Selts Investment Co. v. Promoters of the Federated Nations of the World, Inc.

222 N.W. 812, 197 Wis. 476, 1929 Wisc. LEXIS 2

• Court: Wisconsin Supreme Court
• Decided: January 8, 1929
• Status: Published

Opinions

The following opinion was filed June 18, 1928:

Doerfler, J.

Under the terms of the lease, upon a breach of any of its conditions or covenants therein mentioned, the lessor may without notice declare the term ended. He may then also re-enter, with or without process of law. This re-entry, according to the terms of the lease, may be either with or without force. Such expulsion or removal by the lessor, or through the medium of legal proceedings, shall not affect the liability of said lessee for either past rent due or future rent to accrue.

In the case of Tower Building Co. v. Andrew, 191 Wis. 269, 210 N. W. 842, the provisions in the lease, as far as the question herein involved is concerned, are substantially like those above set forth in the Eleventh paragraph of the lease involved in the instant case. In the Tower Case the lessee breached the lease by failing to pay the stipulated rent. Notice to terminate the lease was then served upon the tenant, but such notice did not comply with the requirements of sub. (2) of sec. 291.01 of the Statutes. It was held in that case that the unlawful detainer proceedings were purely statutory, and in order that one may avail himself of these proceedings every provision of the statute applicable must-be strictly complied with. Having commenced unlawful detainer proceedings ostensibly under the provisions of sec. 291.01, and having failed to give the notice required by that statute, the lessor was denied the remedy provided for by that statute. In that case, however, a notice was served upon the lessee declaring the lease terminated. It was there held; “There can be no doubt that the lease was by its terms and the service of the notice . . . forfeited and at an end.” ■ The lease being terminated, there is no basis or consideration for future rents. (See the opinion in the preceding case, handed down herewith, ante, p. 471, 220 N. W. 220.)

A well-founded distinction is recognized by the statute with respect to short-term leases and long-term leases. The procedure to declare long-term leases forfeited is contained in sec. 234.19 of the Statutes (formerly sec. 2197c). Evidently the only purpose of providing a different procedure in long-term leases from that which obtains under short-term leases is based upon the theory that in long-term leases the lessee is under obligation to expend large sums of money for the improvement of the premises, with the result that his equity in the property is vastly greater than that possessed by a lessee under a short-term lease. The legislature considered that where a lessee takes possession of property for more than fifty years, under and pursuant to which he is required to construct or make extensive improvements upon the property, a period of three days such as is provided for by sec. 291.01 would ordinarily be inequitable and tend to work great injustice. Therefore, in long-term leases it is provided that, before a lease can be judicially declared forfeited and the lessee expelled from the premises, a year’s time shall be fixed as a period for redemption.

Such a long-term lease was involved in the case of Mohawk Co. v. Bankers Surety Co. 162 Wis. 272, 156 N. W. 154. In that case it was held as follows :

“When the plaintiff . . . elected to resume possession and did resume possession of the demised premises . . . it accepted this possession of the demised premises in cancellation of all obligations to become due thereafter on the lease. It elected for such subsequently accruing damages this remedy instead of the remedy for br'each of covenant.”

The portion of the opinion in the Mohawk Co. Case just quoted amounts to a reasonable construction of sec. 234.19, Stats., and when we consider the object and purpose the legislature had in mind in enacting sec. 234.19, in connection with the object and purpose in regard to sec. 291.01, we must logically árrive at the conclusion that where, under proceedings prosecuted under these statutes, the demised premises are surrendered to the plaintiffs pursuant to a forfeiture, and when possession thereof is delivered by the lessees to the lessors and accepted, the lease comes to an end, with the effect that no future basis can exist to warrant further rents. The summary proceedings under the unlawful detainer statutes are not unlike the action of strict foreclosure under a land contract. When the lessor in his notice to quit under sec. 291.01 creates a situation pursuant to which the lessee can act in accordance with one of two privileges extended, the result is that if he pays the rent the lease is reinstated and the relations of landlord and tenant under the lease continue ás they existed before the breach; on the other hand, if the lessee, in compliance with the notice, vacates the premises and surrenders possession to the lessor, and the latter accepts the same, it is with the understanding that the lease terminates and the lessee’s obligation to pay rent also comes to an end. See, also, Kneeland v. Schmidt, 78 Wis. 345, 348, 47 N. W. 438; West Concord M. Co. v. Hosmer, 129 Wis. 8, 12, 13, 107 N. W. 12.

The lease also provided that, where a surrender of the lease occurs, the acceptance thereof must be in writing, subscribed by the lessor or its duly authorized agent. There was no written acceptance of the surrender, as provided for in article Eleventh above quoted, and plaintiff’s counsel therefore insists that the surrender pursuant to the notice to quit does not operate as a release for future rent. We are of the opinion that the surrender referred to in sec. 291.01 results from the written demand of the lessor, duly signed by him or his authorized agent, and that when the lessee, upon the service of such a notice, fails or refuses to pay the rent, but exercises the privilege extended to him by the lessor to surrender up and deliver the premises to the lessor within the time provided for by the statute, the lessor cannot complain in any event of his own failure to comply with the provisions of the lease in the execution of a written surrender. In any event, it must be deemed that the written surrender is waived.

By, the Court. — The judgment of the circuit court is affirmed.

The following opinion was filed January 8, 1929 :