Petition for Writ of Certiorari — General Electric Co. v. Kirkpatrick

Supreme Court brief1963

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SuPRiN COURT. U. By a Tick S

| No. 811 | FEB 11 1963

, | JonW F. DAVIS, CLERK

| mmm ,

Supreme Court of the United States

Ocroser Term, 1962, con ‘

F. W. WOOLWORTH CO.,

Petitioner,

vs.

HENRI A. MEIS, Trustee Under Agreement Dated Decomber

26, 1945, and Known as the Blanche Meis Trust,

: Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

_ FOR THE SEVENTH CIRCUIT A

a 7

® ee :

ANAN RAYMOND

HOWARD E. KANE: -:

: THOMAS W. McNAMARA

135 South LaSalle Street

Chicago 3, Illinois

RAndolph 6-0220

Attorneys for Petitioner

- Of counsel: -

THOMPSON, RAYMOND, MAYER & JENNER

135 South LaSalle Street @ :

Chicago 3, Illinois

RAndolph 6-0220 i

. UNITED STATES LAW PRINTING CO., CHICAGO 18, ILL. LA keview 5-6581

. are te PAGE

Opinions Below eseilhtnest ieee SS SY oo 2

Jurisdictional Statement _ ........... sialic AR, OT

Questions Presented... iad Madionnlale ne

Statement of the Case ...........:cccccccseeeeeeeee scanioiaees a

‘Illinois Law Relating to the — ‘to Provide a

Source of Heat ne siieesnionnbapubetbaes 4

Proceedings DIONE - scpiinscncipiaiivetceamenniintectaence i : 6

Reasons for Granting the Wit -............-.....-----..---.e0-s-ee0+ 7

Conclusion ; man | a?

Appendix A, Opinion of United States Court of

Appeals. .... . App. 1»

.Appendix B, Opinion of the United States District

Court , . ..App.11_. :

Appendix C, Opinion of the lllinois Appellate Court in

Kaufman v. Shoe Corporation of America ..........App. 21

TABLE OF AUTHORITIES

Erie Railroad Co. v. Tompkins, 304° U.S. 64, 58 S. Cts —

817, 82 L. Ed. 1188 (1938) ....... 3 > a

Guaranty TrustCo. v. York, 326 U.S. 99, 65 S. Ct. 1464,

89 L. Ed. 2079 (1945) | saeniaminaniaminneeienian 7

3 Kaufman v. Shoe Corporation of America, 24 Ill. App.

2d 431, 164‘N.E. 2d 617 (3d Dist. 1960) ......--cccc0c------ 4

Yoder v. Nu-Enamel Corporation, 117 F. 2d 488 (8th -

Cir. 1941) ..... Sane dnateniCincieent none 9

1960 Annual Survey of’ American Law, $6 N.Y.U. L.”

Rev. 394 « _— ee.

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N. THE

‘Supreme Court of the United States

a OcToBER aiite —.

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F. W. WOOLWORTH ob. ee eh

Petitioner,

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eek 5 toe Ge

26, 1945, and Known as the Blanche Meis Trust, ¥

| Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

_FOR THE SEVENTH CIRCUIT |

F: W. Woolworth Co. petitions this Court to issue its

writ of certiorari to review the judgment of the United

States Court of Appeals for the Seventh Circuit “entered

in. F..W. Woolworth Co. vy. Henri A. Meis, Trustee Under

Agreément Dated December 26, 1945; and Known ds the

Blanche Meis Trust, No. — a 7

OPINIONS BELOW. i.

The majority opinion and dissent of the United States

Court of Appeals appear as Appendix A hereto, pages

' App. 1 to App. 10, and is reported at 310 F. 2d 350.

The opinion of the United States District Court for the

Eastern District of Illinois is not reported but appears as

Appendix B hereto, pages App. 11 to App. 20.

JURISDICTIONAL STATEMENT.

The opinion and judgment below were filed and entered

on October 22, 1962. A petition for rehearing was denied

November 20, 1962. The jurisdiction of this Court is in-

: voked under Section eg Title 28, United States Code.

QUESTIONS PRESENTED.

1.. Did the federal court, in an action based upon di-

versity of citizenship, overrule Illinois law as set forth in

_ Kaufman v..Shoe Corporation of America, 24 Ill. App. 2d

431, 164 N.E. 2d 617; (Appellate Court of Ilinois, 3d Dist.

1960, Appendix C hereto, aa 28)?

eae |

ee Se om

——

OO | .

( -_—s- ° STATEMENT OF THE CASE.

On July 1, 1953, F. W. Woolworth Co. (hereinafter re-

ferred to as ‘‘Woolworth’’) leased premises in Danville,

Illinois, from Henri A. Meis, Trustee (hereinafter referred

to as ‘‘Meis’’), for use as a’ retail variety store for a

25-year term. (R. 6-7)* |

In 1953, the premises were heated by steam supplied

from the Illinois Power Company, a public utility. (R. 42)

During negotiations, the landlord rejected a lease draft

tendered. by Woolworth containing its standard printed

provision obligating the landlord to supply heat at a fixed

temperature during the heating.season. (R. 64). .A rep-

resentative of the lagdlord testified that (R. 63):

**Well, it seemed to me it was a quite lengthy one

(conference] . . .; but we did finally get down to this

heating clause, the standard clause that was printed in

there, and we said we could not agree to that; that it

was objectionable to us, that-we didn’t want to have

any obligation: to furnish heat.”’ ; :

The possibility of the utility discontinuing service was

not discussed during the negotiations. (R. 43) Woolworth

never stated it would install a heating unit if one became

yecessary. The landlord@admitted that Woolworth was

not asked to assume this responsibility or told it would

have this obligation, (R..43) There is no lease provision

relating to the obligation to furnish a source of heat. The

- only heat provision is contained in Article 18, (R. 17):

* References to ‘‘R” in this petition are to the printe copies —

of 4M Appendix to the record used in the Court of A :*

‘where the utility eee service.

“The Landlord agrees at Landlord’s expense to

install and connect an adequate separate meter for

the purpose of. measuring all steam for heat consumed

Abe Tenant i in the demised premises. The Tenant

a to purchase and pay for the steam indicated

by said meter to have been consumed by the Tenant

from the public utility to which the derhised premises

are connected.’’

