Sprecher v. Weston's Bar, Inc.
| Decision Date | 17 May 1977 |
| Docket Number | No. 75-101,75-101 |
| Citation | 78 Wis.2d 26,253 N.W.2d 493 |
| Parties | Albert R. SPRECHER, personal representative of the Estate of Albert Sprecher, Deceased, Plaintiff-Appellant, Cross-Respondent, v. WESTON'S BAR, INC., a Wisconsin Corporation, and Julia Weston, Defendants- Respondents, Cross-Appellant. |
| Court | Wisconsin Supreme Court |
Syllabus by the Court
This is an appeal in a breach of contract action arising out of the transfer of a class B liquor license. Albert R. Sprecher, personal representative of estate of Albert H. Sprecher, deceased, plaintiff-appellant, was awarded judgment against Weston's Bar, Inc., and Julia A. Weston, defendants-respondents, jointly and severally, for $4,903.42 and costs and disbursements. On appeal the plaintiff raises issues concerning the amount of damages awarded and the failure of the trial court to issue a requested restraining order. The defendants cross-appealed from the judgment against them, raising issues concerning the trial court's failure to dismiss Julia A. Weston in her individual capacity as a party-defendant, and the failure to dismiss the complaint for alleged pleading and proof defects.
Hill, Quale, Hartmann, Bohl & Evenson, Baraboo, submitted brief, for appellant.
Myron E. LaRowe, Reedsburg, submitted brief, for respondent; John G. Gerlach, Madison, of counsel.
In 1964, Albert H. Sprecher and Alma Sprecher owned and operated Sprecher's Bar, Inc., at 616 Water Street, in Prairie du Sac, Wisconsin. Albert H. Sprecher was the licensing agent for the corporation which held the class B liquor license. In the same year they sold Sprecher's Bar, Inc., to Cyril G. and Julia A. Weston but retained ownership of the building in which it was located. The Westons changed the name of the corporation to Weston's Bar, Inc. In years subsequent to 1964, the village board granted the liquor license to Weston's Bar, Inc.
A series of yearly leases were executed between the parties for the building in which the business was operated. On April 4, 1969, the parties entered into a new or renewal lease, which ran for a period of one year from July 1, 1969, to June 30, 1970. Paragraph 15 of the lease stated:
In September, 1969, Cyril G. and Julia A. Weston, in their individual capacities purchased the building and lot next door to the building which they were then leasing from the Sprechers. On December 19, 1969, Weston's Bar, Inc., through its sole shareholders, Cyril G. and Julia A. Weston, applied to the village board for a transfer of the liquor license from the Sprecher building to the building owned by the Westons. On December 23, 1969, the village board approved the transfer. The physical transfer of the tavern business occurred in May, 1970. Weston's Bar, Inc., continued to pay rent under the lease to the Sprechers until the lease terminated on June 30, 1970.
In April, 1970, the Sprechers commenced suit against Weston's Bar, Inc., and the Westons individually, seeking an injunction to restrain them from attempting to have the liquor license transferred from Sprecher's premises to the Weston premises. The Westons demurred and the trial court sustained the demurrer on the grounds that the provision in the lease dealing with the surrender of the license was void as against public policy. Judgment was entered accordingly and the Sprechers appealed to this court.
In Sprecher v. Weston's Bar, Inc., 52 Wis.2d 677, 191 N.W.2d 212 (1971), this court reversed, holding that the pertinent lease provision was susceptible to an interpretation that ". . . the lessee upon the termination of the lease would not seek to have the liquor license transferred or a new license issued . . ." and that such an agreement, not restricting the discretionary authority of the licensing body was not void as against public policy. Sprecher, supra, 680, 191 N.W.2d 214. This court stated that ". . . even if an injunction is no longer possible, equity may grant damages in lieu of the equitable relief . . ." The judgment was reversed and the case remanded with directions to the trial court to overrule the demurrer and grant leave to the defendants to file an answer. Sprecher, supra, 681, 191 N.W.2d 212.
