Tungsten Co. v. Beach , 92 Conn. 519 ( 1918 )

All of the questions arising in the two cases were argued together, and as they arose out of the same transaction or series of transactions and, in the view which we take, depend, except as to the cross-complaint, upon the same questions of law, they will be discussed in one opinion.

The first question is whether the Tungsten Company is entitled to recover damages in its action against Beach and the Quarries Company, and we are of opinion that it is not so entitled, for the reason that by its continued default in the payment of rent and of installments of the purchase price it has lost all right and interest in the premises.

The Tungsten Company claims that its admitted default in making these payments is excused by § 4045 of the General Statutes, which provides, in substance, that the tenant of a tenement which is, without his fault or neglect, so injured as to be unfit for occupancy, shall not be liable to pay rent so long as the premises remain untenantable. We think this statute does not apply to this case. In the first place it applies only to rent, and all payments required by a lease as a condition of occupancy are not necessarily and for that reason only to be regarded as rent or additional rent.Filene's Sons Co. v. Weed, 245 U.S. 597,38 Sup. Ct. 211. Under this contract the obligation of the Tungsten Company was not only to make monthly payments of rent based on the terms of the original lease from Beach to the Quarries Company, but also to make monthly payments of not less than $500, which are expressly described in the contract as monthly installments to be credited on the purchase price in case the purchase is completed, otherwise "to be paid and received only as consideration for the current monthly enjoyment of the rights and privileges hereby granted." It is argued that this language characterizes the payments as additional rent; but on the face of the contract and in view of the undeveloped speculative value of the mine, we are of opinion that the two classes of payments called for by the contract are distinct and based upon separate considerations.

One of the specific agreements of the Tungsten Company was to develop the mine as speedily as possible. It was important that the value of the mine — assuming that it had value — should be promptly ascertained, and the provision for the payment of at least $500 a month on the purchase price was intended and adapted to prevent any delay on the part of the Tungsten Company in carrying out its agreement to speedily develop the mine. In short, this was the price paid for the continued enjoyment of the right to purchase the Quarries Company's option.

The statute does not apply to installments of the purchase price of leased property, but only to rent, and the consequence of a default in the payment of such instalments, continued for thirty days, is fixed by the contract, which provides that in such case the Quarries Company, at its option, may terminate the contract and recover possession of the premises. This it has elected to do, and, on the facts found, the rights of the Tungsten Company under the contract are at an end.

There are other reasons why the statute does not apply to this case. These premises are not, in our opinion, occupied as a "tenement" within the meaning of the statute. The original Act, passed in 1869, referred only to a "building," and the substitution of the word "tenement" in the Revision of 1875 was perhaps with reference to including parts of buildings also. The Act was so construed in Miller v. Benton, 55 Conn. 529,13 A. 678. It is not likely that the revisers intended to so enlarge the statute as to cover all kinds of real estate. In fact JUDGE BALDWIN remarked in Gulliver v. Fowler, 64 Conn. 556, 565, 30 A. 852, speaking of another change in the original Act made by the revisers, that the change in the phraseology "was evidently made simply for the sake of brevity, and did not affect its legal construction."

At any rate, it is safe to say that the property must be of such a nature and occupied for such a purpose as to be rendered substantially untenantable for that purpose, before the liability to payment ceases. In this case the occupancy of the Tungsten Company was not only that of a tenant under an operating lease, but also that a purchaser under an agreement to develop the mine and to pay instalments on the purchase price; and the finding of the committee is that the property "was not rendered by the fire unfit for occupancy or untenantable for the purpose of development of the mine nor for extracting ore therefrom commercially. The same was rendered by the fire unfit for occupancy and untenantable for the purpose of concentrating and refining tungsten ore." That is to say, the premises were untenantable for some of the purposes for which they were occupied and not untenantable for others, and we cannot say that the purposes for which they were still tenantable are not just as important under the contract as the purposes for which they were unfit for occupancy.

The conclusion that the Tungsten Company has lost all right and interest in the premises under the contract, determines the judgment which must be awarded as between the plaintiff and the defendants in the case of the Tungsten Company v. Quarries Company and in the case of the Quarries Company v. Tungsten Company.

The remaining question relates to the cross-complaint in the first-named case, brought by the defendant Quarries Company against the defendant Beach, for damages and for a decree settling the rights and obligations of the parties to the cross-action.

As to the claim for damages, it is enough to say that the committee has not found that the Quarries Company has suffered any damages.

As to the second prayer for relief, the committee has found that $8,000 is the reasonable amount of fire insurance which Beach agreed to carry, and the proceeds of which he agreed to apply, if requested, to the restoration of the buildings destroyed. It is also found that it would cost $28,000 to restore the buildings, and not found that the expenditure of $8,000 by Beach would substantially benefit the tenant. A court of equity will not compel Beach to expend $8,000 for the benefit of the tenant, unless the tenant would be benefited thereby. Possibly the lessee might, by a supplemental expenditure out of its own pocket, make the expenditure of $8,000 by Beach so beneficial as to warrant a decree requiring Beach to make it. Such possible action by a court of equity could, however, be taken only after the tenant had obligated itself to make the necessary supplemental expenditure, and no allegation or finding to that effect appears on the record.

The Superior Court is advised to render judgment for the defendants in the case of the Tungsten Company of America v. Frederick C. Beach; to render judgment for the plaintiff to recover possession of the premises in the case of The Long Hill Quarries Company v. The Tungsten Company of America; and to render judgment for the defendant Beach in the cross-action by the Quarries Company against Beach.

In this opinion the other judges concurred.