On June 17, 1957, the Illinois Power Company notified

‘Woolworth that it had been gratited permission by the

lllinois Commerce Commission to discontinue steam heat

‘service in Danville effective June 1, 1960..(R. 3, 27) With-

out heat, the premises are not suitable for use as a retail

store. (R. 30) A heating unit was installed in 1960 at a

cost of . $14,565.58. -By stipulation, the installation was

without prejudice to the present litigation. (R. 4, 29-30)

a c=

Illinois Law Relating to

. .« & Source of

There is no Illinois /statute or |

to the duty to furnish a source of heat. A single Illinois '

decision considers the obligation to supply a source of heat

In Kaufman v ‘Shoe Corporation o ee Ill. App.

. 2d 431, 164 N.E. 2d 617, Appendix C; App. 21 to App. 28

(3d Dist. 1960), store premises in Ch paign, Illinois, were

leased for a 25-year term commencing\in 1952 at a rental

of $20,000 per year. There was no lease provision relating»

to heat. The store was heated with stea purchased di- —

rectly by the tenant, from Ilinois Power Company.. In ©

1959, the utility discdntinued’ service in Chanipaign. The

ies installed a heating unit pursuant to written stipu-

lation pending outcome of the landlord’s Heslaretory judg-

ment action.

. >

7 5 ‘ _

In Kaufman, the Appellate Court noted that

heating equipment under the terms of the lease, was with-

out precedent in Illinois.

The Kaufman landlord argued that. the tenant’s ab-

ligation to install the heating equipment was covered by

the tenant’s covenant to keep the premises in good repair.

The Appellate’Court held that the word ‘‘repair,”’ strictly

construed, did not include alterations or additions and

hence, the installation of new heating equipment could not

be classified as either a ‘‘repair’’ or “‘structural repair.’’

The Appellate Court said (App. 24): |

‘“‘A general covenant of the tenant to repair, or to

basic.

question whether the. tenant was obligated. to install the |

keep the premises in repair, merely binds him to make -

the ordinary repairs reasonably required to keep the

~premises*in proper condition; it does not require, him

to make repairs involving structural changes. In order

to shift“on the tenant a burden which would naturally

fall on the landlord, the warrant for ike change should

be plainly discqverable -in the lease. 51 C.J.S., Land-

lord and“Tenant, Sec. 368. Ne

7 Where a tenant covenants merely to repair and the

' alterations or additions to the premises are of a sfruc-

tural or substantial nature and are made necessary by’:

extraordinary or unforeseen future events not within

the contemplation of the parties at the time the lease

was executed, the landlord is ordinarily held-liable for __

such alterations or additions.’’

7 , 8 \ > “: ;

The Appellate Court hetd that the landlord-should install

all heating equipment. : Pec tge MA ¢

No petition for leave to’ appeal to the Supreme Court

of Illinois was-filed.. When the case at bar was heard and.

decided in both the District Court and Court of Appeals,

the Kaufman case was, and now remains the last word of

4 hy)

Lee 8

ne spe oe 6

, the Illinois courts on the subject. No tibiae decisions °

* have cited or ent to ‘construe it, except the. case at

bar.

- In the 1960 yates Survey of American Law, 36 N.Y.U.L:

Rev. 394, the Kaufman decision received favorable com-

Proceedings Below.

On January 93, 1961 Woolworth filed a ‘hidlasiions inl.

ment action against Meis in the United States District

Court for the Eastern District of Illinois seeking a deter-

iination that Meis had the obligation to provide a source *

of heat in the pretnises and seeking réimbursement for the

$14,565.58 expenditure. The jurisdiction of the ‘federal. .

court was invoked on the basis of ” diversity of citizen-

ship of the parties.

» The District Court, sitting without a jury, heard sates

and entered a judgment in favor of the defendant.

The United States-Court of Appeals, Circuit Judge Swy-

‘gert dissénting, affirmed the Distriet Court. The majority

opinion attempted to distinguish the Kaufman case on- the

ground that the evidence of ihtention rendered inapplicable

the otherwise undisputed Illincis rule that. .the landlord

in liable. (App. 45)

‘

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ad ta é :

ARGUMENT.

THE MAJORITY OPINION OF THE SEVENTH CIR-

‘COURT OF APPEALS IS IN DIRECT CON.

WITH ILLINOIS LAW AS SET FORTH IN

THE KAUFMAN CASE ON THE IMPORTANT QUES-

TION WHETHER ILLINOIS LAW IMPOSES UPON ©

* THE LANDLORD OR THE TENANT THE BURDEN.

OF UNFORESEEN STRUCTURAL saa alacant TO

THE LEASED PREMISES. — ,

In Guaranty Trust Co.‘v. York; 326 U.S. 99, 109 » 1965) |

this Court stated: | ‘

‘Erie R. Co. v. Tompkins was not an sae to.

formulate scientifie legal terminology. It expressed -

a policy that touches vitally the proper distribution

of judicial power between State and federal courts.

, . The nub of thé policy that underlies Erie R. Co.

v. ¥. Tompkins i is that for the same transaction the acci-

dent of a suit by a non-resident litigant in a federal .

court instead of in a State court a block away shotid

not lead to a substantially different result.’’

If the decision of the court below is allowed to ‘stand, an

Illinois litigant seeking a détermination of whether the

landlord or the tenant must bear the burden of unforeseen

structural additions to the leased ‘premises will hereafter,

get a diametrically epposite result depending or whether

the state or federal forum is selected.

By the Kaufman case, the burden of providing a source.

of heat ‘where the outside utility discontinues service was

placed squarely upon the landlord, absent an express cov-

°®

‘lish the customer relation with the utility.

enant to the contrary or a warrant for a change in this

rule of liability that is ‘plainly discoverable.”’

In the case at bar, the burden’ of providing a sourge of

heat where the outsidé‘utility discontinues service is < af

squarely upon the tenant. The purported.justification for

’ this inversion of established and undisputed Illinois law

is the landlord’s refusal, during preliminary negotiations,

to ‘accede to the tenant’s request that the landlord estab-

The pivotal fact in the Kaufman case, however, was that

the failure of utility service was unforeseen when the lease

“was negotiated. No provision had been made for the con-

tingency. In the case at bar, the same essential facts are

pregent. It is admitted that no consideration was, given

during negotiations te the possibility that the utility might

discontinue service. No lease clause covered the obligation

beoslver i. none

Circuit Judge Swygert could find no basis in Ais dissent

to distinguish the holding of the zoe case. (App.

