Case Name: Colclough, Respondent, vs. Carpeles, Appellant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1895-01-08
Citations: 89 Wis. 239
Docket Number: 
Parties: Colclough, Respondent, vs. Carpeles, Appellant.
Judges: 
Reporter: Wisconsin Reports
Volume: 89
Pages: 239–249

Head Matter:
Colclough, Respondent, vs. Carpeles, Appellant.
December 20, 1894
January 8, 1895.
Landlord and tenant: Lease or agreement for lease? Agreement to erect 'building: Compliance with specifications.
1. A written agreement provided that the plaintiff “hereby lets, demises, and leases unto ’’"the defendant the premises described, “to have and to hold the same for the term ending ” at a date named, at a specified annual rental payable in monthly instalments on the 15th day of each month, “ said rental to begin when the building herein described shall be ready for occupancy.” Plaintiff agreed therein to commence the erection of a factory building on the premises, and to complete it ready for occupancy on or before a certain date, according to plans and specifications made a part of the contract, unless prevented by causes beyond his control. The agreement contained also the usual formal stipulations of a lease.
Held, that it was a valid lease in prcesenti for a term to commence in futuro, the element of certainty in the commencement of the term being satisfied by the completion of the building at’ the time agreed.
2. In an action upon such agreement to recover rent from defendant, who had refused to accept the building, it would be a defense to show that there had not been a substantial compliance with the specifications, or that the walls, in respect to which there were no specifications, had not been constructed in a reasonably safe and workmanlike manner or of reasonably safe and proper materials for the known purposes for which the building was to be used, without showing that at the time the premises were tendered to defendant the building was entirely unsafe, or that defects then existing, by reason of the' xfiaintiff’s failure to substantially perform his contract, whether open or latent, and since developed, in whole or in part, had rendered it absolutely unsafe or in danger of tumbling down, or that it was actually unsafe.
Appeal from a judgment of the circuit court for Milwaukee county: D. H. JohNsoh, Circuit Judge.
Reversed.
This is an action upon a certain instrument claimed to be a lease, to recover two monthly instalments of rent alleged to have become due thereon for the months ending the 15th of March and loth of April, 1892, and remaining unpaid, as and for rent for the factory building described in the written agreement made an exhibit to the complaint. The answer of the defendant, was, in substance, a general denial.
The material parts of the agreement, dated October 12, 1891, are that the 'plaintiff “hereby lets, demises, and leases unto the said party of the second part” (the defendant) the premises therein described, “ to have and to hold the same for a term ending the 1st day of January, 1902, at an annual rental of $4,300, payable in equal monthly instalments of $358.33 each, on the 15th day of each and every month; said rental to begin when the building hereinafter described shall be ready for occupancy, and the first payment at such rate is to be made on the 15th day after the completion of said building so that it shall be ready for occupancy, and thereafter on the 15th day of each month.” The plaintiff agreed that he would at once commence the erection of a «factory building upon said premises, and complete the same so that it would be ready for occupancy on or before the 1st ■day of March, A. D. 1892, according to the plans and specifications referred to and made a. part of the contract, unless the completion of the building at that time should be prevented by causes beyond his control, exercising reasonable •care and diligence. The building was to' be a four-story ■and basemént brick building of specified dimensions, the defendant agreeing that he would “pay the said rent at the times stated during the continuance of said term, and to quit and deliver up the same to the lessor or his attorney peaceably and quietly at the end of said term,” unless he purchased the same in the meantime, as therein provided; -and that if he should “fail to pay the rent aforesaid at any of the times expressed in this lease, or shall underlease said premises, or any part thereof, or assign this lease without the consent of the lessor in writing, or shall fail to keep and ■observe any of the covenants herein contained, on his part, then the lessor may expel the said lessee from said premises forthwith;” and, in case of the total destruction of the building by accidental fire, “ this lease, and the rights of the said party of the second part hereunder, shall thereupon cease and determine; ” and a conditional cessation of rent in case the building should during the term of the lease be accidentally damaged by fire, and not totally destroyed, was provided for.
