LaHood v. Wieladt

361 Mich. 99 (1960) 105 N.W.2d 39

LaHOOD
v.
WIELADT.

Docket No. 26, Calendar No. 48,387.

Supreme Court of Michigan.

Decided September 15, 1960. Rehearing denied October 10, 1960.

Albert Green, for plaintiff.

Maurice V. Victor (Meyer Weisenfeld, of counsel), for defendant Teschendorf.

DETHMERS, C.J.

Plaintiff brought suit in the common pleas court of the city of Detroit against the 2 defendants, as partners, for rent under a written lease. Defendants had been partners doing business under the firm name of Belmont Upholstering Company, according to a certificate filed in 1949. In 1952, as such partners, they signed a 5-year lease naming that partnership as lessee and them as the partners. Plaintiff was the lessor. Testimony, which the trial court had a right to and apparently did believe, showed that in 1956 defendants ceased doing business as a partnership, though they filed no certificate of dissolution, and formed a corporation, the Belmont Furniture Company, its registered office being at the address of the leased premises. The lease, containing a 5-year renewal option clause, expired on April 30, 1957. Some time prior to its expiration plaintiff tendered to defendant Teschendorf a new 5-year written lease, at a higher rental, naming the same partnership and partners as lessees. Teschendorf objected to its rent provisions and refused to sign. Plaintiff thereafter went to defendant Wieladt, who did sign. Plaintiff then took the lease to his attorney, who had drafted it, asked if it meant anything with Teschendorf refusing to sign, whereupon the attorney, in plaintiff's presence, struck out from the lease the typewritten names of the partnership and of defendant Teschendorf appearing in the first paragraph and at the place for signatures and the word "partner" following Wieladt's name, leaving only the names of plaintiff as lessor and of defendant Wieladt as lessee in both places, and sent a copy of the lease, so altered, to Wieladt. After the first lease had expired and the term of the new one commenced no apparent change in tenancy occurred. Defendant Teschendorf continued for a number of months to deliver to plaintiff checks for the rent. These checks, as had been true for the previous year, no longer named the partnership "Belmont Upholstering Company" as payor, but, instead, "Belmont Furniture Company," the name of the corporation. Plaintiff testified that he did not remember whether he had been told by defendant Teschendorf, shortly prior to execution of the second lease, that the business was no longer a partnership but a corporation. Teschendorf testified that he had given a form letter to that effect to his office girl for transmission to all creditors.

The rent due under the new lease for the last 2 months of 1957 and the first two of 1958 was left unpaid. Hence this suit. The common pleas court entered judgment therefor in favor of plaintiff against defendant Wieladt, but a judgment of no cause for action as to defendant Teschendorf. Plaintiff appealed to the Wayne circuit court and obtained a reversal as to Teschendorf and remand with directions to enter judgment for plaintiff against both defendants. From that, defendant Teschendorf appeals here.

The appeal to circuit court did not call for trial de novo there but permitted review as in appeals here and reversal only upon a finding that the judgment below was against the clear preponderance of the evidence. CLS 1956, § 728.4 (Stat Ann 1959 Cum Supp § 27.3654); Ladney v. Ternes Steel Co., 359 Mich. 228. We think that it was not and that, therefore, its reversal was error.

True, CL 1948, § 449.9 (Stat Ann 1959 Rev § 20.9), provides that one partner may bind another, but here there is competent testimony, accepted as true by the trial court, and no evidence to the contrary, that there was no partnership when the second lease was signed by Wieladt.

The circuit court, citing Clippinger v. Starr, 130 Mich. 463, held that Teschendorf became estopped to deny that the second lease was a partnership obligation by his monthly payment of the rent after he knew of its existence and the signature by Wieladt. The proofs show, however, that that lease, by its terms, did not purport to be a partnership lease, but one between plaintiff and Wieladt and the rental payments were not out of Teschendorf's or partnership funds, but were payments by the corporation. No such estoppel was, therefore, effected.

It is urged that because the certificate of dissolution of the partnership was not filed and it was not shown that plaintiff had notice thereof plaintiff had a right to rely on Wieladt's apparent authority to bind Teschendorf. The answer is that he did not do so, but, after asking his attorney about it, caused Teschendorf's and the partnership's names to be stricken from the lease and made it to read as between him and Wieladt only.

Plaintiff stresses the holdings in Township of Big Prairie v. Big Prairie Township Grange, 286 Mich. 268, and Bakker v. Fellows, 153 Mich. 428, that, with a lease signed by the lessor, lack of lessee's signature does not affect its validity if he takes possession under its terms. Here its terms make Wieladt lessee and make no reference to Teschendorf. The evidence favorable to him, accepted by the trial court, is that Teschendorf did not possess as a partner or individual tenant, but as an officer or part owner of a corporation which paid the rent. Teschendorf was not liable as a tenant holding over under the first lease, as it had been replaced or succeeded by another between plaintiff and Wieladt. These facts and the existence of the second lease, upon which plaintiff declared and relied, are reasons sufficient for holding Teschendorf not liable under the common counts. Geistert v. Scheffler, 316 Mich. 325; Goldblum v. United Automobile Workers, Ford Local No. 50, 319 Mich. 30.

Judgment in circuit court is reversed and a remand directed to the common pleas court for reinstatement of its judgment for plaintiff against defendant Wieladt and of no cause for action as against defendant Teschendorf, with costs to the latter.

CARR, KELLY, SMITH, BLACK, EDWARDS, KAVANAGH, and SOURIS, JJ., concurred.