6-10)

What is the state of Illinois ried now?

Under Illinois law as decided by the Illinois courts, a

landlord who does not assume any codligation to supply

either heat or a source of heat at the time the lease is.

negotiated, has the duty to supply a heating unit where

the public.utility with which the tenant contracted obtains

permission to terminate service. Under Illinois law, ‘as

decided by the federal court, a, landlord whe is asked to

supply heat but refuses because there is a utility supply-

ing heat has no such obligation. This will be true even

though the utility failure never was discussed during ne-

gotiations and no lease clause purports to cover the con-

t 2

tingency. The distinction is completely without substance

and contrary to the clear intent of the Appellate Court of

Illinois which said ‘‘in order to shift on the tenant a burden

which would naturally fall on the landlord, the warrant for

the change should be plainly discoverable in the Jease.”’

(App. 24)

The language of the court in Yoder v. Nu-Enamel Corpo-

ration, 117 F, 2d 488 (8th Cir. 1941), is appropriate here

(p. 489):

‘*Indeed, under the implications of Erie Railroad Co. |

v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188,

114 A.L.R. 1487, and West v. American Telephone and

Telegraph Co., 61 S. Ct. 179,85 L. Ed. 139, where

direct expression by an authorized state tribunal is

lacking, it is the duty of the federal court, in dealing

with matters‘of either common law or statute, to have

regard for any persuasive data that is available, such

as compelling inferences or logical implications from

other related adjudications and considered pronounce-

ments. The responsibility of the federal courts, in

matters of local law, is not to formulate the legal mind

_of the state, but merely to ascertain and apply it. Any

convincing manifestation of local law, having a clear

root in judicial conscience and responsibility, wheth-

er resting in direct expression-or Obvious implication

and inference, should accordingly be given appro-

priate heed.’’

: 10

: CONCLUSION.

Erie v. Tompkins enjoins the federal court both from

_ overruling State Court decisions and from evading their —

clear implication. In the case at bar the effect of the fed-

eral court’s decision is to’ decide an important state ques-

tion in a way in conflict with applicable state law, to place

upon the tenant a burden Illinois law imposes on the land-

lord, and to make the choice of forum the pivotal factor in

determining the substantive rights of the parties in future

litigation.. We submit that this case is worthy of this —

Court’s consideratjon, and the exercise of its supervisory

powers, and we ask the Court to exercise its discretion in

favor of issuing its writ of certiorari to the United States

Court of Appeals for the Seventh Circuit, and thereafter

reviewing and reversing the decision of that Court. 2

' | Respectfully submitted,

Awan Raymon

Howagp BE, Kang

THomas W. MoNamara

Attorneys for F. W. Woolworth Co.

Tompson, RayMonD, Maver :

| & Jenna

135 South LaSalle Streét

Chicago 3, Illinois

PRAndolph 6-0220

Of Cownsel

February 11, 1963.

‘APPENDIX A_

Opinion of the United States Court of Appeals for the

Seventh Circuit filed October 22, 1962, reported at 310 F.

2d 350: ae

Before Hastinas, Chief Judge, and Kitey and Swycerr,

Circuit Judges. f

Key, Circuit Judge. dD;

This is a diversity declaratory judgment suit by the

tenant, Woolworth, for a declaration that defendant land-

lord was bound under a lease to pay the cost of installa-

tion of a heating unit made necessary by discontinuance

of the previous heating system. The court, without a jury,

decided against Woolworth and it has appealed. ~ ~

For many years prior to 1953, Woolworth rented from

the landlord the first floor of the Daniels building and

connected basement space of the adjoining Milner Hetel

in Danville, Illinois. The Illinois Power Company far-

nished steam heat to both buildings. Woolworth paid for?

its share of the steam, measured by a meter installed ‘by

the landlord. In March, 1953, the hotel-building was par-

tially destroyed by fire, and the Daniels building suffered

minor damage. , .

The lease in question was made July 1, 1953, for a term

of twenty-five years, covering the first floor of the Daniels

building and the first floor of the hofel.

Woolworth, under Article 15' of the lease, substantially

1 Woolworth agreed to make, at its .expense, “such alterations,

additions and changes.* * * as it deems necessary or convenient to

fit the same for its occupancy * * * .” The agreement covered ex-

tensive structural alterations, virtual reconstruction of the hotel

building,.and included among aher specific things “year around air

conditioning and ventilation.” - aAx

° .

Pes

App. 2 ae

rebuilt the leased premises..The Power Company continued

to furnish steam heat and Woolworth continued paying

its share of the cost. In 1957, Power Company noti-

fied Woolworth thet, with permission of the Illinois Com-

merce Commission, distribution of steam would be discon-

tinued effective June 1, 1960. Shortly thereafter, Wool-

worth installed a heating unit at a cost of $14,565.58." Its

suit is for a declaration that the landlord has the burden

of the cost of that unit. AS

The District Court decided that--the landlord had no

obligation to. install and pay for the heating plant. Wool-

- worth claims the court erred in finding that the parties

intended that the landlord should not have that duty; and

in refusing to apply Illinois law in its favor.

It is agreed that*the principle of decision in this case

is the intention of the parties. Although Woolworth seeks

to confine the basis for determining that intent to the

lease itself, it ,jntroduced testimony of the negotiations

between the parties, and the testimony was relied on by

the District Court in determining the question of intention.

The evidence submitted by both parties is that twice in

Weolworth’s preliminary drafts of the lease, its ‘‘superin=-

tendent of real estate’® submitted a proposal that the

landlord furnish, at landlord’s expense, seventy-two de-

gree heat from Sept&mber 15 :to May'15 each year, and

pihdideutini tants vebeed tweencat tes ecbindien. The

result was Article 18 of the lease which provided for.con-_ ;

tinufltion of the preexisting arrangement under which the

Power Company furnished the heat, paid for Jy Wool-

Sc enISII ii stiiin'yu 6 pce Nineties pectin

FA pe ages eed amr ada pommel oer

oe ra ene ann ae Ore tee tended tov

tions in three states.

i *

App.3 _ “2

‘warth, and the landlord installed and connected the meter.

Testimony, for the landlord was that this change in the

preliminary drafts was to avoid the heating obligation.

