Tungsten Co. of Am. v. Beach

• Court: Connecticut Supreme Court
• Writing for the Court: BEACH, J.
• Citation: Tungsten Co. of Am. v. Beach, 103 A. 632, 92 Conn. 519 (Conn. 1918)
• Decision Date: 30 April 1918
• Parties: TUNGSTEN CO. OF AMERICA v. BEACH et al. LONG HILL QUARRIES CO. v. TUNGSTEN CO. OF AMERICA.

103 A. 632

92 Conn. 519

TUNGSTEN CO. OF AMERICA

v. BEACH et al.

LONG HILL QUARRIES CO.

v. TUNGSTEN CO. OF AMERICA.

Supreme Court of Errors of Connecticut.

April 30, 1918.

Case Reserved from Superior Court, Fairfield County; Edwin B. Gager and William M. Maltbie, Judges.

Action by the Tungsten Company of America against Frederick C. Beach and the Long Hill Quarries Company, in which the defendant last named filed a cross-complaint against defendant Beach; and action by the Long Hill Quarries Company against the Tungsten Company of America. Both actions were referred to a committee, whose report was accepted by the superior court, and the causes came up on reservation. Judgment directed.

Action by sublessee against the lessor and the original lessee for damages for breach of the lessor's agreement to carry a reasonable amount of fire insurance on the premises and to apply the proceeds to the restoration of the property destroyed; cross-complaint by the defendant, the Quarries Company, against the defendant Beach, for damages, and for a decree settling the rights and obligations of the parties to the cross-complaint; also action by the Quarries Company against the Tungsten Company to recover possession of the premises, for cancellation of the sublease, and for other relief. These actions were brought to the superior court in Fairfield county and referred to a committee, whose report was accepted and the cases reserved for the advice of this court.

On May 28, 1915, the defendant Beach leased to the Quarries Company a tract of about 60 acres of land on which was located an undeveloped mine, containing tungsten-bearing minerals, with buildings and machinery more or less adapted to the operation of the mine, for a term of five years, with the privilege of renewal for ten years, and an option of purchase for $25,000, both lease and option running to the lessee's assigns. The lease also contained the following provision, which gives rise to this litigation:

"The lessor will carry a reasonable amount of fire insurance on the property hereby leased, and in the event of partial or total destruction by fire will apply said insurance funds, if so requested by the lessee, to the restoration of the property destroyed."

In January, 1916, the Quarries Company entered into a contract with Lyons and Grey, which is claimed by the Tungsten Company to be an absolute assignment of the lease, and by the other parties to be an operating lease of the mine and a contract for the sale of the Quarries Company's option of purchase, at an agreed price of $125,000, payable in monthly installments of not less than $500 during the continuance of the term. The Tungsten Company, as the successor in interest of Lyons and Grey, entered into the enjoyment of the premises, made certain improvements required by its contract, and operated the mine until May 20, 1916, when the buildings were totally destroyed by a fire of unknown origin. The buildings were old and dilapidated, with an actual value of $11,000 and a replacement cost—allowing for salvage of foundations —of $28,000. A reasonable amount of insurance to be carried was $8,000. After the fire it developed that Beach had not kept his agreement to carry fire insurance.

Shortly after the fire the Tungsten Company made a demand upon Beach for the payment to it of a reasonable amount of fire insurance, to be applied in restoring the destroyed property. The Quarries Company made a similar demand. Later the Tungssten Company made demand on Beach and on the Quarries Company for the application of a reasonable amount of fire insurance to the restoration of the premises, and notified the Quarries Company that under section 4045, G. S., it was not liable to pay rent, although remaining in possession, because the premises had been rendered untenantable by a fire occurring without its fault or neglect.

Thereafter the Tungsten Company ceased to operate the mine and failed to make the payments of rent and installments of purchase price required by the terms of the contract. Other material facts are stated in the opinion.

Spotswood D. Bowers, of New York City, for Tungsten Co. of America. Arthur M. Marsh and Philo C. Calhoun, both of Bridgeport, for Long Hill Quarries Co. Edward K. Nicholson, of Bridgeport, for Beach.

BEACH, J. (after stating the facts as above). All of the questions arising in the two cases were argued together, and as they arose out of the same transaction, or series of transactions, and, in the view which we take, depend, except as to the cross-complaint, upon the same questions of law, they will be discussed in one opinion.

The first question is whether the Tungsten Company is entitled to recover damages in its action against...