Schoen v. New Britain Trust Co.

• Decision Date: 02 June 1930
• Citation: 111 Conn. 466,150 A. 696
• Court: Connecticut Supreme Court
• Parties: SCHOEN ET AL. v. NEW BRITAIN TRUST CO.

150 A. 696

111 Conn. 466

SCHOEN ET AL. v. NEW BRITAIN TRUST CO.

Supreme Court of Errors of Connecticut.

June 2, 1930

Appeal from Superior Court, Hartford County; L. P. Waldo Marvin Judge.

Action by the plaintiff lessees, Anna M. Schoen and another, against the New Britain Trust Company, trustee, to recover $15,000 paid to the lessor, of whom the defendant is testamentary trustee, at the making of the lease, and tried to the court. Judgment for the defendant, and appeal by the plaintiff.

No error.

The trial court found the following facts: On January 27, 1921 Patrick S. McMahon leased to Martin H. Kelleher the premises known as the Empire Theater, with the appurtenances and appliances connected with it, to be used for theater purposes only, for the term of ten years from February 1, 1921, for a rental of $300 a week except the first two weeks in July in each year. The lessees agreed in the lease to comply with and conform to all the laws of this State and the by-laws and regulations of the city of Hartford relating to health, fire, etc., so far as the premises leased were or might be concerned.

On or before March 3, 1925, by a series of assignments, the plaintiffs, Anna M. Schoen and Edward J. McMahon, became the lessees of these premises under this lease, and they were managed by Edward McMahon and Max Schoen as agents for Anna M. Schoen. On January 6, 1923, Patrick S. McMahon died testate, and the defendant was named as executor and trustee under his will. The defendant has not completed its duties as executor, but in its administration account filed November 19, 1927, reserved $4,500 for taxes, claims, etc., which has not since been accounted for.

The above-described premises were included in the residue of his estate, all of which was devised and bequeathed to the defendant as such trustee, and have been in its possession and control as such trustee since the filing of the account.

The lease contained this provision: " The lessor herewith acknowledges the receipt of $15,000 which is to be applied on the last year's payment." The $15,000 was paid by Kelleher to McMahon at the execution of the lease. It was equivalent to one year's rent and was accepted by McMahon as the last year's rent paid in advance. It was at no time considered as a deposit for security by the parties to the lease. At the date of the lease the theater contained 1,120 seats. This number was reduced by the building authorities of Hartford to 990 in 1922, at which time Anna Schoen, one of the plaintiffs, was a lessee. Thereafter the lessees continued to pay the rent of $15,000 and made no claim that the reduction of the seats affected the lease. In June, 1926, the building commissioner of Hartford notified the lessees that in his opinion the theater did not comply with certain building ordinances, and suggested two plans to facilitate the emptying of the theater in case of fire or panic. The second plan was to widen the fire exit on one side only and reduce the number of seats from 990 to 750. The plaintiffs agreed to this, after the defendant agreed to bear its expense. The defendant in July 1926, bought a strip of land three feet wide on Asylum street adjacent to the west line of these premises at a cost of $12,000, which was $6,000 in excess of its fair market value, and expended other amounts in order to comply with the requirements of the building commissioner in widening the fire escapes and in building a vault. In carrying out plan 2, a dispute arose as to who should bear the cost of removing the useless seats. Finally the trustee agreed to bear it, and 240 seats were removed from the spaces designated by the lessees and with their full knowledge and consent. These expenditures and changes were made by the defendant with the understanding that the lessees would continue to run the theater under the lease during the balance of its term. The defendant met the requirements of the commissioner in a fair way. At no time prior to August 27, 1927, did the plaintiffs demand from the defendant the return of $15,000 either as a deposit for security or as a payment of rent in advance. During the year 1926, prior to the removal of the seats, the gross income of the theater shrank from an average of $1,000 a week in 1925 to $700 a week.

In May or June, 1927, when the lessees brought up a question of rent, the trustee, having examined the lessees and their books, refused to accept a reduction because it was convinced that the reduction in the number of seats had not affected the receipts of the theater. After the defendant's refusal to make a rent adjustment in May and June, the lessees continued to pay rent for several months further. In October, 1927, the trustee attached the gate receipts of the plaintiffs for back rent, and, when the lessees found that the keeper would collect the receipts of the theater, they turned over the keys to the attaching officer and abandoned the premises. Later in the same day the defendant instituted an action of summary process against the plaintiffs, and on November 3, 1927, obtained judgment in that action. The lessees at this time owed the defendant nearly $3,000 for back rent and have never paid the same. The lessor has been unable to rent the premises since this date, and the building department of Hartford looks with disfavor upon the reopening of the theater. In August, 1927, the plaintiff notified defendant that, unless the rent was reduced about 25 per cent., they would consider the lease at an end and refuse thereafter to pay rent. They subsequently paid no rent, but continued to occupy the premises until the keys were given up on November 20, 1927, when they again demanded a return of $15,000. This demand was refused by the defendant, and thereupon plaintiffs instituted this action.

Jacob Schwolsky, of Hartford, for appellants.

Mortimer H. Camp and Margaret P. Camp, both of New Britain, for appellee.

Argued before WHEELER, C.J., and MALTBIE, HAINES, HINMAN, and BANKS, JJ.

WHEELER, C.J. (after stating the facts as above).

All of the exceptions based on the motion to correct but one, and this is of no material consequence, are defective in not stating the refusal of the court to find a material fact " which was an admitted or undisputed fact," or in finding a material fact " without any evidence," and they also fail to state the ground or basis of each exception except as to six paragraphs. De Feo v. Hindinger, 98 Conn. 578, 120 A. 314, and Morganelli v. Derby, 105 Conn. 545, 548, 135 A. 911. For these reasons we do not consider them.

The plaintiffs abandoned the premises on October 20, 1927, and the lease thereupon terminated. From August 20, 1927, the plaintiffs considered and treated the lease as at an end and refused thereafter to pay rent. The finding is clear that the termination of the lease occurred through the plaintiffs' own willful default and not through the action of the defendant. The reduction of the seats in the theater was due exclusively to the order of the public authorities, which neither party could prevent, and the removal of them by the defendant at its own expense was done with the consent of the plaintiffs.

The plaintiffs' recovery of the $15,000 payment depends upon the construction which may be given this provision of the lease: " The lessor hereby acknowledges the receipt of Fifteen thousand dollars, which is to be applied on the last year's payment." The only payments referred to in the lease are those for rent; " the last year's payment" obviously refers to the payment of rent--that of the last year of the term of the lease. The period of the lease was ten years; the last year's payment under the lease was $15,000. Two constructions of this provision are claimed--by the plaintiff that it is a deposit or security by the defendant that it is a prepayment of rent. The lease is characterized by a complete absence of anything, in terms or words, or by inference, indicating that the $15,000 was a mere deposit as security for the rent. It neither states for what the $15,000 was security nor provides that there should be no breach of the performance for which this amount is claimed to be security. No construction is open to the plaintiffs which will enable...