Court Opinion

ID: 9707164
Source: CourtListenerOpinion
Date Created: 2023-08-26 02:04:14.730332+00
Date Added: 2024-06-11T18:22:28.711277
License: Public Domain

Opinion on the Merits
Mote, C. J.
— Appellant assigns as error the overruling of his motion for a new trial and contends that the decision of the trial court is (1) not sustained by sufficient evidence, and (2) is contrary to law, which he presents and argues collectively.
In the interest of brevity, we have adopted the concise statement of facts in the case as set forth in appellee’s brief, as follows:
“1. Noble Frank Denny and Gladys May Denny owned certain real estate in Lebanon, Indiana, on *327which there was a restaurant known as ‘Beacon Inn’ and a service station leased to Sinclair Refining Company. The Dennys operated the restaurant and owned the equipment.
“2. On April 16, 1955, the Dennys leased said real estate to the appellant, Troy H. Haney, and assigned to Haney all their right, title and interest in the Sinclair lease for the duration of the Haney lease.
“3. By the terms of the lease, Haney paid the defendants a rental of $10,000.00 per year, and was given an option to buy said property for $85,000.00, said option being non-assignable and it could not be exercised before the year 1960, and further provided that in case of the sale of said property the Dennys would pay to Haney the sum of $4400.00 which Haney had expended as a part of the cost in acquiring said lease.
“4. That the State of Indiana, under eminent domain proceedings, condemned said real estate on January 9, 1958, and took possession on May 1, 1958.
“5. Appraisers were appointed by the Court to fix the damages of all parties concerned, to-wit, the Dennys, as the owners in fee simple; Sinclair Refining Company, lessee; and Haney, the appellant, as a lessee. That said appraisers duly appraised the interests involved and fixed the damages for the appellant, Haney, in the amount of $39,642.65. The appraisers fixed the fair market value of the leasehold interest of the appellant at $4400.00; his interest in improvements, which he had made on the real estate in the amount of $5,293.36, and the fair market value of the furniture, fixtures and equipment owned by the appellant, or the damage to be sustained by him as a result of the taking, in the amount of $8,754.65, and other damages for Haney, in the amount of $21,194.64.
“6. Exceptions were filed by all the parties and the condemnation case was venued to Montgomery County.
*328“7. Noble Frank Denny died December 13, 1958, and, subsequent thereto, the appellant filed Claims against the Denny Estate.
“8. That said condemnation case, State of Indiana v. Gladys May Denny, Executrix of the Estate of Noble Frank Denny, deceased et al., No. 32172, went to trial in the Montgomery Circuit Court, and, after several days of hearing, the State of Indiana withdrew its objections.
“9. Since all the parties involved had drawn down the money paid into the Clerk’s Office of the Boone Circuit Court by the State of Indiana, Judge Sommer, of Montgomery Circuit Court, held that the State had a right to withdraw its objections, and rendered judgment in favor of all of the parties involved in the amounts fixed by the Court’s appraisers. The appellant appealed from said judgment and said appeal is now pending in the Supreme Court of Indiana under Cause No. 30070. The claims the appellant filed against the estate of Noble Frank Denny were consolidated and tried under Cause No. 21472 in the Boone Circuit Court and judgment for the appellee was entered June 9, 1961, from which judgment this appeal is taken.”
The lease of real estate with option to purchase here involved, omitting the detailed description and other formal parts, is as follows:
“Exhibit A
LEASE
THIS AGREEMENT, made and entered into in duplicate this 16th day of April, A.D. 1955, by and between Noble F. Denny and Gladys M. Denny, his wife, of 529 Esplanande Street, Lebanon, Indiana, Parties of the First Part, hereinafter referred to as ‘Lessor,’ and Troy Haney of 5102 North Pennsylvania Street, Indianapolis, Indiana, Party of the Second Part, hereinafter referred to as ‘Lessee.’
