Andrus v. Dyckman Hotel Co. , 1914 Minn. LEXIS 664 ( 1914 )

Philip E. Brown, J.

Plaintiff brought two actions, one against the Dyclnnan Hotel Co., of Minneapolis to recover for rent and taxes paid under a written lease dated May 1, 1909, of the hotel property, to defendant Collins and by him assigned to the hotel company; the other against. tbe same defendant and Collins and wife to enforce specific performance of a covenant by the lessee, contained in tbe same lease, to assign to plaintiff another lease, made to Collins, of property adjoining; tbe hotel and controlling its light and air. After consolidation and-trial to tbe court by consent, it found for plaintiff in a sum exceeding $100,000, and also directed specific performance. Defendants^appealed from tbe judgment on January 15, 1914.

There was no dispute as to tbe leasing, tbe accrual and nonpayment, in money, of rents and taxes in accordance with tbe terms of tbe lease sued on, or that tbe latter contained a covenant, in terms, to assign tbe other lease. Tbe defenses interposed in tbe answer in tbe first action were, in substance: (1) That a material inducement for tbe execution of tbe lease consisted in plaintiff’s fraudulent representation that arrangements bad been made whereby liquors could 'be sold in connection with tbe hotel by means of a tunnel under the street to a bar on tbe other side, within tbe saloon limits, tbe hotel itself being without; that defendant was thereby induced to pay a very large rental, and tbe failure, through plaintiff’s fault, to obtain-such bar resulted in a partial failure of tbe consideration for tbe lease, aggregating $81,000, which defendant sought to counterclaim; (2) that prior to tbe leasing plaintiff orally guaranteed tbe cost of tbe hotel would not exceed a certain sum, it being agreed that the actual cost, not exceeding such amount, should be accepted as tbe basis for computation of rent, whereas in fact a much larger sum, exceeding the actual cost, was fraudulently inserted in tbe lease, thereby increasing the rentals actually paid, thus entitling defendant to damages, also counterclaimed; (3) that tbe lease did not conform to tbe previous oral agreements of the parties in regard thereto, audits execution was induced by undue influence and plaintiff’s fraudulent representations that it was in accordance with such agreements. In tbe second case the answer contained substantially tbe same averments ¿nd, in addition, that no agreement to assign tbe other lease-was ever made, tbe covenant to such effect in the lease sued on having-been fraudulently inserted, as well as a provision mortgaging the chattels in the hotel to plaintiff.

Tbe court found, on June 27, 1913, tbe lease to be a legal and. binding obligation, entered into without fraud, undue influence or improper conduct on plaintiff’s part, resolved the issues in accordance with plaintiff’s claims, denied defendant relief, and ordered judgment as above stated. On July 14, 1913, the court denied defendant’s motion to amend the findings so as to show that the lease was tainted with illegality because it contemplated sales of intoxicating liquors in the hotel during the term, and for a new trial, :and also to extend a stay of proceedings theretofore granted, and to üx the amount of a supersedeas bond on appeal. On July 16 thereafter judgment was entered in accordance with the findings. Subsequently, on July 24, defendants moved for leave to interpose a supplemental answer and cross-bill, and for an injunction to restrain the running of notices given to terminate the lease, proceedings under execution issued on the judgment, and conversion of the name and good will of the hotel, until the proceedings taken upon this supplemental answer and cross-bill were finally determined, and also for a new trial upon the issues made thereby and upon all the issues in the cause “as they will stand when the complete issues are made up.”' This application was denied in toio on July 28, and defendants appealed from the order. Later defendants appealed from an order, of date January 14, 1914, denying their application made January 10, 1914, for leave to amend and supplement the answer and cross-bill by setting up in both actions an agreement, of date December, 1912, by plaintiff with one Tremain to make a lease of the hotel property to the latter and a sale of its furniture and equipment to him — being the same property covered by the chattel mortgage clause of the lease sued on — for over $106,000, and seeking to lhave such amount applied as against plaintiff’s claims, if any, for ■rent and taxes, and also for a new trial upon the issues made by :such amended and supplemental pleadings, and for the opening and 'vacating of the judgment theretofore rendered.

