Springer v. Borden , 112 Ill. App. 168 ( 1904 )

Mr.. Justice Baker,

delivered the opinion of the court.

The first contention of counsel for appellant is that Borden, the lessor, wrongfully prevented an appraisement of the lot as provided in the lease, and that, therefore, his bill should have been dismissed.

Appellant, alone, appointed John C. McCord to represent him in the appraisement. Appellee protested against this appointment upon the ground that appellant had not the right alone to make such appointment and insisted that .Taylor, the lessee, the trustees, and others interested in the trust deeds , of said premises, and all other persons interested in said leasehold should join in appointing an appraiser. Appellant insisted upon his right alone to appoint an appraiser, and appellee, still insisting upon his protest, within the fifteen days given him by the lease to appoint an appraiser, appointed George Birkoff, Jr. Birkoff suggested to McCord as the third appraiser Wyllys W. Baird, and McCord indicated a willingness to accept Mr. Baird. If turned out that Baird was not the owner of a free-hold in the South Division of Chicago, and, hence, was not one who could be appointed appraiser under the lease. There ivas no further effort on the part either of McCord or Birkoff to secure a third appraiser. In our opinion, the evidence does not show that appellant prevented the appraisement of the lot in the manner provided in the lease by any wrongful act or conduct on his part.

It is next contended that the court erred in excluding evidence of the rents and net income of the buildings on the lot on and before January, 1902. The lease provides that the lot exclusive of the buildings is to be appraised, and we fail to see how evidence of the rent or net income derived from the buildings on the lot could show or tend to show the value of the lot exclusive of the buildings. Moreover, all the witnesses, those called by the lessee as well as those called by the lessor, testified that the buildings on the lot were not suitable or proper for the lot and location, bub wer,e an unsuitable and inadequate improvement of the lot. The evidence excluded could not have aided the court to arrive at a true conclusion as to the value of the lot alone, and was, therefore, properly excluded.

The principal contention of appellant is that the court erred in not taking into consideration the effect of the lease in determining the “ cash value of the demised premises exclusive of the buildings and.improvements thereon.” The witnesses called by the lessor testified that in estimating such value they valued the lot as a piece of vacant ground and did not take into consideration the effect of the lease on the value of the lot. The witnesses called by the lessee testilied that the value qf the lot. exclusive of the buildings, was by reason of the lease from fifteen to thirty-five per cent, less than it would be if the lot were vacant and the lease not in existence.

The decree declares that the court in fixing the value of the demised premises did not take into.consideration the effect of the lease on the value of said premises.

By the lease, Borden demised to Taylor “ lot 3 of block 117” and Taylor promised to pay from January 1, 1892, to January 1, 1922, as yearly rent, five per cent, of the “ cash value of said demised premises exclusive of the buildings and improvements which may be placed thereon.” The words “ demised premises ” in the clause above quoted, refer to and mean “ lot 3 of block 1.17, ” and the construction and meaning of the clause would not be altered or affected by striking out the words “ demised premises ” and inserting in their stead the words “ lot 3 of block 117.” The value of said lot exclusive of buildings and improvements on January 1, 1892, 1902, 1912, and in a certain contingency, January 1, 1922, was, by the provisions of the lease to be determined, not for the purpose of a sale of the. lot, but for the purpose of fixing the yearly rent to be paid for said lot during the next ten years.

If the value of the lot was to be ascertained for the purpose of sale, or of ascertaining for any purpose the value of the interest of the lessor therein, then the fact that it was leased for a long term, and the purchaser could not obtain possession until the end of the term, as well the provisions of the lease in relation to the purchase by the lessor or his grantee of the buildings at the end of the term, would properly be taken into consideration. But in the case before us the whole purpose of the indenture was the lease of the lot and thereby to secure to the lessee the right of possession of the lot, and to the lessor the payment of ground rent.

It was the lot which was leased and it was the lot which was to be appraised. The existence of the lease or its terms and conditions may affect favorably or unfavorably the value of the rights and interest of the lessor in the lot, but they can not affect-the value of the lot itself.

In determining the value of the lot for the purposes stated in the lease, it is clear that the cash value of the lot contemplated by the covenants of the lease was the cash value of a fee simple estate in said lot; the cash value of every interest in and right to said lot, considered for the purpose of such valuation as vacant property. But three cases involving directly the same question we are now considering have been brought to our attention, and the decision in each of the .cases supports the conclusions to which we have arrived. The cases' referred to are Philadelphia Library Co. v. Beaumont, 39 Penn. S. 43; Lowe v. Brown, 220 Ohio S. 463; Goddard v. King, 40 Minn. 164. In Lowe v. Brown the Supreme Court of Ohio said: “ Ground was leased, and the annual rent for twenty years was agreed upon. But contemplating future changes in the value of the ground, the per cent, on such value was agreed upon; but the ‘ true value ’ of the ‘ ground ’ was left to be determined at the expiration of each successive term of twenty years. It could not be foreseen what might in the future affect the value of the ground; nevertheless, whatever might occur, it was stipulated that the ‘ true value’. of the ‘ground, ’ whatever, in fact, it might be at the expiration of each period of twenty years, should be the basis of the annual rent in future years. To arrive at this basis, appraisers were ‘to view the ground’ and ‘ appraise the same at its true value.’ It is clear from this language that the true value contemplated by the covenants of the lease as the basis of the amount of rent, was the fee simple value of the ground alone, without reference to the purpose for which it was leased, or the character of the improvements thereon. Phila. Lib. Co. v. Beaumont, 39 Penn. 43. The whole purpose of the indenture was the lease of ground on the one part, and to secure the payment of ground rent on the other. The ground leased was, in fact, alone the basis of the rent; and its true value was to determine the amount to be paid at a fixed per cent, thereon. It was ground that was leased, and ground only was to be appraised. No matter what might be the improvements on the ground, or the rental value of the premises, still the appraisement was to be confined to the true value of the ground. This is what was done, and we regard it to be in accordance with the true construction of the lease.”

In Goddard v. King the Supreme Court of Minnesota said: “ The fact that under the lease the defendant might use the land for a particular purpose, or that he was restricted by it to a particular use, and the fact that plaintiffs had given the defendant a long lease of the land, had nothing whatever to do with its value as between them under the lease, for the valuation was not to be made for the purpose of a sale of the land, thus encumbered, by one to the other. The referees ought to have estimated the market value of the land as it would have been with the lease and improvements made by the lessee off.”

Appellant further contends that the value of the lot as fixed by the court, $450,000 or $5,000 per front foot, was too high. Three of appellee’s witnesses testified that the value of the lot was $5,500 per foot, one that it was $6,000 per foot. Eight witnesses testified for appellant that the value of the lot, without considering the lease, was $4,000 per foot, one that it was $3,500, and one that it was $4,100. We have carefully considered the testimony of these witnesses, their experience and qualifications as stated by them, the reasons given by each for the opinion he expressed, and the other evidence touching the value of said lot, and we cannot say that upon the evidence, the court erred in its conclusions as to the value of the lot.

If any evidence was admitted which was improper, we must presume that it was not considered by the court in arriving at its final decision.

The decree of the Superior Court will be affirmed.

Affirmed.