Northwestern Loan & Trust Co. v. Topp Oil & Supply Co. , 211 Wis. 489 ( 1933 )

Fowler, J.

There can be no question that the building and equipment were so attached to and so used in the operation of the business conducted on the premises as to become a part of the realty. Gunderson v. Swarthout, 104 Wis. 186, 80 N. W. 465; State ex rel. Gisholt M. Co. v. Norsman, 168 Wis. 442, 169 N. W. 429; Anglo American M. Co. v. Wisconsin Hydro-Elec. Co. 189 Wis. 120, 207 N. W. 276; Thomsen v. Cullen, 196 Wis. 581, 219 N. W. 439; Fuller-Warren Co. v. Flarter, 110 Wis. 80, 85 N. W. 698. Being a part of the realty, they belong to the owner of the fee, unless there be a rule of law applicable between landlord and tenant under the facts of the case that vests the property therein in the lessee.

The appellant bases its claim of ownership upon the rule quoted from State ex rel. Hansen S. Co. v. Bodden, 166 Wis. 219, 221, 164 N. W. 1009:

“In the absence of express stipulation to the contrary the general rule is that improvements made by a tenant on demised premises in furtherance of the purposes of the lease may be removed by him before or at the expiration of the term, provided he leaves the premises in as good condition as he received them.”

We recognize this as a correct statement of the law. It is to be noted, however, that it is a general rule, and a general rule is subject to exceptions where special circumstances render its application inequitable and unjust. It is to be noted also that to render the rule applicable the lessee must leave the premises in as good condition as they were when he received them. The reason for the proviso is that the lessor shall receive the premises back in the same condition that they were in when he executed the lease. When this lease was executed a dwelling house was on the premises, which the lessor was required by the terms of the lease to remove, and which she did remove at an expense of $650. To restore the premises to the condition which they were in when the lease was executed the dwelling house would have to be moved back, at a presumptive expense of at least $650 more, the trees and shrubbery and lawn would have to be replaced at an additional expense, the amount of which does not appear. It is true that when the lessee actually took possession of the premises there was no dwelling house upon it, but to allow the lessee the benefit of the rule as strictly stated would ignore the reason of the rule entirely, and when the reason of a rule does not apply neither does the rule. Moreover, it does not appear that it is possible to restore the lessor to the position she was in when the lease was executed. Arrangements may have been and doubtless were made that cannot be unmade, and the lessee is not offering and claims it is not obliged to unscramble the lessor’s eggs. The finding of the trial judge that removing the improvements would work irreparable injury to the plaintiff is justified. Under the circumstances involved we must hold that the general rule as stated is not applicable to the instant case.

The appellant' claims that Shields v. Hansen, 201 Wis. 349, 230 N. W. 51, rules the instant case. To this we cannot agree. While the improvement which the defendant in that case was permitted to remove was made for the same purpose as the one involved herein, the instant case is clearly distinguishable in that the leased premises there involved were vacant; it was not a valuable leasehold; the original lease was oral and the parties agreed that the defendant might remove the improvement on its termination; the lessor did not pay the taxes on the improvement; on removal of the building and concrete slab, “refilling the excavations” left the premises “in the identical condition that they were in when they were leased” (p. 352) ; the building was of wood covered with stucco, bolted onto a concrete slab, without basement, and was built with especial view to its removal ; the lease was a short-term lease, originally oral, and after four years’ occupation under it was put in writing for three years at increased rental. Every case must stand on its own facts. The facts here involved are widely different, as appears from the statement thereof preceding the opinion.

The case of Dougan v. H. J. Grell Co. 174 Wis. 17, 182 N. W. 350, is also relied on by the appellant. It may also be distinguished by its facts. Two leases were involved. The one of them the more nearly approaching the instant case in its facts leased for ninety-nine years a strip of farm land forty by one hundred ninety-five feet at a nominal annual rental of five dollars. The premises were to be used for no other purposes than operating a cheese and butter factory and the lease granted “the privilege of erecting buildings thereon” suitable for the purpose. The buildings erected were assessed as personal property and the lessee paid the taxes. An injunction against removal was denied. The facts herein are sufficiently different in our view to warrant a different judgment.

It may be said further in support of the judgment below that the terms of the lease warrant the construction that as part of the consideration therefor the lessee agreed to construct a filling station on the leased premises. While the language is that the lessee “may construct its filling station,” it also states that the filling station “shall be completed not later than” a specified date. Counsel argue that the word “its” indicates that the building was to belong to the defendant and that this would give the defendant the right of removal, and that the word “may” indicates that the defendant was under no obligation to build. But these words are no more forceful to this effect than are the words “shall be completed” to indicate the contrary. The lease was drawn by the lessee, and if ambiguous, as we think it is, that construction should be given that is most favorable to the lessor. Milwaukee Corrugating Co. v. Krueger, 184 Wis. 139, 151, 198 N. W. 394. It is highly improbable that the lessor, in executing a lease subject to termination in five years, would have agreed to remove the dwelling house unless the lessee would construct a valuable and substantial improvement to take and remain in its place. If the improvements were removed the consideration for the execution of the lease would in part fail. It is to be noted that the expressed consideration for the lease was not the payment of rents, but one dollar, which leaves the matter of consideration open to inquiry and determination. It seems quite apparent that the lessor understood that the improvements were to remain. Her intent in that respect seems clear. The trial court found that the intention of the parties was “that the improvements covenanted to be erected” on the premises and which were erected thereon “were to be and become a part of the realty.” This implies that they should so remain. The lease in view of its terms and all the circumstances is open to that construction.

We are of opinion that the court’s disposition of the case was correct. As the lessor’s grantee has right to retention of the improvements, we see no reason to discuss the rights of the plaintiff mortgagee.

By the Court. — The judgment of the circuit court is affirmed.