There was also testimony that Woolworth’s preliminary

draft sought to put on the landlord the obligation ‘‘to

make and pay for all necessary: repairs to the heating

plant.’’ That provision was ‘‘unacceptable’’ te the land-

lord and was not in the final draft of the lease,’ There is

testimony too that Woolworth’s superintendent. of real

estate and his predecessor, in memoranda, construed the

lease as imposing no greater burden of heating than the-

landlord previously had, and that Woolworth had the bur-

den of maintaining ‘‘t# heating plant.” _

The court inferred from the foregoing substantial evi-

dence that the landlord had refused to be obligated for the

heating; that the landlord’s state of mind was known to

Woolworth; that it drew the lease in the light of that

knowledge; and that the provisions of the final draft re-

flected the landlord’s, state of mind. We think the infer-

ences are not, clearly orrencems.

Based on those inferences, the District Court concluded

that the parties did not intend that landlord should have

the duty of installing or paying for the heating plant. We

no error in this conclusion. It was unnecessary for the

court to find, as argued hy Woolworth, that the parties

‘‘formulated’’ a mutual intention with respect to future

heating. It was enough if there was substantial evideuce

that the landlord expressed the intention not to be bound

and that» Woolworth’s conduct implied the intention that

the landlord was not to be bound.

‘We see tio merit to the argument that the court should

have found that even if the landlord had no obligation to

furnish heat ‘‘as long as the utility was supplying it’’ the

obligation arose when the Power Company’s services

Sue

{ oots

; al

ceased. The evidence was ‘‘we didn’t want to have any“

obligation to furnish heat.’’ (Emphasis added.) And the

landlord’s agreement to install the meter is another indi- ~

cation of the intention of the landlord not to assume an et

obligation for heating that did not exist under the prior

lease. Finally we see no merit in the contention that the

District Court erred in refusing to find that the installation

of the heating unit came within Article 22° of the lease so

° gs to impose on the landlord the cost of complying with

the order permitting a discontinuance of the steam service.

The District Court properly found that there was no order

directing either party here to install the unit.

Since we think the conclusion of Jaw based on the in-

ferences from the undisputed facts :is not erroneous, we

are of the opinion that the court did not err in refusing to

apply the decision in Kaufmdn v. Shoe Corporation of

America, 24 Ill. App. 2d 431, 164 N.E. 2d 617 (1960), a

‘*first impression’’ case, in favor of Woolworth in the case

at bar. Woolworth’s principal reliance is upon that case. ©

In view of the District Court’s inferences and conclu-

sions, there is little essential similarity between that case

and this. There a landlord sought to impose on tenant the

cost of installation of a heating unit made necessary by

the permissive order of the Illinvis Commerce Commission

that the Illinois Power Company could discontinue service.

The Illinois Appellate Court reversed a judgment for the

landlord, on the ground that inctolintion ‘ef the bepting

| xe gn ng sale pgltnne Tse apes f installations and repairs

as muy be necessary t © comply with uch laws, orders or require-

- :

App. 5

equipment, undég a proper construction of the lease, was ~

not the tenant’s obligation. The rule applied in Kaufman

was that a tenant’s lease obligation to repair does not

cover structural or substantial alterations or additions

made necessary by extraordinary or unforeseen events not

in contemplation of the parties at the time of leasing; and

that the landlord is ordinarily liable for those substantial

alterations or additions.

It i is important to note that the Kaufman nda was estab-

lished where there was no expressed“or implied intention

of the parties on the heating subject in question. The

court there was restricted to the confines of the lease itself .

and there was no testimony of preliminary negotiations.

There was no evidence of intention and. no basis for in-

ferring that the parties had ever contemplated that the

question would arise. The essential distinction between

Kaufman and the case at bar is that here we have evidence

and findings of the intention of the parties. The testimony

here shows that the landlord contemplated having no obli-

gation for future heating and stated that an obligation to

repair the heating plant was ‘‘unacceptable.’”’ This em-

braced any future event, and Woolworth knew it, or should

have known it at the time the lease was made. Wa can-

not read the Kaufman case as making it incumbent upon.

the landlord to expressly exempt himself in the lease from.

~ sucha liability where there is substantial evidence of in-

tention. This substantial evidence renders the rule of

ordinary liability of the landlord in that case inapplicable.

We have considered-all points and arguments necessary

for our decision. We hold that the District Court was

correct in deciding that the landlord had no —— to

pay for the heating plant.

For the reasons given, the Soeemens 1 is afiirmed.

Swycert, Circuit Judge (dissenting).

® es App. 6 ¢

‘te Kaufman v. Shoe Corp. ah shales: TR: Age. 2d

431, 164 N.E. 2d 617. (1960), as in the present case, the

leased premises had been heated by steam purchased -by

the tenant from the Illinois Power Company. After the.

utility notified the parties that it was going to discontinue

"steam heat service, the parties installed a heating unit sub-

ject to judicial determination whether it was the obliga-

tion of the landlord or the tenant to pay for the instailation.

“There was no lease provision as to heat. The lease did

provide that the tenant was to keep the premises in good

repair; however, it specifically exempted the tenant from

making any structural repairs. The court-ruled that where

a tenant agrees merely to repair, he does not bind himself

to make future additions of a structural adture made neces-

sary by unforeseen future events not within the contem-

plation of the parties when the lease was made. The bur-

‘den of patereecen expenses falls ordinarily on the |

landlord. | .

In holding the landlord in Kaufman liable for the cost

of the heating plant made necessary by the Power Com-

pany’s action, the court went on to say:

*“‘A general covenant of the tenant to repair, or to ~

keep the premises in repair, merely binds him to make

the ordinary repairs reasonably required to keep the

premises in proper condition; it does not require him

to make repairs involving structural changes. In or,

to shift on the‘tenant a burden which would natur‘all>

fall on the landlord, the warrant for the change should

be plainly discoverable in oor — ”” . (Emphasis

supplied. )

oe 7

Since we are bound under Erie Ry: Co. v. Tompkins,

304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), to follow

Illinois, decisional law, the pertinent question is whether

the facts in the)present case are — distinguishable

ia Keufmen. -

‘

App. 7

Before discussing the Paste, however, a further observa-.

tion seems appropriate. It is my view. that the rule laid

down in Kaufman should not be given the narrow inter-

e. pretation which the Court here seems to give it. I see the

rule as having a much broader application and would

‘hold that the requirement of the rule that ‘‘the warrant

~ ,for the change should be plainly discoverable’? applies with

- equal force’ to any evidence admitted at trial relating to

the intention of the parties.

