194 Iowa 751 | Iowa | 1922
The petition consists of five counts, all respectively setting forth the same cause of action, but based upon different theories of recovery. The facts are less prolix than the issues, and a brief statement of them will aid the brevity of a statement of the issues.
The plaintiff was, on and before December 15, 1915, a hotel-operating corporation. The defendants were, at that time, operating the Davenport Hotel, under a lease from its owner, one Neipp, running from November 1, 1907, to November 1, 1928. Negotiations were begun between plaintiff and defendants, looking to the acquisition of such lease by the plaintiff. Plaintiff secured 'from the defendants an option to purchase said lease and all the equipment owned by the defendants, for a consideration of $50,000. This option was never in terms accepted, but its purpose was indirectly attained in another manner. The defendants could not, under the terms of their lease, assign the same, without the consent of their lessor. By a subsequent arrangement, to which all the interested parties assented on December 15, 1915, the lease of defendants was by mutual agreement canceled, the cancellation to take effect on December 31, 1915. Neipp thereupon executed to the plaintiff a lease upon the property, at an increase of rental over that paid by the defendants, for a term beginning January 1, 1916, and ending on November 1, 1927. This left on the hands of the defendants a remnant of the leasehold term, amounting to 16 days. At the same time, or on the day following, the defendants delivered to the plaintiff a bill of sale of their entire equipment, including all personal property used by them in the operation of the hotel,
The first, second, and fifth counts of the petition are all predicated upon an alleged verbal agreement by the defendants to pay their proportionate share of the taxes of 1915. Counts 3 and 4 are predicated upon certain covenants respectively contained in the bill of sale and in an addendum thereto, the legal effect of which, as contended, would require the defendants to pay such pro-rata share.
It sliould be noted, at the outset of the discussion, that this is not a case where the plaintiff, as successor or assignee of a defendant, has had to protect his property by the payment of a debt or lien which the defendant ought to have paid. The plaintiff has not paid any of the taxes involved in the controversy. "Its contention is that it has bound itself to its lessor, Neipp, under the covenants of its lease, to pay the same, though it has not, in fact, discharged its obligation to its lessor. The plaintiff’s contention at this point is that the taxes of 1915 were lawful claims against the personal property of the defendants, within the meaning of the covenant of the bill of sale above quoted, and especially that the tax levied against the defendants upon the value of the personal property was a lien or charge, within the meaning of such covenant. Its further contention is that such taxes constituted an unpaid claim or bill, within the meaning of the covenant of the addendum, Exhibit D, above quoted.
As relates to the taxes on the real estate, they were not a lien or charge, either upon the real estate or upon the personal property, on December 15th. There was no breach, therefore, of the covenant of warranty contained in the bill of sale. Were they an “unpaid claim or bill,” within the meaning of the addendum ? The exact language of this covenant was as follows:
“That any unpaid claims or bills of any kind or nature
Can it he said that these taxes, even though chargeable to the defendants, were an indebtedness incurred while managing or operating the Davenport Hotel? This clause has undoubted reference to liabilities arising out of the operation of the hotel. Furthermore, we must presume that personal property taxes levied in 1915 were so levied against the defendants themselves. They were liable therefor to the public treasury. If the plaintiff had been compelled to pay them to protect its property, a different question would be presented. It has not paid them. The liability of the defendants therefor has continued, as before, to the public treasury.
As regards the taxes upon the real estate, it was incumbent upon the plaintiff to show: (1) That the defendants were under obligation to their lessor to pay such taxes; and (2) that it became necessary for the plaintiff, as assignee or successor in title, to pay the same, in order to protect its leasehold. Neither of these propositions is made to appear from the writings introduced in evidence, if we are to look to them alone. The lease to the defendants was executed in 1907. According to its terms, the term of the lease was to begin on November 1, 1907, and end on November 1,1928. There is a discrepancy in the lease, which is perhaps not now material, in that it purports, by a part of its language, to be a 20-year lease; whereas, the specific dates fixed for its beginning and its ending are as above set forth, which would make it a 21-year lease. The defendants occupied the premises thereunder for .a period of 8 years and 6 weeks, and consented to cancellation for the remainder of the term. This lease provided that the defendants should pay all taxes and assessments levied upon the real estate during the term thereof. Presumably, this would mean that they would pay the taxes for every year of their incumbency. If they had occupied the lease until November 1, 1928, as provided therein, they would have been required to pay 21 annual installments of taxes on the real estate. This could have been carried out by excluding the taxes of 1907, payable in 1908, and including the taxes of 1928, pay
Turning now to the second proposition essential to tbe plaintiff, as above stated, Was tbe plaintiff compelled to pay or assume these 1915 taxes as an additional burden, in order to protect tbe rights acquired by it from tbe defendants? Tbe lease of tbe plaintiff, like that of tbe former lease of defendants, provided for the payment of specific monthly installments of rent, and further, for the payment of all taxes and assessments. Tbe latter provision is as follows:
“It is agreed between the parties that tbe lessee shall and will pay all taxes and assessments general and special that may be levied against said real estate herein described during tbe term of tbis lease including any such assessments or taxes that may have been levied and are unpaid for tbe year 1915.”
Tbe defendants are not parties to tbis lease, and have no ’ part either in its benefit or burden. They did clear tbe ground for it by canceling their own lease, but they bad no part in the mutual undertakings. of tbe parties thereto as a contract. It is complete in itself, and for all that appears, its considerations are mutual between the parties thereto. It is the provision above quoted upon which plaintiff predicates its claim to have assumed tbe obligation neglected by the defendants. We are
II. Turning now to the question pertaining to oral evidence of an alleged agreement by the defendants to pay their pro-rata share of the 1915 taxes, we think such oral evidence was admissible. It was not in conflict with any provision of any of the writings produced in evidence. The bill of sale was a mere transfer of title of the personal property, with covenant of warranty. It made no reference whatever to the leasehold interest. It did not purport to transfer it. There were no writings which purport to transfer such remnant of leasehold interest. But by the undisputed evidence, the plaintiff did go into possession of the property and did operate under the defendants’ lease for a period of 16 days. We think it compe
The verdict was directed. Plaintiff’s oral evidence of an agreement to pay the pro-rata share was essential to plaintiff’s recovery in any amount. This evidence was contradicted by the defendants. This conflict of itself forbade the direction of a verdict. If all other obstacles to a submission of the case to a jury were removed, the jury would be confined in its allowance