WITNESSETH:
1. Lessor, for and in consideration of the rents, covenants and agreements hereinafter mentioned, *329reserved and conditioned on the part of Lessee to be maintained, paid, kept and performed, has rented and leased and by these presents does hereby rent and lease unto Lessee, their successors and assigns, the following described premises, situate two-tenths (2/10) miles South of the City of Lebanon on State Road #39, Highway, State of Indiana; said premises being further described as:
To Have and to Hold the above rented and leased premises with the buildings, improvements and fixtures, and such furniture, restaurant equipment, pumps, tanks, air compressors, appliances, pipe lines, unloading racks and unloading facilities as may now or hereafter be located or placed thereon by Lessor, including without restricting thereto the equipment list attached hereto and marked Exhibit A, and all rights, privileges and appurtenances thereunto belonging, together with any and all permits, whether village, city, county or State, unto Lessee, their successors and assigns, for a term of nine and one-half (9-1/2) years from the 16th day of April, A.D. 1955. Lessor hereby covenants and agrees to place Lessee in possession of the demised premises and improvements at the beginning of and for said term, Lessor hereby gives and grants to Lessee the exclusive option and privilege of extending this lease from year to year for five successive yearly periods in addition to the nine and one-half year term above specified. Lessee may exercise its option at the end of the term above specified and at the end of each yearly period by remaining in possession and by paying the rent as herein provided. Lessee shall have the privilege of terminating this lease at the end of the nine and one-half year term as above specified.
2. Beginning with April 16, 1955 and at the beginning of each six month period, thereafter, during the continuance of this lease, Lessee agrees to pay to Lessor the sum of $5,000.00 in advance for said respective six months period during the term of this lease. All rentals shall be payable to Noble F. Denny and Gladys M. Denny, and may be paid by check mailed to Lessor at Lebanon, Indiana, or to such person or persons as may be designated *330in writing by Lessor to receive the same receipt of above payment is hereby acknowledged.
3. If at any time during the term hereof Lessor shall be indebted to Lessee on any account whatsoever, Lessee shall have the right to apply any accrued rental upon said unpaid indebtedness of Lessor, and Lessor agrees that the amount so applied shall constitute rental payment hereunder.
4. Lessor covenants and agrees to and with Lessee that the rents being paid in the manner and at the time prescribed, and the covenants and conditions and warranties herein being all and singular kept, fulfilled and performed, Lessee shall lawfully and peaceably have, hold, possess, use and occupy the premises and property hereby leased during the term hereby granted, or any extension thereof, without any hindrance, disturbance or molestation from Lessor; and Lessee hereby warrants and defends to Lessee against the lawful claims of all persons whomsoever the premises and property hereby granted. Lessor further covenants and agrees that, without Lessee’s consent, it will not use or permit to be used for the storage, sale, distribution, or advertisement of petroleum products any premises which may be or become owned or controlled by Lessor adjacent to the premises covered hereby.
5. During the term of this lease, Lessor covenants and agrees to pay all general special real estate property taxes but the same shall be limited to real estate property taxes only, Lessee shall pay all other taxes on stock owned by Lessee and on all equipment and personal property owned by Lessor and covered by this lease as well as all utilities charges, special assessments of any kind or character against said real estate or the property covered by this lease and all other charges, assessments or taxes arising out of the operation of business as said location by Lessee.
6. Lessee agrees at his own expense to maintain said premises and the improvements, equipment and personal property thereon hereby leased, including driveways, and approaches in as good condition as the same are now in at the time of *331the beginning of this lease. Lessee further agrees to replace and repair any of the demised premises or personal property of Lessor if, as and when such repairs and replacement is needed. With respect to personal property and equipment of Lessor when the same shall be replaced, such replacement shall be and become the property of Lessor subject to the terms of this lease as if the same has been property originally leased herein.
In the event of destruction of or damage to the demised premises or personal property caused by fire or action of the elements, if Lessor fails to rebuild or repair within 60 days after such destruction or damage, Lessee shall have the option of terminating this lease by notice to Lessor and upon such termination, Lessee shall be relieved from all obligations hereunder thereafter.
7. Lessee shall have the right to make proper connections with any and all water, gas and sewer lines and pipes on the demised premises, and may continue to use and service thereof during the term of this lease.
8. In the event Lessee shall be in default in the payment of rentals hereunder, or otherwise, and shall remain in default for a period of thirty (30) days after notice in writing from Lessor to it of such default, Lessor shall have the privilege of terminating this lease and declaring the same at an end, and of repossessing itself of the premises, and Lessor shall have the remedies now provided by law for recovery of rent and repossession of premises in the event Lessee shall remain in default.
9. In the event Lessee is unable to obtain all permits and permissions necessary to install, operate and maintain on the leased premises the necessary building and equipment for conducting its business as herein provided, or if at any time hereafter Lessee is prevented by operation of law from using said station and premises for the purposes aforesaid, then and in any of said events Lessee may, at its option, cancel this lease and be relieved of any further liability hereunder.