Although there is a clause in the lease involved in the

- present case that obligates * Woolworth to purchase and

pay for the steam+it uses for heating and which required

the landlord to install a meter, there is no express pro-

vision that indicates who has the obligation to install a

heating unit. It is evident from the record that in the

negotiations of the parties prior to the execution of the

lease the real bone. of contention was whether the land-

lord or the tenant should purchase the steam from the

Power Company’ Woolworth wanted the landlord to pur-

‘chase the steam froin the utility and supply heat to Wool-

‘worth at Woolworth’s expense. ‘ The landlord objected.

Woolworth acceded to the landlord’s view and agreed to

' eontract directly with the Power Company.

_The fact that the provision in the original draft of the .

lease requiring the landlord to make repgirs to the heating

plant was deleted from the final draft at the insistence of

the landlord does not, in my opinion, justify an inference

that the. parties intended that Woolworth was to install a

heating plant. Kaufman recognizes that an obligation to

repair, strictly speaking, has nothing to do with the in-

stallation of a new structufal addition. This requirement

in the printed original draft was obviously superfluous and

inappropriate since #hert was no heating plant in the build-

ing at the time the lease was made.

oe?”

App. 8

Similarly, the printed provision in the original draft of

the lease requiring the landlord to furnish heat at a fixed

temperature, during seven months of each year was su-

perfluous and inappropriate since the landlord had no

control over the supply of steam being used. Naturally

the landlord did not/want to guarantee heat when he had

“no control over its supply. But this does not mean that it

was understood by the parties that, should the Power

Company discontinue service, the landlord would have no

_ obligation to furnish another source of heat as distin-

guished from furnishing the heat itself. Therefore, the

deletion of this provision does not give rise to an infer-

ence that ‘Woolworth was to install a heating plant should

unforeseen circumstances require this structural addition

to the premises.

The District Court buttressed its finding of the requisite

intent by referring to Article 15 of the lease in which

Woolworth was authorized to make such alterations, addi-

tions, and changes to the premises as it deemed necessary.

Reference to pertinent parts of this article. shed light on

how it should be interpreted so as to ascertain the true

intention of the parties. —

The first portion of Article 15 reads:

“Within thirty (30) days from the delivery of this _

lease, the Tenant agrees to proceed with: reasonable

diligence at its cost and expense, to make such altera-

~agage igs Somer Sy rien ates satire

partitiinn ground floor converting the entire

“Ay demined. pre eis iconic wet

‘ —

~™ +

App..9

extending the ground floor and seiaiinia into the pres-

~ ent light court areaway ; furnish and install year-reund

- air conditioning and ventilation; furnish and install

new store fronts across the front af ‘the ground floor

of the demised premises with stainless steel entrance

doors, all in accordance with Tenagit’s plans and speci-

- fications , Fe gee (Emphasis 8 jed.)

The bens was ER on July 1, 1953. The Illinois Power

Company did not notify Woolworth until J une 17, 1957

that it had been granted permission by the Illinois Com-

merce Commission to discontinue heating sérvice in Dan-

ville effective June 1, 1960. In order to operate its busi-

. ness, Woolworth had to make structural changes to the

burned-out portions of the building, and also had to “fit

the same for occupancy., It is evident that the only inten-

tion expressed in this article is that the construction work

necessary to permit Woolworth to occupy the, premises

as a store was to be performed at Woolworth’s expense

and for this the landlord was to reimburse Woolworth. This

work had to be carried out before the store was suitably

*fit for occupancy. Woolworth was to proceed with ‘‘reason-

able diligence’’ tg complete the work and:

“Upon completion, of such alterations, additions and

changes and the opening of Tenaxt’ s store for busi-

— mess in the entire demised premises, the Landlord .

agrees : within fifteen (15) days after demand there-

fore, to reimburse the Tenant in. the amount of One

Hundred Forty Thousand ($140,000.) Dollars, toward

the cost of such work.’’ (Ant. 15.) (Emphasis

supplied.)

Clearly, ‘this article anticipated only such structural

changes as were necessary to fit the premises for occu-

pancy. It is uncontradicted that for many yeiys after -

“occupancy a furnace was) not needed sinee a public utility

was supplying the heat. I fail to see how this article, :

takes App. 10

limited as it is as to time, can show, intention as to who

was to have the burden of installing a furnace should fu-

~ ture events make such installation necessary.

It is admitted that neither party*during the course of

the negotiations referred to the possible cessation of serv-

ice by the Illinois Power Company. It is also admitted that

, Woolworth never stated that it would install a heating

‘unit if one became necessary. Furthermore, it is note-

worthy that Woolworth made no provision in its design

specificatiens for future installation of a furnace in ihe

renovated building. Finally, there is no evidence that

Woolworth was aware of the rumor that the Illinois Power

_ Cémpany was going out of business. If this rumor was in

the mind of the landlord, it was never the.subject of the

negotiations which the partice had prior to ‘the execution

of the lease. . :

The District Court relied solely on inferences gleaned

from the nuances of language in the lease provisions and

the prior negotiations of the parties in finding a mutual

intention that Woolworth is obligated to instellthe heating

plant. These inferences, in my opinion: are far too tenu-

ous to warrant a determination, implicit in the finding,

that the shift of the landlord’s burden to the tenant is

‘‘nlainly discoverable’’ either in thé lease itself. or in the

prior negotiations of the parties. |

In applying the rule of Kaufman, which I think is neces-

sary, I fail to see how the defendant in the instant case

carried its burden of showing that the parties intended

plaintiff to assume the normal obligation of the landlord

to make a major structural addition to the leas& premises.

Accordingly, I believe the District Court’s finding as to the

intention of the parties is clearly erroneous.

For these reasons I respectfully dissent. I would reverse.

f ~

‘

APPENDIX B

- Opinion of the United States District Court for the East-

_ ern District of Illinois filed January 10, 1962, The opin-

ion is not reported.

OPINION BY THE HONORABLE rae PLATT.

This is an action by F.-W. Woolworth, lessee, against

. .Henri A. Meis, Trustee, owner, to recover $14,065.48, which

_ was the amount expended by it to install a heating plant

.in the leased premises.

