156 Wis. 96 | Wis. | 1914
The appellants insist that the judgment is erroneous for the following reasons: (1) No liability upon the covenants of the lease was ever imposed on the defendants. (2) If any such liability was imposed, it ceased when the lease was assigned to the Wonderland Amusement Oompany. (3) The lessors exercised their choice between two inconsistent remedies, by electing to hold only the International Oonstruction Oompany and its stockholders. (4) The lessors by their acts and conduct have estopped themselves from claiming any liability against the defendants. (5) By their acts and declarations the lessors have waived any claim against the defendants. (6) This action is a collateral attack on a final order of the court in the receivership proceedings, and therefore cannot be maintained. (7) The court erred in receiving certain testimony. (8) The court erred in rejecting certain evidence offered.- (9) The court should have submitted to the jury the questions: (a) Did defendants surrender possession of the premises to plaintiffs, and, if so, when? (b) Was there a re-entry by the plaintiffs, and the date thereof ?
No claim is made that there was any other jury question in the case.
1, 2, and 6. The first, second, and sixth questions will be treated together. The order directing the receiver to sell the leasehold interest and other property of the International Construction Company provided in substance that upon the sale being made and confirmed the purchaser should execute a contract assuming the obligations of the lease and agreeing to pay the rent reserved therein. The provision was inserted in the order because the lessors’ attorneys insisted that it should be. The notice of sale recited that the "interest and liability as lessee'” of the Construction Oompany. would be sold. The plan (of certain stockholders of the Construction Company
But it is argued that the lessors refused to consent to the sale or transfer of the lease to Luehring and refused to recognize the validity of such transfer, and therefore the obligation to assume liability for the rent did not become effective.
There are two answers to this contention. In the first place it was not essential that the lessors should give such assent, and in the second place the evidence fails to show that they withheld it.
By its terms this lease was not assignable without the consent of the lessors in writing, and this no doubt was the reason why the order of sale provided for consent on the part of -the lessors. But, notwithstanding this provision in the lease, it was assignable by operation of law whether the lessors gave their consent or not. See 18 Am. & Eng. Ency. of Law (2'd ed.) 661, where many of the cases so holding are collected.
If the lessors thought they could prevent the purchaser at the sale from taking the benefit of his purchase by refusing assent thereto, they were simply mistaken as to what their legal rights were. If the purchaser desired to avail himself of such benefit it was his duty to do the things which he was required to do, regardless of the attitude of the other party, and so long as he did them his rights would be protected regardless of the position taken by the lessors. The law settled the rights and obligations of the parties, and protests on the part of either party would not be of much avail. The lessors might protest against the validity of the assignment, but so long as the assignees took possession of and used what they bought, such protestations did not change the legal status of the parties.
In the next’ place, we hardly think that there was more than a mere scintilla of evidence to show that the lessors wotild re
It is undisputed that the lessors were in consultation with an able attorney and that it was at his suggestion that the order of sale was so worded that the purchaser thereat would become bound by the covenants of the lease. One of the lessors appeared at the sale and stated in substance that he had no objection thereto, but would do nothing that would jeopardize a claim they were making against the stockholders of the International'Construction Company. It has not been, suggested that such consent could affect such claim, and we fail to see how it could. The persons who would become liable beyond any question for future rent, if the agreement provided for in the order of sale was carried out, were the very persons whom Zwietusch desired to hold on their stockholders’ liability because they were solvent and able to pay, although the evidence does not show that Zwietusch was aware that any one except Luehring would be liable. There was every reason why the lessors should, after they had time to ascertain what their legal rights were, consent to the transfer by the receiver which was so manifestly to their advantage, and no conceivable reason why they should not, or why they should reject the provisions inserted in the order of sale for their benefit and because their attorneys insisted on it. Mr. Zwie-tusch died before this action was commenced, and we have no line on his mental caliber, further than that the lease was carefully prepared to conserve and protect the rights of the lessors and that they employed attorneys to advise them when the Construction Company stranded. How the only evidence tending to show that the lessors would not assent to a contract such as that provided for in the order of sale is that given by Mr. Durant, in which he undertook to detail some conversa
It is not claimed that Luehring’s codefendants, except Kann, were not bound under their contract with him for the obligations which he assumed in purchasing the lease. It is clear that they were. Kirschbon v. Bonzel, 67 Wis. 178, 29 N. W. 907; Woolsey v. Henke, 125 Wis. 134, 103 N. W. 267; Hodges v. Nalty, 104 Wis. 464, 80 N. W. 726; Northern Nat. Bank v. Lewis, 78 Wis. 475, 47 N. W. 834.
