent and it would never get by without her seeing it, she was looking for it because it had occurred to her she hadn't seen it. Both the Rosheks said they never saw any April rent statement. Normally after the rent statements are approved they are left with Miss McGrath to be paid. She testified she never saw a statement for April. Mr. Braig, defendant's treasurer, gave similar testimony.

Plaintiff's secretary-manager instructed Mrs. Wareham not to send defendant a rent statement for May. Previously, on the few occasions during the more than 11 years of the tenancy when the monthly rent was not paid, it was included in and added to the statement for the succeeding month. John Roshek testified the rent was not paid in these few earlier months because statements therefor were not received. On May 9th plaintiff sent defendant a registered litter saying the lease was forfeited for nonpayment of the April rent. Mrs. Gilman received it the next day and immediately gave it to Tom Roshek. An extensive, thorough search for an April rent statement was forthwith instituted. Roshek testified he interviewed anyone who could possibly have had anything to do with it. No statement was found in any file, desk or elsewhere.

Defendant then sent for its attorney and a number of defendant's employees were again interviewed without finding any trace of a statement for April. Checks for the April and May rent were made out that same day (May 10th) and immediately delivered to plaintiff's secretary-manager. Checks for succeeding months until the trial in August were also delivered to him. Plaintiff never returned or tendered these checks to defendant.

Plaintiff claims a good deal for the fact defendant's witness who picks up the mail at the post office testified he did not see a blue envelope with a window in it addressed from plaintiff to defendant and that Mrs. Gilman in some of her answers referred to the blue envelope in which rent statements were received. Actually, the statement and the rather large printed return (to Roshek Realty Co., etc.) at the upper left of the envelope were blue but the envelope itself was white. The blue statement of course made the large transparent 'window' of the envelope appear blue. Whether the colored statement caused the rest of the envelope to appear light blue is not entirely clear although plaintiff's Mr. Rohde testified it did not. In any event since a substantial part of the face of the envelope appeared blue in color, references to it as blue by the mailman and Mrs. Gilman are not surprising.

Further, when all Mrs. Gilman's testimony is considered it does not seem materially weakened by her references to a blue envelope. She said: 'It is a blue statement and I believe the envelope is a lighter blue, although I am not sure, and it is a window type envelope. * * * During April no blue or other colored envelope from plaintiff reached my desk. No envelope containing a statement, demand or other writing for April reached my desk. * * * I am not sure about the lighter blue envelope, but I know the statement is a peculiar shade of blue.'

On rebuttal plaintiff's secretary-manager Rohde testified positively twice that before this action was commenced in August, 1956, no one acting for defendant advised him it claimed it had not received an April rent statement. On surrebuttal John Roshek said he informed Rohde on May 15th no such statement was received and defendant's treasurer Braig testified he, in the presence of Tom Roshek, told Rohde over the telephone on May 10th an exhaustive search was made for the statement but it was not found. Tom Roshek corroborated Braig. On surrebuttal Rohde did not deny John Roshek's testimony. As to that of Braig he said, 'It is possible Mr. Braig made the statements to which he testified but to my best recollection that was not included in the conversation.' Originally, on rebuttal, Rohde said 'Definitely no.' Evidently plaintiff now claims nothing for this rebuttal testimony.

The most reasonable explanation of defendant's failure to pay the April rent within 30 days after it became due is that the statement Mrs. Wareham testified she mailed did not reach defendant. It is conceded defendant is financially responsible. It has a Dun & Bradstreet rating of triple A-1 with financial responsibility of $1,000,000 or over, highest rating that credit agency gives any company. Defendant's practice is to pay its bills promptly but only upon receipt...