Case Name: SCHOLTZ v. NORTHWESTERN MUT. LIFE INS. CO.
Court: United States Court of Appeals for the Eighth Circuit
Jurisdiction: United States
Decision Date: 1900-03-13
Citations: 100 F. 573
Docket Number: No. 1,255
Parties: SCHOLTZ v. NORTHWESTERN MUT. LIFE INS. CO.
Judges: Before CALDWELL, SANBORN) and THAYER, Circuit Judges.
Reporter: Federal Reporter
Volume: 100
Pages: 573–576

Head Matter:
SCHOLTZ v. NORTHWESTERN MUT. LIFE INS. CO.
(Circuit Court of Appeals, Eighth Circuit.
March 13, 1900.)
No. 1,255.
1. Agreement to Lease — Terms Unsettle» — Statute oi<’ Frauds.
An agreement to lease, which describes the premises intended to be demised in such manner as to fully identify them, specifies the length of time the lease is to run, and the amount of rent to be paid monthly, is sufficiently complete to be enforced, either in equity or by a suit at law, although 11 provides, the “said lease to be in the usual form in use” in the city where the premises are situated.
2. Same.
The clause in an agreement for a lease for a term of years, that “said second parties are to have the right to make such alterations ami repairs in said building as they see fit, — not, however, without first submitting tlie same to said company or its agent, and obtaining their or his consent therefor,” — is to be construed as the substance of a special covenant which was to be inserted in the lease when drawn, and will not prevent the enforcement of an agreement otherwise complete, on the ground that the minds of the parties have not met as to all the terms of the lease, sufficiently to satisfy the statute of frauds.
8. Same — Brbacii—Instructions to Jury.
Where, in an action for damages for the breach of an agreement for a lease, all of defendant’s objections to the sufficiency of the contract had been overruled, and the agreement admitted in evidence, and no other issue under the pleadings remained, save the amount of damages sustained, it was not error for the court to withdraw from the considerations of the jury all questions presented by the pleadings, save the amount of damages to which plaintiff was entitled.
In Error to the Circuit Court of the United States for the District of Colorado.
This action was brought by the Northwestern Mutual Life Insurance Company, the defendant in error, against Edmund L. Scholtz, the plaintiff in error, and William H. Hunter, to recover damages for the alleged breach of an executory agreement to enter into a lease. The contract sued upon was as follows:
“This agreement, by and between the Northwestern Mutual Life Insurance Company, by Samuel 0. Adams, agent, of the first part, and E. L. Scholtz ■and W. H. Hunter, parties of the second part, witnesseth, that the said party of the first part, in consideration of the sum of seven hundred and fifty (750) dollars, the receipt whereof is hereby acknowledged, and in consideration of the agreement of the parties of the se,cond part hereinafter set, forth, covenants and agrees to lease to the parties of the second part that certain storeroom and basement in the city of Denver, on the comer of Curtis and Sixteenth streets, in the Tabor Opera-House Block (including that part of said storeroom now occupied as a cigar store), for the term of three (3) years from the thirty-first day of May, 3897, a.t a monthly rental, payable monthly in advance, for the first year of seven hundred and fifty (750) dollars per month, for the second year of eight hundred (800) dollars per month, and for the third year of eight hundred and fifty (850) dollars per month; said lease to be in the usual form in use in the city of Denver, and the said above-mentioned payment of seven hundred and fifty (750) dollars is to be regarded as the rent for the first month (being the month of .Tune, 1897). Said second parties are to have the right to make sueli alterations and repairs in said building as they see fit, — not, however, without first submitting the same to the said company or its agent, and obtaining their or his consent therefor; but all such repairs and alterations are to be at the sole expense of the said parties of the second part, without any cost or liability to the said party of the first part. Said party of the first part agrees to pay the water rate for the said leased premises. And the said party of the first part will furnish steam, heat for said room free of expense to the said parties of the second part. Light to be at the charge of the parties of the second part. And the parties of the second part, in consideration of the premises and of the agreements of the party, of the first, part, hereby agree to rent said premises at the above rate and on the above terms of the said party of the first part, and to enter into a lease as above set forth for such purpose.