Defendants, by various assignments of error, in effect, challenge :the action of the court in refusing to find and to hold the lease void •for contemplated violations of our liquor laws; in failing to reduce the rent because of the loss of a liquor sale privilege; in refusing to ¡allow defendants to show plaintiff’s sale, to Tremain, of the hotel furniture and fixtures covered by tbe mortgage in tbe lease, and that such sale paid the rent theretofore justly accruing; in finding any' amount due plaintiff; in granting specific performance of the covenant to assign the other lease; in denying the several applications to* amend and supplement their pleadings and for injunction, and in making the several orders appealed from.

1. As to the claim of the lease being illegal, no such defense was interposed. Hence on the pleadings the case 'is within the rule that, where illegality of contract is relied on, but does not appear from the complaint, a state of facts must be pleaded in the answer-showing that n© recovery can be had. Woodbridge v. Sellwood, 65 Minn. 135, 67 N. W. 799; Dodge v. McMahan, 61 Minn. 175, 63; N. W. 487; Van Dusen-Harrington Co. v. Jungeblut, 75 Minn. 298, 77 N. W. 970, 74 Am. St. 463. Not only do the answers fail to allege such matter, but, on the theory of a valid subsisting contractual relation between the parties, they assert an affirmative claim for damages by way of reduction of the amount of the rentals because saloon privileges on the opposite side of the street were not furnished pursuant to an oral understanding of the parties in that regard. This claim of taint seems first to have been raised after close of the testimony (see paper book, page 978). The court then denied defendants’ application to dismiss on this ground, and also-one to amend the answers by incorporating such defense, neither of which rulings are assigned as error. However, the court did not err in refusing to find the “facts as to the claimed illegality of the contract; for the general rule that findings, if duly demanded, must be made upon matters in issue or litigated by consent (Turner v. Fryberger, 99 Minn. 236, 239, 107 N. W. 1133, 108 N. W. 1118, 109 N. W. 229; First Nat. Bank of Boston v. Towle, 118 Minn. 514, 522, 137 N. W. 291) is inapplicable to the questions claimed to-have been so litigated, unless it appears very clearly that the parties did in fact, and without objection, litigate the issue not pleaded as. though it had been properly raised. Prima facie the issues to be-tried are those made by the pleadings, and consent to try others cannot be inferred merely from the fact that evidence pertinent thereto was received without objection, if such was also pertinent to other issues formally made. 2 Dunnell, Minn. Dig. § 7675. Otherwise' surprise and injustice would result. The court might well have been of opinion that the evidence offered should be considered as relating to defendants’ counterclaim for diminution of rent on account of the alleged failure to furnish the hotel with a bar within the saloon limits.

2. We are next brought to a consideration of the sufficiency of the evidence to sustain the findings. The record, containing over 1,000 pages of evidence, has been examined. As said by Mr. Chief Justice Start in Wunder v. Turner, 120 Minn. 13, 16, 138 N. W. 770, 771, referring to the voluminous testimony there brought up for consideration, its bulk “makes this case a proper one for the application of the rule that it is not the duty of an appellate court to demonstrate, by a review of the evidence, the correctness of the findings of fact by the trial court.” See also Carver v. Bagley, 79 Minn. 114, 81 N. W. 757. We hold the evidence sustains the findings.

3. There was no error in refusing to allow defendants to show that plaintiff had sold the furniture and fixtures covered by the mortgage in the lease for more than $106,000. If defendants had so proved, in no event would it have amounted to a payment on the rent, but at most would have constituted a mere counterclaim or offset. “There is no such thing as setting up one right of action in bar to another right of action.” Cooper v. Simpson, 41 Minn. 46, 48, 42 N. W. 601, 4 L.R.A. 194, 16 Am. St. 667. Moreover, this and all applications to amend and supplement the pleadings and for other relief, except new trial, specified in the several motions made subsequently to the order for and also the entry of judgment appealed to the discretion of the trial court, and we find no abuse in its determinations.

Judgment and orders affirmed.