Opinion ID: 1613051
Heading Depth: 1
Heading Rank: 1

Heading: Validity of Lease.

Text: Sec. 235.01 (5), Stats., provides that: When such conveyances are of lands or any interest therein, owned by a corporation organized under any law of this state, they shall be signed by the president or other authorized officers of the corporation, . . . and countersigned by the secretary, assistant secretary, cashier or assistant cashier, or clerk thereof; . . . Defendants-appellants allege that the lease in question was a conveyance and is invalid because the lease was improperly executed. Sec. 235.01 (5), Stats., requires that a lease by a corporation must be signed and countersigned. Plaintiff-respondent failed to have the lease countersigned. Sec. 235.50, Stats., defines the term conveyance as follows: The term `conveyance' as used in this chapter, shall be construed to embrace every instrument in writing by which any estate or interest in real estate is created, aliened, mortgaged or assigned or by which the title to any real estate may be affected in law or equity, except wills and leases for a term not exceeding three years; . . . (Emphasis added.) The lease in question was for a term of two years with an automatic renewal clause in the absence of a termination notice by either party. Appellants argue that this lease is for a period of more than three years so that the lease is a conveyance which is voided by failure to comply with sec. 235.01 (5), Stats. In Milwaukee Hotel Wisconsin Co. v. Aldrich [1] the original lease was for three years and the lessee had the option to extend the term for three years. The court held that this was a lease for six years and void for failure of compliance with sec. 235.01 (5), Stats. The court said: The rule of law is that a lease for three years and three additional years if the lessee chooses to continue it, is a lease of itself for six years. . . . `This is so because, if the tenant makes the election, he still holds under the original demise; there is no further act to be done by the lessor.' [2] In the instant case, however, the period of the lease does not include the period of time covered by the automatic renewal clause. This is so because the automatic renewal clause provides that both the lessor and the lessee can prevent renewal of the contract by a sixty-day notice prior to the termination of the lease. In Milwaukee Hotel and Sheppard [3] the lessee had a unilateral right to bind the lessor to an additional term beyond the initial period. There is a distinction between a provision in a lease for renewal and a provision in a lease for an extension at the option of the lessee. Only the latter is treated as a demise for the full term to which it may be extended. [4] Thus, the automatic renewal provision in the lease in question is not a demise for the full term to which it may be extended and is not a conveyance subject to the formalities of sec. 235.01 (5), Stats. Appellants also claim the lease is invalid because respondent breached the lease by an unreasonable construction. Appellants left the premises in November in clear violation of the lease, which was still effective for over a year and a half. This probably justified the action taken by respondent. Even if respondent breached the lease by unreasonably construing it, the unreasonableness of construction is not an issue which can be properly settled in a motion for summary judgment. Affidavits containing ultimate facts are ineffectual in considering a motion for summary judgment and affidavits dealing with factual matters must be clear and conclusive to be a basis for granting summary judgment. [5] Both of these standards bar a consideration of the reasonableness of contract construction on a motion for summary judgment.