“The Northwestern Mutual Life Ins. Co.,
“By Sam’l C. Adams, Agt.
“W. H. Hunter.
>“E. L. Scholtz.”
In May, 1S97, shortly after the execution of the foregoing agreement, a lease was prepared, and submitted to Scholtz & Hunter for tlieir signature. No objection was made to the form of the lease, but. they delayed signing the same; and on or about July 7, 1897, they declined to enter into the lease, giving as a reason for such refusal that they could not get money to make the alterations in the leased premises which they had designed to make. A portion of the premises described in the aforesaid agreement was occupied by a tenant at the time the aforesaid agreement was executed, and on July 29, 1897, Scholtz & Hunter gave to the agent of the plaintiff company written authority to collect the rent thereof for the month of July, “and to credit the same on our rent of store', No. 1000 Sixteenth street, for that month.” The trial resulted in a judgment in favor of the xfiaintiff below in the sum of -¶!2,970, to reverse which the present writ of error is brought.
Henry J. O’Bryan (J. Grattan O’Bryan, on the brief), "for plaintiff in error.
John H. Denison (Ralph Talbot and William H. Wadley, on the brief), for defendant in error.
Before CALDWELL, SANBORN) and THAYER, Circuit Judges.

Opinion:
THAYER, Circuit Judge,
after stating the case as above, delivered the opinion of the court.
The principal contention of the plaintiff in error, who was a defendant below, is that the agreement above recited does not show that the minds of the contracting parties had met as to all the terms of the lease, and that the agreement is for that reason insufficient to satisfy the statute of frauds. This contention is based entirely on the ground that the agreement contains the clause, "Said lease to be in the usual form in use in the city of Denver," and the-further clause, "Said second parties are to have the right to make such alterations and repairs in said building as they see ñt, — not, however, without first submitting the same to said company or its agent,(and' obtaining their or his consent therefor." It may be conceded 'that an- agreement to enter into a lease will neither be enforced in equity nor at law if it appears from the face of the agreement that any of the terms of the lease, no matter how unimportant they may seem to be, are left open to be settled by future conferences between the lessor and lessee. In such cases there is no complete agreement; the minds of the parties have not fully met; and, until they háve, no court will undertake to give effect to those stipulations that have been settled, or to make an agreement for the parties respecting those matters that have been left unsettled. Mayer v. McCreery, 119 N. Y. 434, 23 N. E. 1045; Ridgway v. Wharton, 6 H. L. Cas. 238, 307; Law v. Pemberton (Com. Pl.) 31 N. Y. Supp. 21; Nasanowitz v. Hanf (Sup.) 39 N. Y. Supp. 327; Forster v. Rowland, 7 Hurl. & N. 103, 107. It seems to be equally well settled, however, that an agreement for a lease which describes the premises intended to be demised in such a manner as to fully identify them, and specifies the length of time the lease is to run, and the amount of rent to be paid, either by the month or by the year, is sufficiently complete to be enforced either in equity or by a suit at law, provided the instrument does not disclose that there are other matters which the parties designedly left open for further consideration before the lease was to be executed. The authorities show' that agreements to execute leases which are complete and definite to the extent above indicated have been enforced both at law and in equity, and that they are not rendered too indefinite for enforcement if they contain a stipulation for the insertion of the "usual covenants.'' Kendall v. Hill, 6 Jur. 968; Sharp v. Milligan, 23 Beav. 419; Bond v. Rosling. 1 Best & S. 371; Cochrane v. Mining Co., 16 Colo. 415, 419, 420, 26 Pac. 780; Tayl. Landl. & Ten. (8th Ed.) § 44, and cases there cited. If either the lessor or the lessee desires any special or unusual covenant: to be inserted in a lease, he should stipulate for its insertion in the preliminary agreement, since in the absence of such a stipulation the law will imply that the parties had in view' the usual covenants or the usual form of lease; having reference to the character of the demised premises, and the place where they are situated. If the preliminary agreement contains a clause that the lease shall contain "the usual covenants," or "all usual and necessary covenants," or