It was objected to this instrument that it was not a lease, but an agreement for a lease; and also to any evidence being-received under the complaint, as not stating a cause of action. It appeared that there had been a building on the premises in question which had been partially destroyed by fire, and the agreement contemplated a rebuilding for factory purposes, and the plans and specifications annexed to the contract were put in evidence. As the building approached completion, the defendant objected to the manner in which the building was being constructed, claiming that no insurance could be obtained on it, by reason of improper construction; and at bis request three practical builders-made an examination of it, and a written report to the defendant as to its condition, to the effect that certain work, therein specified should be completed, and that, if such “ defects are mended,” they considered the building safe enough for his business; and the inspector of buildings of the city of Milwaukee had, on the 12th of February, certified that-he did not consider the building safe to be used for factory-purposes, for the reason that new walls were erected upon: old ones which had been damaged by fire and water, and that the walls could not withstand a constant vibration and jarring, if the building was used for factory purposes. Evidence was given tending to show that the plaintiff agreed, to make the changes suggested, and that the defendant-agreed that if the same were so made he would accept the-building, but he denied any such agreement on his part.
The evidence tended to show that the building ivas completed, exactly as the committee of builders had recommended, by the 1st day of March, 1892. On that day the-plaintiff tendered possession of the building as having been completed according to the contract. Said builders had' again examined the premises, and reported to the defendant, March 18, 1892, to the effect that all the changes recommended by them had been made, and that in their opinion the building was perfectly safe for defendant’s trunk factory. Subsequently the defendant pointed out deficiencies as still existing in the building, and declined to accept it with such-defects. On the 20th of April, 1892, H. C. Koch & Co., architects, certified to an examination of the building, with the plans and specifications, and that it was complete in all respects as originally intended and contemplated. A large amount of testimony was introduced, tending to show the building was not completed according to the agreement, plans, and specifications, and that there was a crack between the division and party wall extending to three feet above; the second floor, then branching off on the division wall at an angle, and extending up to just under the roof, which appeared before March, 1892. A building expert, a witness for the plaintiff, testified to the condition of this crack upon an examination of the building made as late as September, 1893, in substance, that the defect could be remedied by running a rod on each side of the wall through the building, with washers on both sides of the wall outside, and that any immediate danger to the building could be overcome in that way, and the building made safe. The defendant never entered into possession of the premises, and refused to pay any rent.
The jury found a verdict for the plaintiff for $788.82, and, a motion for a new trial having been overruled, plaintiff had judgment thereon, from which the defendant appealed.
Eor the appellant there was a brief by Winleler, Flanders, Smith, Bottwm dé Vilas, and oral argument by J. G. Flanders.
They contended, inter alia, that the instrument described in the complaint is a mere executory agreement on the part of defendant to enter into a lease of the premises described when certain precedent conditions have been performed by plaintiff. Addison, Contracts (Morgan’s ed.), § 676; Taylor, Landl.-& T. § 39. The term for which the alleged lease should be in force was not to commence until the factory should be completed according to the plans and specifications mentioned therein, and ready for occupancy by defendant. Wright v. Tr&oeza/nt, 3 Carr. & P. 441. Considering the instrument as a lease, it is invalid for the reason that although rent is reserved there is no certain túne expressed when it shall commence, nor is it made contingent upon the happening of any certain event. 4 Wait, Act. & Def. 200, 201; Wood, Landl. & T. (1st ed.), § 184; Pearson v. Pies, 8 Ring. 181; Taylor, Landl. & T. § 70. It appearing from the proper construction of the instrument in question as a whole, that the term mentioned therein is to commence when the rental commences, viz: when the building specified is completed and ready for occupancy, and the time when it should commence being uncertain and not determinable, the instrument as a lease is void for uncertainty. Wood, Landl. & T. § 184; Begnart v. Porter, '7 Bing. 451; Hapwood v. Haswell, 33 Eng. C. L. 79, 83; Wright v. Treve-zant, 3 Carr. & P. 441; Buell v. Cook, 4 Conn. 242; Bunk v. Hwnter, 5 Barn. & Aid. 322.
For the respondent there was a brief signed by Framk M. Hoyt, of counsel, and Quarles, Spence, Hoyt & Quwrles, attorneys, and the cause was argued orally by Framk M. Hoyt.

Opinion:
PikNey, J.