*33210. For and in consideration of the promises and agreements on the part of each party herein to be performed, Lessor hereby gives and grants unto Lessee from April 16, 1960 for and so long as this lease or any renewal thereof shall be effective, the sole, exclusive and non-assignable option to purchase the leased premises, including all Lessor’s improvements thereon and all equipment and personal property belonging to Lessor and covered by this lease free and clear of any and all liens and encumbrances of any kind or nature whatsoever for the sum of $85,000.00, in cash or by such other method of payment as may be agreed upon between Lessor and Lessee. It is understood and agreed by Lessor that whomsoever purchases said property, the Lessor, shall refund to Lessee the brokerage commission paid to John Weigle & Associates, in the sum of (4,400.00) to Lessee, Troy Haney or his heirs and assigns. Refer to, paragraph #13.
It is further understood and agreed that this entire lease, including all provisions, shall be void and of no force and effect whatever if Harold Berger and Lee Adler of Tippecanoe County, Indiana, shall exercise a certain option which they have affecting said real estate and personal property and if said option shall be exercised on or prior to October 15, 1954, and in the event of the exercise of said Berger and Adler option, Lessor agrees to return to Lessee the initial monthly rental payment herewith paid by Lessee to Lessor.
11. It is further understood and agreed that this lease and all provisions thereof, including the option to purchase is subject and inferior to a certain written agreement of lease with the right of refusal of option to purchase existing between Lessor or either of them and Sinclair Refining Company.
12. It is understood and agreed that upon the execution of this lease and entry into possession by Lessee that the rights of Lessor under said Sinclair Refining Company lease shall be transferred and assigned to Lessee for the duration and subject to the terms of this lease, including among said *333rights, the right of Lessor, to be assigned to Lessee, of receiving 1/2 cent rebate on gallonage to be paid by Sinclair Refining Company under said Sinclair lease.
13. It is understood and agreed that upon the execution of this lease, Lessee is paying to John Weigle & Associates of Lafayette, Indiana, a brokerage commission in the sum of $4,400.00 and that the payment of said brokerage commission 'by Lessor is in full payment of all obligations of all parties hereto, including the execution of this lease and the exercise of Lessee’s option.
Lessor warrants and represents that there are no operating debts or obligations of said business other than the bills receivable and bills payable, a list of which is attached hereto, made a part hereof, and marked Exhibit B and it is agreed between the parties hereto that as of April 15, 1955, Lessor shall have and take all bills receivable and that Lessor shall pay all bills due and payable as of April 15, 1955. This agreement shall not obligate Lessor to immediately pay any long term indebtedness or liens on said property during the term of this lease prior to the exercise and execution of Lessee’s option to purchase above defined.
14. Lessee agrees to keep and maintain comprehensive public liability insurance on said premises and the operation thereof in a company or companies and amounts satisfactory to Lessor and for the protection of Lessor as well as Lessee.
IN WITNESS WHEREOF, the parties hereto have set their respective hands and seals the date first above written.”
Since this appeal must be decided on an interpretation of the above lease and the rights of the parties to this appeal, as advanced by them, we consider that it is not essential to set out the two claims filed by appellant against appellee estate which were disallowed, transferred to the issue docket and tried by the court without intervention of a jury, resulting in a judg*334ment adverse to appellant that he take nothing on his said claims.
In addition to the appraisers’ awards in the condemnation proceedings made to appellant, appellee estate and Sinclair Refining Company, lessee of part of the real estate and not involved in this appeal, received the following awards:
“The Dennys were allowed:
The fair market value of the fee simple interest 17969.07
The fair market value of all improvements pertaining to the realty 55119.14
The fair market value of the furniture, fixtures and equipment 13276.11
Other damages resulting from the taking 20000.00
106364.32
Sinclair Refining Company was allowed:
Fair market value of leasehold interest 6263.00
Fair market value of the furniture, fixtures and equipment 5603.10
Other damages resulting from the taking 6263.00
18129.10”
Objections and exceptions were filed by all parties in the condemnation proceedings to the appraisers’ awards and then all defendants therein, except appellant, withdrew their said objections. The action went to trial on the objections and exceptions of appellant and the State of Indiana appraisers’ awards were upheld by the court and the State of Indiana recovered judgment on condemnation. Appellant herein filed a motion for new trial, which motion was overruled, and the matter is now on appeal to the Supreme Court of Indiana under Cause No. 30070.