The parties introduced evidence of the circumstances .

and negotiations leading to the execution of the lease.

Prior to 1953 F. W. Woolworth leased the first floor and

basement of a four story building on Vermilion Street in

Danville, Illinois, for a retail variety store. Included in

the lease was the connecting basement in the Milner Hotel

building on Main Street which connected in an ‘‘L’’*shape

on the rear of the Vermilion Street location. The

60 premises were heated .by steani furnished by the Hli--

nois Power Company. The amount of steam used by .

the plaintiff was measured by a common meter and Meis

billed Woolworth monthly for an agreed persegiage of

‘ the heating cost.

ie destroyed the Milner Hotel building in March,

1953. Shortly thereafter negotiations started for a new

lease whic) was to include the rebuilt Milner Hotel‘ and

the Vermilion Street site. Mr. Thorpe, who was super-

dent of real estate for F. W. Woolworth in its Chicago

oif@e, was the principal negotiator for Woolworth. The

surstiony of the ChicagaPoffice included the major portion

of Illinois, Indiana “and Mi igan, and it contained over

two hundred (200) Woolworth stores. The negotiations

ae / | App.12 _ te ;

were conducted for the defendant by Mr. Henri A. Meis,

Mr. Horace E. Gunn, his atterney, and Mr. Raymond Rose,

an accountant and attorney employed by Meis Bros. Mr.

Edwin H. Anderson participated in a part of the negotia-

tions as superintendent of construction for Woolworth.

The lease on the premises was finally executed by the

parties.as of July 1, 1953, for a term commencing July 1,

1953, and ending on April 30, 1978, with an option on the

part of Woolworth to renew for an additional ten years

~~ at an annual minimum rental of $32,500.00.

The Illinois Power Company was furnishing steam heat

for the premises and on June.17, 1957, notified the plain-

“tiff that it had been granted permigsion to discontinue

61 heating service-jn, Danville, Illinois, effective June 1,

1960, by the Illinoié Commerce Commission. This re- ’

quired the. installation of the controversial heating plant

to make the premises suitable for use as a retail store.

‘Paragraph 12 of the complaint which is admitted by the

answeg sets forth:

‘‘Pursuant to written stipulation of the parties dated

July 6, 1960, it was agreed that, sinc: the plaintiff and

defendant were in dispute as to who had the obligation

of installing the new heating unit, plaintiff would

proceed to install a new heating system prior to the

heating season which would commence approximately

. September 15, 1960 and advance the cost thereof, with

the understanding said installation would _ be

» without prejudice to th t of plaintiff to seek rcim-

bursement from the defendant for the cost of said

installation, and without prejudice to the right of the

defendant hsm that. he was not iiable for such

cost.’’

The preliminary draft of the lease submitted by Thorpe

contained :

App. 13

‘‘Art. 19. The Landlord agrees at Landlord’s ex-

-pefise to furnish to the demised premises sufficient heat

during Tenant’s usual business hours to maintain

therein a temperature of 72° from September 15th

until May 15th of each year. The Tenant agrees to

pay Landlord monthly fer such heat at the usual rate

established by the local utility supplying such heat.’’

62 Meis refused to accept such a clause. | Rose testified

that at a meeting with Thorpe ‘‘we said we would not

agree to that; that it was objectionable to us, that we didn’t ,

want to have any obligations to furnish heat.’’ ‘ Thorpe

redrafted the lease but failed to modify this Article. His

attention was again called to the objection by Gunn and he

submitted the modification which reads:

“nm °**

“The Landlord agrees at Landlord’s expense to

install and connect an adequate separate meter for

the purpose of measuring all steam for heat consumed

by the Tenant in the demised premises. The Tenant

agrees to purchase and pay for the steam indicated by

said meter to have been consumed by the Tenant from

the public utility to which the demised premises are

connected.’’ ase

Woolworth would ignore the change in this Article, and

give no effect to the omission ‘‘to furnish to the demised

‘ , premises sufficient heat....’’ Article 19, as well as Arti-

cle 18, provided that Woolworth was to pay for the heat.

Rose expressly stated the reason for the modification was

to eliminate the obligation to furnish heat. Thorpe did

not appear at the trial. The change in the wording of this

Art&le and Mr. Rose’s statement should have made Thorpe

aware that Meis would not be obligated to furnish‘ heat.

63 There was also a change from the original draft of

the lease in Article 20, which read:

)

App. 14

‘¢Art. 20. The Landlord agree[d] to make and pay

for all repairs, structural or otherwise, to the exterior

of the building . . . of which the demised premises

are a part, including but not limiting said repairs to ~

\ the streets, curbs, sidewalks and alleys, and also to—

\ make and pay for &ll repairs to the interior of said

\ building which may be of a structural nature .. . and

\also to make and pay for all necessary repairs to the

, heating — and such other, repairs,’, structural or

_ otherwise. . . .’’ (Emphasis supplied.)

| Defendant’s Exhibit 4, being a letter from Thorpe to Meis,

states: .

In Article 20, delete ‘streets, curbs and alleys’ in

the third line, and in the 5th and 6th line, delete ‘to the

heating plant and such, other repairs,’ and adding

the ¢nd of paragraph 2\from the premises owned or

controlled By the Landlord.’’ (Emphasis supplied.)

From this quotation, coupled with the change in the pro-

vision to furnish the heat, Woolworth knew or should have

known that Meis was not going%o be bound to furnish heat

if it became necessary due to the discontinuance of steam

service by the Illinois Power Company.

64 It must have been known to both parties that the

- Illinois Power Company, as a public utility, was con-

trolled by the Illinois Commerce Commission. It could

permit Illinois Power Company to discontinue an unprof-

itable part of its business. Neither Woolworth nor Meis

could control this situation. Meis festified that there was

a ‘‘well-founded rumor’? i in Danville that the Illinois Power -

Company might tinue the steam heat service in

Danville, but speci | this was not mentioned in the

negotiations. Since Thorpe and the mai::ger of the Wool-

worth store failed to appear as witnesses, the evidence

does not disclose whether Woolworth knew of this a &

tig

App. 15

No explanation was offered by W ouhwerth as to why its

store manager and Thorpe did not testify that they had

no knowledge of the rumor, and the presumption could be

that one or both of them knew of the rumor. Cf. Morris

v. Pennsylvanigg R. Co., (1956) 10 Ill, App. 2d 24, 33.