1. The contention of the defendant's counsel is that the instrument on which the action is founded is not a lease; that although rent is reserved by it and agreed to be paid by the defendant, and it contains words of present demise, and there is nothing to show that the parties contemplated the execution of any other or further instrument on the subject, still there is no certain time expressed when it shall commence, nor is it made contingent upon the happening of any certain event; and therefore it is said that it is invalid, as a lease, for uncertainty. The general rule is stated to be that no precise words or technical form of language are required to constitute a present demise, and that if there are words showing a present intention that one is to give, and the other to have, possession for a determinate term, a tenancy is created; and that where there are words of present demise the instrument should operate as a lease, and not as an agreement for a lease. 2 Addison, Cont. (Morgan's ed.), § 677; Chapman v. Bluck, 4 Bing. N. C. 187, 196. Unless some certain beginning or event is referred to by which the period of its commencement may be ascertained, it will be void for uncertainty. Tayl. Landl. & Ten. § 70. There can be no doubt but that a valid term for years may be created to commence in futuro, and, if it be upon a contingency which must happen, the lease will be valid.
In the present case the premises are to be held for a term ending February 1,1902, and the owner, the plaintiff, agreed to erect a factory building thereon, and complete it so that it would be ready for occupancy on or before March 1, 1892, according to certain plans and specifications, unless prevented by causes beyond his control, he on his part exercising reasonable care and diligence; reserving an annual rental of $4,300, payable in sums of $358.33 on the 15th of each month, to begin when the building shall be ready for occupancy, the first payment to be made on the 15th day thereafter, and thereafter on the 15th day of each month. It also contains the usual formal stipulations mentioned in the foregoing statement. Ve think that the instrument in question was a - valid lease in prcesenti, for a term to commence in futuro, — that is to say, on the 1st of March, 1892, being the date when it "was agreed the building should be completed ready for occupancy; and there is evidence tending to show that it was so completed at the agreed túne, and possession tendered to the defendant, and thereby the essential element of certainty of the commencement of the term was fully satisfied.
In Thornton v. Payne, 5 Johns. 74, an agreement to let a farm, on condition that an annual rent of $250 should be paid for it on the 1st of April in each year during the term, was made January 7, 1806, for six years from April 1, 1807, and ending April 1,1813, and it was held to be a lease and not an agreement for a lease, and the payment of the $250 was not a condition precedent. It was there said by SrENCEE, J., that "it is a cardinal point in determining whether contracts between parties in relation to letting are leases or agreements for leases, to seek for the intention of the parties from the -whole instrument; " and that " in every case decided in the English courts where agreements have been adjudged not to operate by way of passing an interest, but to rest in contract, there has been either an express agreement for a further lease, or construing the agreement to be a lease m prmsenti would work a forfeiture, or the terms have not been fully settled and something further was to be done." An agreement to complete a certain building then erected for a factory and furnish water power and machinery therefor by a future day certain, and leasing said building to B. for a term of ten years from the day mentioned, etc., and B. entered into possession, it was held to be ' a present demise to commence i/nfutwro, and not merely an agreement for a lease. Bacon v. Bowdoin, 22 Pick. 401, 405. And the case of Jackson v. Delacroix, 2 Wend. 433, was distinguished, on the ground that the agreement in that case contained a provision for a future lease. To the same effect is Shaw v. Farnsworth, 108 Mass. 357. And in Bussman v. Ganster, 72 Pa. St. 285, where the agreement with B. was that G-. would erect a storehouse on his lot, with fixtures, to the satisfaction of B., to be ready by August 1st, at a rent of $600 per annum until April 1st, and thereafter for five years at the rate of $800 per annum, payable monthly, it was held that this was a lease of the land as well as the building, with a covenant by the lessee to pay rent; and Shaeswood, J., says: "It is true, here are no formal words of demise, but it is very manifest that, after the erection of the building, there was created a term of years in the premises, with a certain commencement and a certain termination; in short, with all the requisites of a demise." The period need not be definitely fixed by the contract of the parties which creates the estate. Id certmn est qxiod cert/am reddipotest.- It is enough that the instrument contains sufficient means of ascertaining the commencement and the end of the term. Tied. Real Prop. § 173.
The conclusion at which we have arrived is sustained by Chapman v. Bluck, 4 Bing. N. C. 187; People ex rel. Ward v. Kelsey, 14 Abb. Pr. 372; Trull v. Granger, 8 N. Y. 115, 118; Becar v. Flues, 64 N. Y. 518, 520. Tbe right of tbe defendant to tbe possession of tbe premises was complete on tbe day fixed for tbe completion of tbe building for occupancy, and be bad covenanted to pay rent, to be computed from that date, and could bave maintained ejectment for tbe premises. Tbe intention of tbe parties is clear from tbe instrument, and no further act was needed to elucidate it, such as taking possession. Tbe case of Regnart v. Porter, 7 Bing. 451, relied on by tbe defendant, is like thjs case would bave been bad tbe factory never been erected. In that case tbe improvement stipulated for was never made, and tbe parties sought to be charged bad never bad enjoyment or bad tbe opportunity to enjoy tbe premises according to tbe agreement.