We think that Luehring and his associates became obligated to perform the covenants of the lease under the transfer to them, by operation of law. Such being the case, the subsequent assignment of it to the Wonderland Amusement Company did not relieve them of the obligation to pay rent accru
Construing the order of confirmation as we do, there is no merit in the contention that this action is a collateral attack ■on a final order of the court.
3. There was no election between inconsistent remedies by the lessors. The remedy against the stockholders of the Construction Company was not inconsistent with holding subsequent assignees or purchasers of the lease. Every transfer made in the manner provided for by the lease furnished added security for the rent still to become due, and released none of those already Hable.
4. Neither was there any estoppel in pais. The record fails to show that the lessors ever did any act or thing which misled the defendants or induced them to do anything to their disadvantage which they would not otherwise have done. A change of position by one in reliance upon the conduct of another is essential to create an estoppel in pais. Somers v. Germania Nat. Bank, 152 Wis. 210, 219, 138 N. W. 713; Ady v. Barnett, 142 Wis. 18, 23, 124 N. W. 1061; Mabie v. Matteson, 17 Wis. 1, 12; Norton v. Kearney, 10 Wis. 443; Chynoweth v. Tenney, 10 Wis. 397; Racine Co. Bank v. Lathrop, 12 Wis. 466.
5. The question of waiver is perhaps the one on which the most stress was laid, aside from that first discussed. It is .about as difficult to lay down any hard-and-fast rule as to what constitutes waiver as it is in reference to what constitutes negligence. We have definitions of both terms, but it is often
The matters relied on to show waiver are the following: (1) Statements made by Oscar B. Zwietusch at the time of the receiver’s sale and thereafter, to the effect that he would not consent to any assignment or transfer of the lease that would jeopardize his claim against the stockholders of the International Construction'Company. (2) Insistence by Zwie-tusch that receipts evidencing payments of rent after the receiver’s sale run to the International Construction Company. (3) Refusal by the lessors to file a claim for rent against the Wonderland Amusement Company after it became bankrupt. (4) An answer filed by the lessors in the receivership proceedings arising out of the failure of the Wonderland Amusement Company, in which it was stated that George F. Luehring did not comply with the terms of the order of sale by accepting the lease in the manner therein provided, and that he did
This looks like a rather formidable list, and at first blush it might be thought that an inference of waiver might be drawn from the facts and that the jury was the proper party to draw such inference if it saw fit, although the parties to the action apparently did not desire to have the question submitted. We might discuss the evidence in detail pertaining •to these various questions and show that none of them had much force, and most of them none whatever. There is one vital proposition that extends to all of them in so far as they tend to show waiver: We are unable to find any evidence in the record tending to show that the lessors or their predecessors in title, prior to the time this action was commenced, knew of the agreement under which Luehring*s codefendants, except. Harm, were in fact parties to the purchase at the receiver’s sale and would be liable for the rent reserved in- the
The right acquired by the lessors under the sale and transfer of the receiver was a valuable one. , By virtue of it solvent
7. It is urged that the court erred in admitting evidence (a) tending to show the negotiations between the defendants which led up to the purchase made by. Luehring at the receiver’s sale; (b) tending to show the formation of the Wonderland Amusement Company and the assignment and transfer to it by Luehring of the property bought at the receiver’s sale and its subsequent use of the property; and (c) in receiving in evidence the proceedings had in the case of Scholl v. International Construction Company, and particularly the order of sale made therein.
The evidence was competent. The most important facts that it tended to show, namely, that Luehring acted as the agent and representative of the other defendants, except Kann, in making the purchase and subsequent transfer, and that they were liable for any obligation which he assumed in making the purchase, are practically admitted by the pleadings. It was proper to get the whole transaction before the court and jury. The evidence does not show that there was anything meretricious about the arrangement of the defendants to secure the property and finance and carry on the undertaking. But the carrying out of a reorganization scheme may bring on unanticipated troubles, as will be seen by a reference to Northern Pac. R. Co. v. Boyd, 228 U. S. 482, 33 Sup. Ct. 554.