*335Appellant’s position in relation to their appeal succinctly seems to be stated in his brief as follows:
“Notwithstanding the statutory remedies available to appellant in the condemnation proceeding as above referred to, . . . the award of damages made to lessors, Noble F. Denny” (now deceased and against whose estate the claims before us were filed) “and Gladys Mae Denny is erroneous in that it provides for the payment to said lessors of certain damages which appellant claims should properly have been a part of the award of damages to him (appellant). ...”
Whether appellant herein was awarded sufficient damages in the condemnation proceeding amply to reimburse him for the property rights taken from him is not for us to say. Such question necessarily will have to be determined in that proceeding which is on appeal to the Supreme Court. Appellant was a party to the proceeding and he is bound by the outcome thereof as a co-defendant with substantial property rights involved. Appellant had the burden of proving his damages. Douglas et al. v. Indianapolis & Northwestern Traction Company (1906), 37 Ind. App. 332, 76 N. E. 892.
Appellant contends that certain damages awarded to appellees in the condemnation proceeding should have been awarded to him and to advance his reasoning in this respect he asserts an ownership in the real estate and personal property based on the option to purchase. A lease of real estate with an option to purchase, and particularly where the option has not ripened, as in the case at bar, does not create in the lessee and future optionee an interest in the property upon which recovery may be had after the same has been taken by eminent domain.
*33629. C. J. S. Eminent Domain, §196, p. 1101, contains the following statement:
“ . . . The holder of an option to purchase land being condemned has no interest in land which will entitle him to compensation, although there is some authority to the effect that, if such option is exercised after the condemnation, the holder thereof is entitled to claim the damages awarded, less the purchase money payable to the owner.”
Appellant seems to make an effort to bring himself within the terms of the latter part of the above quoted statement, but has wholly failed to do so according to the record. Even so, this principle would be unavailing to him under the case of Kritz v. Moon (1928), 88 Ind. App. 5, 163 N. E. 112, which states:
“The contract giving Edward B. Moon an option did not give him any title to the land, either legal or equitable, and his assignment of his rights under the contract passed no title to his assignee. Pollock v. Brookover (1906), 60 W. Va. 75, 53 S. E. 795, 6 L. R. A. (N. S.) 403; Rease v. Kittle (1904), 56 W. Va. 269, 49 S. W. 150. ‘An option is not an actual or existing contract for the sale of property. It is a proposition by one party, for a consideration, which must be accepted within the specified time, in the precise terms named, before it becomes a binding contract. If not so accepted, it does not become a contract, and the option is at an end.’ ...”
Applying the legal principle announced in the next above cited authorities, it seems to us that appellant will have to depend upon recovery of his damages on the outcome of the appeal in the condemnation proceeding now before the Supreme Court, and the judgment of the trial court adverse to his claims in the case at bar must stand.
*337The lease and option before us is not in the same category as the consummated sale contract in the case of In re Aurora Gaslight Coal and Coke Company (1917), 64 Ind. App. 690, 113 N. E. 1012, cited by appellant.
Because appellant paid $4,400.00 to brokers who had been employed to secure a purchaser for the property, which sum was to be credited on the purchase price if the option to purchase were exercised in due season, it is contended that appellant acquired some kind of vested interest in the title to the said real estate. We do not interpret the lease with option to purchase after the expiration of five (5) years of the lease as accomplishing this. On the other hand, it seems to us that appellant was simply a lessee of the property, real and personal, with the right or option, after the expiration of five (5) years of the nine and one-half (9-1/2) year lease, to purchase the same. Until and unless appellant’s option ripened — by the passage of time, payment of lease rental, the performance of the other obligations set forth in the lease, and the exercise of such option in the manner provided, he had no interest other than as a lessee in and to the property. And such interest could be transformed to title only upon performance of the necessary obligations in the exercise of said option.
The record before us does not disclose unlawful entry, unlawful sale and a misappropriation of money derived from the sale of personal property, which was owned by appellee. Whether appellant may have followed procedures other than those adopted and followed as revealed by the record, thus perhaps to have placed him in a different situation, is not now before us and, accordingly, we do not decide. Our decision is limited to that which is before us; the provisions of the lease *338with option to purchase, and what was done by the parties as shown by the record.
Since reversible error has not been demonstrated, the judgment is affirmed.
Hunter and Kelley, JJ., concur; Pfaff, J., concurs in result.
Note. — Reported in 193 N. E. 2d 648. Opinion on Motion to Dismiss reported in 183 N. E. 2d 346.