2. Tbe question of fact strenuously disputed at tbe trial-was whether tbe building was completed ready for occupancy by March 1, 1892, in accordance with tbe plans and specifications, so far as applicable, and where not applicable whether it was built of proper material and in a reasonably safe and workmanlike manner,— in brief, whether there bad been a substantial compliance with tbe contract on tbe part of tbe plaintiff; and tbe evidence was such as to call for proper instructions to tbe jury on this subject.
Tbe court instructed tbe jury that, as to tbe work which was designated in tbe specifications, tbe question was whether or not there bad been a substantial and full compliance with tbe specifications; and as to tbe walls, in respect to which there were no specifications, tbe test was whether or not they were erected and constructed in a reasonably safe and workmanlike manner, and of reasonably safe and proper material, for tbe known purposes for which tbe building was to be used. And after having directed tbe jury in respect to what effect tbe fact would bave, if they so found it, that after defects bad been, pointed out by tbe defendant tbe plaintiff promised to remedy them, and tbe defendant, agreed tbat if be did so be. would accept tbe building, and tbe plaintiff incurred a large sum of money in supplying tbe defects, tbe court again repeated tbe instructions above set forth, in substance, adding: " If, on tbe contrary, you find tbat tbe work wbicb was not specified bas been done in a. manner wbicb was enbvrekj unsafe, unsatisfactory, and unfit, for tbe uses for wbicb tbe building was designed, and if you find tbat tbe work wbicb was specified bas been done in sucb a way as to afford no substantial compliance with tbe specifications, tben you should find for tbe defendant."' Further, tbat if after changes were made to remedy defects pointed out, " if a defect bas since developed wbicb must have existed at tbat time (March 1,1892), although not fully developed, sucb.as to make tbe building absolutely unsafe for occupation and use as a trunk factory, you are to consider tbat fact in determining whether there was a substantial compliance with tbe contract, March 1, 1892; " and after referring to tbe crack in tbe wall, caused by its settling unequally and tbe danger to tbe building on account of it, and tbat it could not be considered a defect " unless it endangers the standing and stability of tbe building for tbe uses for wbicb it was designed," tbe court further stated: "If you are satisfied tbat tbe building is in danger of bumbling down on account of tbe separation of tbe wall, . . . you are at liberty to find for tbe defendant, if you find{ the building absolutely unsafe by reason of a defect wbicb bas developed since those changes were made; " tbat tbe previous condition of tbe building was unimportant, except as it bore on its condition March 1, 1892, and its present condition, and except so far as infirmities have since developed which render tbe building actually misafe. Subsequently tbe court, charged tbe jury tbat if by reason of tbe crack in tbe wall,, or anything else, tbe building bad become unsafe by reason of an original infirmity, they might find for the defendant, although it might have appeared to the contrary, " if the building was not in fact properly constructed so as to be a safe and proper place for his business at that time."
The instruction first given to the jury stated the rule of law correctly as to what would be a sufficient performance of the contract on the part of the plaintiff. The subsequent instructions on this subject are repugnant to and contradict-' ory of this rule, and it Avas error to give them, requiring a reversal of the judgment. It does not require argument or the citation of authority to shoAV that the defendant could defend this action on the ground that there had not. been a substantial compliance with the specifications, or that the walls, in respect to which there were no specifications,, had not been erected and constructed in a reasonably safe and workmanlike manner, of reasonably safe and proper material for the known purposes for which the building was to be used, without shoAving that, at the time the premises were tendered to him, either that the building Avas entirely unsafe, or that defects then existing by reason of the plaintiff's failure to substantially perform his contract, AArhether open or latent, and since developed, in Avhole or in part, had rendered it absolutely vmsafe or in clanger of tumbling down, or that it Avas actually vmsafe. A building in either of these conditions would be untenantable, and, if it merely conformed to the requirements of these instructions, would be, in no just or proper sense, a substantial compliance with the obligations of the plaintiff under the contract.
Other points in relation to the admission or rejection of evidence do not require notice, as they may not arise upon another trial. Eor the errors noticed in the instructions of the court to the jury the judgment must be reversed.
By the Cowrt.— The judgment of the, circuit -court is reversed, and the cause remanded for a new trial.