8. There are a number of errors assigned on the exclusion of evidence which have been considered and which need not be treated in detail. The most important arise out of the refusal of the court to permit the witness Luehring to testify
(a) The first class of questions were, we think, properly excluded under sec. 4069, Stats. Luehring, it is true, testified that he was not a stockholder in the International Construction Company and that he was simply representing the Hilty Lumber Company, a corporation of which he was secretary, which company held stock in the International Construction Company. It is none the less true that he was apparently the most active of those who formulated and carried out the reorganization plan. It is also true that as a stockholder in the Ililty Lumber Company he would have to share in its losses, and that when the agreement of November 19, 1907, was entered into he signed the same, representing that he was the owner of ten shares of the capital stock of the International Construction Company, and further, that he was elected secretary and treasurer of the Wonderland Amusement Company. The witness is here a party to the action, which was not the case in Hanf v. Northwestern M. A. Asso. 76 Wis. 450, 452, 45 N. W. 315, or Laack v. Runge, 104 Wis. 59, 60, 80 N. W. 61, and we do not think it can be said that he is a mere nominal party, because he has a financial interest in the controversy. It would also seem that if he were only a mere agent of his codefendants, having purchased the lease in his own name and transferred it pursuant to their direction, he is a person through or under whom the persons offering his testimony derive their title or sustain their liability within the meaning of sec. 4069.
(b) There was no prejudicial error in refusing to permit Luehring to testify to the declaration made by Zwietusch at the time of the sale, if there was any error in doing so. This declaration was proven by two other witnesses called by
(c) Luehring testified that he was advised by his attorney during the fall of 1907 that it was-necessary to determine the relations that would exist between the lessors and himself and the other defendants or any other person who might take over the park, and that he had a conference in reference to this matter with Mr. IToyt and Mr. Zwietusch. He was then asked to relate the conversation had with Mr. Hoyt. Objection was made and sustained to this as incompetent and irrelevant and as coming within the statute. This ruling is said to be proper under the decision of this court in Holway v. Sanborn, 145 Wis. 151, 130 N. W. 95. That case does not so decide. It involved the question of whether, where the deceased and another carried on a conversation in the presence of a third party who did not participate therein, such third party might testify to what the deceased said. Here the question called for what Mr. Hoyt said, and he was very much alive at the time of the trial.. Mr. Hoyt’s statement made in the presence of his client would not cut much figure if it was not concurred in by the client, and this fact could not be shown. We are not advised what it was intended to show by the witness, and it is not apparent how it could affect the liability assumed long thereafter by .reason of the purchase at the receiver’s sale. Under sec. 3072m, Stats., we may not reverse for error unless it affirmatively appears that the error not only harmed the appellants, but harmed them so materially that the result might probably have been different had the error not occurred. Koepp v. Nat. E. & S. Co. 151 Wis. 302, 139 N. W. 179; Adams v. Bucyrus Co. 155 Wis. 70, 143 N. W. 1027. There is no such showing of prejudicial error here.
(d) Any conversation which Mr. Durant had with the late Judge TaeeaNt in reference to the order of confirmation
9. On November 15, 1909, tbe plaintiffs leased tbe premises in question, or part of them, to one Mrs. Hopkins and her associates. It is argued that an actual surrender of possession by tbe lessee and tbe leasing of tbe premises by tbe lessors to a third party amount to a surrender of tbe lease and a re-entry by tbe lessors, and that if this result did not follow as a matter of law, tbe evidence at least presented suf•ficient facts to warrant a jury in finding a voluntary surrender and acceptance thereof and a re-entry by tbe lessors. This question affects to some extent tbe amount of damages recoverable in this action. We think tbe trial court was right in tbe conclusion which it reached. Manifestly it was for tbe advantage of tbe defendants that this lease be made, as their grantee bad become insolvent and bad abandoned tbe premises, and any amount received for rent would mitigate tbe damages that might otherwise be recoverable. Before this lease was made, tbe matter of making it was submitted to tbe defendants, and a written agreement wTas entered into between them and tbe lessors, in which tbe defendants agreed that tbe lessors might lease tbe land in question at an annual rental of at least $2,000, and in which they further agreed that tbe making of such lease should not “prejudice or affect in any way the rights or claims of tbe lessors against any of the parties liable upon or under said original lease,” if any liability existed thereunder. This agreement recited that tbe signers were stockholders in the International Construction Company. But they were the defendants in this action and expressly agreed that tbe making of tbe lease should not prejudice the rights of the lessors against any of the parties who
It is also claimed tbat it should be held that there was a re-entry by virtue of tbe option which was given to tbe city of Milwaukee to purchase tbe premises in 1911. Tbe nature of tbis option is set forth in tbe statement of facts. Tbe option was never accepted and never became a binding contract to sell, and we do not think tbe evidence would warrant a jury in finding tbat tbe giving of it constituted a re-entry so as to relieve tbe defendants from tbe further payment of tbe rent.
By the Oourt. — Judgment affirmed.'
A motion by tbe appellants for- a rehearing was denied, with $25 costs, on February 24, 1914. .