The Sprechers filed an amended complaint alleging that they had been damaged by the wrongful transfer of the liquor license from the leased premises in violation of the lease terms. They sought damages from both Weston's Bar, Inc., and Cyril G. and Julia A. Weston, individually, and further sought an order that the liquor license be returned to the leased premises and that an injunction be granted restraining its subsequent transfer therefrom by the Westons.
The defendants answered, denying the essential allegations of the complaint and alleging the affirmative defense that Cyril G. and Julia A. Weston were not proper parties because they were acting in their corporate capacities. They also counterclaimed for damages in the amount of certain repair expenditures incurred by them while occupying the Sprecher premises.
The action was originally commenced by Albert H. and Alma Sprecher, owners of Sprecher's Bar, Inc., against Weston's Bar, Inc., and Cyril G. and Julia A. Weston, owners of Weston's Bar, Inc. Albert H. Sprecher died and Albert R. Sprecher, personal representative of his estate, was substituted as party-plaintiff. Alma Sprecher and Cyril G. Weston also died and they were dismissed as parties to the action.
Trial was to the court, and the trial court determined that a breach of the lease had occurred; that Weston's Bar, Inc., and Julia A. Weston were jointly and severally liable for damages caused by the breach; that the plaintiff had established damages for the loss of the liquor license to be in excess of $20,000; but that the plaintiff was entitled to judgment in the sum of only $5,000 due to his failure to mitigate damages. The trial court further determined that the defendants were entitled to judgment on their counterclaim for repair expenditures on the Sprecher building, in the amount of $96.58.
Judgment was entered against Weston's Bar, Inc., and Julia A. Weston, jointly and severally, in the amount of $4,903.42, plus costs and disbursements.
Four issues are raised by the facts of this case:
1. Did the plaintiff fail to plead and prove a condition precedent to the recovery of damages for breach of the lease?
2. Do the facts of this case justify holding the corporate-shareholder/officer-defendant, Julia A. Weston, individually and personally liable for the damages incurred by the plaintiff?
3. Did the trial court properly apply the doctrine of mitigation of damages so as to reduce the plaintiff's judgment?
4. Is the plaintiff entitled to injunctive relief to prevent the defendants from applying for a renewal of the liquor license?
CONDITION PRECEDENT.
During the trial, the trial court denied the motions of the defendants for dismissal of the action on the grounds that the plaintiff had failed to allege and prove the performance of a condition precedent in the lease. The defendants argue that such ruling constituted error.
Paragraph 15 of the lease, in pertinent part, states ". . . said Lessee, upon the request of the Lessor, will quietly and promptly yield and surrender and deliver up to the Lessor any and all licenses . . ." (Emphasis added.) The defendants contend that the underlined quote above constitutes a condition precedent; that the plaintiff failed to allege a request for either the surrender of the license or a request that the defendants not transfer the license; and that the plaintiff failed to prove either.
In DeSalvo v. Howell Plaza Inc., 38 Wis.2d 167, 172, 156 N.W.2d 473 (1968), this court quoting 5 Williston, Contracts (3d ed.), pp. 141-143, sec. 666A, set forth the criteria for finding a condition precedent:
" . . . .' "
See also: Nixon v. Farmers Ins. Exchange, 56 Wis.2d 1, 4, 201 N.W.2d 543 (1972); Restatement, Contracts, [78 Wis.2d 35] p. 359, sec. 250; 3A Corbin, Contracts, pp. 16, 17, sec. 628.
In Locke v. Bort, 10 Wis.2d 585, 588, 103 N.W.2d 555 (1960), this court said that in determining whether a clause in a contract constituted a condition precedent, it was essential for the trial court to look at the entire contract from the standpoint of the parties at the time they executed it and the purpose they had in view in doing so. The court in Locke, supra, 588, 589, 103 N.W.2d 558, quoted 3 Williston, Contracts, (rev.ed.), p. 2246, sec. 799, for the following principle:
" 'In each case, the intention of the parties to make the debt contingent or otherwise, must be gathered from the language used, the situation of the parties, and the subject matter of the contract, as presented by the evidence.' "
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