be in the "usual form," such clauses do not render the agreement incomplete or too uncertain for enforcement, if it is otherwise sufficient, because such clause's express no more than the law would imply in their absence. Garrard v. Grinling, 2 Swan. 244, 249; Wilkins v. Fry, 1 Mer. 244, 263, 264; Tayl. Landl. & Ten. (8th Ed.) § 44; Cochrane v. Mining Co., 16 Colo. 415, 419, 26 Pac. 780. We think, therefor/', that the (dause found in the agreement now under consideration, "Raid lease to be in the usual form in use in the city of Denver," does not in-validan' the agreement, or render it incapable of enforcement, since it has the same legal effect that it would have had if those words had been omitted. The parties to the contract did not say that the form of the lease; should be left open for further determination by them, but that it should be in the usual form in use in the city of Denver; and this a court of chancery would have said when called upon to enforce it specifically, if the agreement itself had contained no reference to the form of the lease or to the covenants which it should contain. Moreover, when a lease was prepared by the plaintiff company in pursuance of the agreement, and was submitted to the defendants below for their inspection and signature, they did not object to it or refuse to execute it because it was not in proper form, but for the reason that they were unable to make such improvements and alterations in the leasehold premises as they had contemplated. In view of such conduct on their part, it must be presumed that the lease tendered to them was in due form, and was such a lease as was contemplated by the terms of the provisional agreement.
The other clause found in the contract in suit to which our attention is directed, namely, the clause permitting alterations in the demised premises, subject to the approval of the lessor, has reference, we think, to a special covenant which was to be inserted in the lease. Looking at the contract as a whole, it seems to have contemplated an immediate entry by the lessee, and a speedy execution of a lease embodying all the terms and conditions of the provisional agreement. We are, therefore, constrained to hold that the clause in question stated the substance of a special covenant which was to be inserted in the lease when drawn, and that it was not expected that the alterations and repairs should be fully determined upon by the lessee and assented to by the lessor before a lease was executed. Any other view would render the agreement which was entered into tentative and valueless, whereas it seems to have been intended as a definite settlement of the rights of the parties, by a contract which each could enforce. Moreover, such a special covenant as the one in question is not an unusual covenant. The lessees of buildings situated in large cities and towns sometimes stipulate for the insertion of such a covenant in their respective leases, to enable them to alter the demised premises at any time during the term when alterations are deemed expedient or necessary. We are of opinion, therefore, that no error was committed by the trial court in admitting the agreement in evidence, or in refusing the various instructions relative to the construction of the agreement which were asked by the defendants.
It is further assigned for error that the trial court admitted some irrelevant and immaterial testimony, and that it erroneously withdrew from the consideration of the jury all questions presented by the pleadings, save the amount of the damage. An examination of the record has satisfied us, however, that no error prejudicial to the defendants below was committed, either in admitting or excluding evidence, and it would subserve no useful purpose to review such exceptions in detail. As respects the other point, we deem it sufficient to say that after the contract in suit had been admitted in evidence, and the defendants' various objections thereto had been overruled, there was no issue, under the pleadings, which the jury could properly determine, except the amount of the damage that had been sustained by the breach of the agreement. The substantial question in the case was whether the contract sued upon was so far complete and definite in its terms that it could be enforced. It is conceded that the jury were properly instructed as to the measure of damage, and that being so, and the contract in suit having been properly construed, and the breach thereof admitted, the judgment below cannot be disturbed. It is accordingly affirmed.