Thorpe was not naive in negotiating leases. He was the

superintendent of real estate for Woolworth and leasing

premises was his business. Whether Woolworth knew of

the ‘‘well-founded rumor,’’ it should have known that the

Illinois Power Company could disvontinue furnishing heat

with the consent of the Illinois Commerce Commission.

65 Another important provision of this lease relative

to the issues in this case is:

‘‘Art..15. Within thirty (30) days from the deliv-

ery of this lease, the Tenant agrees to proceed with

reasonable diligence at its cust and expense, to make

such alterations, additions and changes to the demised

premises as it deems necessary or convenient to fit, the

same for its occupancy, included but not limited to

the following, remove second, third, and fourth floors

of that portion of the premises at 11-13 W. Main Street,

formerly known as the Milner Hotel property, con-

verting the same to a one-story and basement building;

remove partitious on the ground floor converting the

entire demised premises into a single enlarged sales-

room, extending the grgund floor and basement. into

the present light court areaway; furnish and install

year-round air conditioning and ventilation; furnish

and install Magnesite Terrezzo floor and, fluorescent

lighting in the ground floor sales area, and furnish and

install new store fronts across the front of the ground

floor of the demised premises with stainless steel en-

trance doors, all in.accordance with the tenant’s plans

and specifications and subject however to all applica-

ble, Federal and State Municipal Laws and Regula-

tions and in compliance therewith. Anything herein

to the contrary notwithstanging, the Landlord agrees

Nog

ne —

66 -‘*Upon completion of such alterations, additions and

and the opening of Tenant’s store for business

in entire demised premises, the Landlord =

within fifteen (15) days after demand therefore, to

reimburse the Tenant in the amount of One Hundred

Forty Thousand ($140,000.) Dollars, toward the cost .

of such work.”’ ; 8 |

Thus, it was Woolworth’s obligation to ‘‘fit’’ the demised

premises for its occupancy, with no control by Meis as to

what ‘“ ! additions and changes’’ were to be

made. Meis was not required to do anything to make the

premises tenable for, Woplworth, except that upon ‘com-

pletion of the ‘‘alterations, additions and changes,’’ and

within fifteen days after demand was made, to pay

$140,000.00 toward the cost of the work. The lease was for.

a term of twenty-five (25) years, with an additionai ten

(10) years at the option of Woolworth. Woo!worth knew

that during the period of its tenancy it would require the

premises to be heated. Meis had refused to be obligated

to furnish heat. If Minois Power shut off its service a

heating plant would be a necessity. Under Article 15,

Woolworth accepted the premises in the condition that

existed after fire had destreyed the Milner building, and

agreed to ‘‘fit’’ the premises for its occupancy during the

-term of the lease.

“—~ 67 The lease included the entire Milner building when

rebuilt, the ground floor and basement of the Vermilion

App.17

Street site, except the two entryways to the three upper

floors. . (Schedule A-1 of the lease.) Anderson testified

that he prepared the plans and specifications for Wool-

worth, and that the heating plant was installed in the in-

a room; that this space was made available because

the ¢ity of Danville refused to permit the installation of

an incinerator. Meis, although he still had the three floors

above the ground floor on Vermilion Street, had no right.

to install a heating plant in the demised premises under

the terms of the lease. It seems obvious that had Meis

intended to be obligated to instal] a heating plant in the

basement he certainly would have reserved a space in the

demised premises for the heating plant.

Woolworth contends that the facts in the instant case

are similar to the facts in Kaufman v. Shoe Corporation .

of America, (1960), 24 Ill. App. 2d 431, aid that this Court

should follow the decision in that case. In the Kaufman

case, the premises were rented for twenty-five (25) years

commencing July 1, 1952. The lease was executed in

1949. At the time the lease was executed the premises

were heated by steam furnished by Lllinois Power Com-

pany. The cost of the steam was paid by the tenant.

68 The Illinois Power Company' was permitted in 1958

to discontinue furnishing steam in Champaign, Illinois,

where the premises were located. The landlord installed

the heating plant and was attempting to recover the cost

of installation from the Shoe Corporation, the tenant. The

- trial court held the tenaiit was obligated under’ the lease

to install a heating plant, and if a chimney or flue were

required, the landlord should pay for these structural

_changes. The leave required the tenant to keep the build-

ings and improvements in good repair, but did not obli-

gate the tenant to make any. structural repairs. “The land-

lord contended, that based upon the tenant’s covenant to

repair, it was required to install the heating _ The

App. 18

Appellate Court reversed the trial court, and held that the’

landlord was obligated under the lease to pay the entire

cost of the heating plant. At page 435 the Appellate Court

said: |

‘*Certain fundamental principles aid us in deter-

mining the question before us. An express covenant

to repair will not be enlarged: by construction. Holly-

wood Bldg. Corp. v. Greenview Amusement Co., 315

Ill. App. 658, 43 N.E. 2d 566. Where the parties to a

lease of real property have expressly covenanted as

to repairs, the express covenant takes the place of any

implied covenant and becomes the measure of liability

of the respective parties. A general covenant of the

» tenant to repair, or to keep the premises inf repair,

merely binds him to make the ordinary repairs reason-

69 ably required to keep the premises in proper condition ;

it does not require him to make repairs involving strue-

tural changes. In order to shift on the tenant a burden

which would naturally fal! on the landlord the warrant

for the change should be pleinly discoverable in the

lease. 51 C.J.S., Landlord and Tenant, See. 368.

‘*Where a tenant covenants merely to repair and _

the alterations or additions to the premises are of a

structural or substantial nature and are made neces-

sary by extraordinary or unforeséen future events not

within the contemplation of the parties at the time

* the lease was executed, the landlord i is ordinarily held

liable for such alterations or additions.”’

This Court is of the opinion that Kazfmen v. Shoe Cor-

poration of America, supra, is uot persuasive here. In

the instant case the terms of the lease were different fron

the terms of the Igase in Kaufman. Furthvrmore, the

parties intreduced in evidence the condition of the prem-

ises before the lease was executed, and the negotiations

leading to the final draft of the lease. No such evidence

appears in the Kaufman case. The instant case is clearly

distinguishable on the facts and terms of the lease, and in

particular Article 15, wherein Woolworth covenanted :to

App. 19

make structural ‘‘alterations, additions and changes.’’ It

is not a situation where the tenant merely covenanted to

repair and where ‘‘the landlord is ordinarily held liable

for such alterations or additions.”’

70 Woolworth further contends that Article 22 of the_

lease should be construed as a covenant on the part

of the defendant to install a heiting plant. Article 22

provided in part as follows: ;

‘*The Landlord agrees that if any federal, state or

municipal government or any department or division

thereof has or hereafter shall condemn the building

of which the demised premises are a part as unsafe or

as not in conformity with the laws and ‘regulations

relating to the use, occupation and construction there-

of, or has ordered or required or shall hereafter order

or require any rebuilding, alteration or repair thereof

or installations Merein, the Landlord will immediately

at Landlord’s own cost and expense rebuild or make

such alterations, installations and repairs as may be

necessary to comply with such laws, orders or require-

ments... .’’

There was no governmental order directed to either Wool-

worth or Meis which required a heating plant, nor was

there any particular kind of fuel ordered to be used, as was

the order in Belmont Hotel, Inc. v. New Jersey Title and

Guaranty Cof%, (1945), 132 N.J.L. 403, 40 Atl. 2d 778. The

order of the Interstate Commerce Commission could go no

further than to permit the Illinois Power Company to dis-

continue furnishing steam.

The Court in determining the issue in this case has re-

viewed the pertinent provisions of the lease in order to

construe the lease, and to carry out the intention of the

parties. The primary object in construing the lease is

to determine and give effect to the intention of the

71 parties. Sixty-Third ¢ Halsted Reaity Co. v. Goldblatt,

* (1951), 342 Ill. App. 389. The parties have aided the

App. 20

Court by offering in evidence, without objection, parole

evidence of the circumstances at the time the lease was

executed, and the negotiations leading to the execution of

the lease in its final form. The Court. has given weight

fo these circumstances and negotiations, and has placed

- itself in the position of the parties at the time-of the nego-

tiations. There was deleted from the original draft of the

_ lease the provisions that Meis would furnish heat and -

repair the heating plant. Such omissions are of import-

ance in ascertaining the intention of the parties when con- .

sidered with the particular article which appears in the

lease. Seulerecki v. Oppenheimer, 1918, 283 Ill. 525, 532.

*Moreover, if it had been intended that Meis would install a

heating plant the parties would have reserved space by

the terms of the lease for its installation. When Article

15 of the lease is considered, the intention of the parties

becomes more obvious. In Article 15 Woolworth agreed

‘to make such alterations, additions and changes to the

demised premises as it deem[ed] necessary or convenient

to fit the same for its occupancy, included but not limited’?

to certain improvements ‘‘in accordance with [its] plans

and. specifications, ’’ and Meis agreed ‘‘to reimburse

[Woolworth] in the amount of One Hunéred Fort?

72 Thousand ($140,000.00) Doiiars, toward the cost of

such work.’’ The improvements cost $143,615.00. It

is a logical conclusion, based upon. ail the evidence and the —

terms of the lease, that the lease should be constrned to

obligate Woolworth to install and pay for the heating

plant in the event it became necessary to make oat premises

suitable for its occupancy.

This opinion may serve as findings of fact and conclu-

sions of law. Final judgment in accordance herewith will

be entered.

Dated this 10th day of January, 1962.

App. 21

APPENDIX C

Opinion of the Appellate Court of Illinois, Third District,

‘in Ethel B. Kaufman ¥2 Shoe C orporation of America, an

Ohio corporation, filed February 18, 1960, reported at 24

Ill. App. 2d 431, 164 N.E. 2d 617:

Jupce Rorrn periverep THE Opinion or THE Court.

This. is a declaratory judgment action to declare the

¢ rights of the parties ander a written lease. There is

no factual dispute and the questions involved are pre-

sented by the pleadings.

“In October, 1949, ‘the plaintiff and defendant entered

into the lease here ih question, by which plaintiff leased

certain premises in the City ef Champaign, for use as a

_ stote, to the defendant for a period of 25 years commencing

~ | on July 1, 1952, arftl ending on June 30, 1977. The specified

rental for the term was $500,000 payable at the rate of

$20,000 per year in equal monthly ‘payments. At the time |

~this lease was executed the building was heated with steam

furnished by’and purchased from Illinois Power Company.

The steam was brought to the building by Illinois Power

Company and then circulated through the ‘building by .

means of radiators and other fixtures. Cost of ‘the steawn .

was paid for by the tenant. In 1958 the Illinois Power

Company obtained authority from the Illinois Commerce —

« . Commission to discontinue the steam heat service in Cham-

-.péign: - The Illinois Power Company then notified the

plaintiff and defendant that as of May 1, 1959, it would

‘discontinue furnishing steam for heating purposes, Such

action by the power company ‘made necessary the installa-: °

tion/in the building of some type of heating equipment if

the building were to be continued to be used as a store

building. The tria] court held that the duty to install the

& e

Se. - App. 22 |

: : ©

heating equipment devolved upon the defendant, except

that if'a chimney or flue was required, these items consti- _

tuted structural changes, the cost of which should be borne

by the plaintiff. Upon oral argument of this case in this

court, it was disclosed by counsel that because of the exig-

- - eneies of the situation, the heating equipment had been

installed under an agreement that liability of the plaintiff

or defendant fcr the cost thereof would abide the outcome .

of this case. The basic question is whether the tenant is

ted to install this heating equipment under the terins

of its lease. Both counsel agree that the question here

presented is without precedent in Illinois.

The provisions of the lease which it is contended bear

upon a solution of this problem are as follows :

‘The Lessee further agrees that neither the demised

premises nor any building at any time situated thereon,

or any part thereof, shall be used for any unlawful pur-

pose, or for any purpose in violation of any lawful regu-

lation, and that during the-said term thé demised premises,

and every part thereof, and the buildings and improve-

ments thereon, ‘shall be kept by thé “Lessee in-good re-

pair, and in a clean, wholesome, insurable and rentable

' condition, and that all health and police regulations in

all respects, and at all times, shall be fully complied with

by the Lessee, and that all sidewalks and areas in front —

and in the rear of said premises shall be-kept by the

Lessee safe, secure and corfort to all lawful require-

ments, provided, hewever, t the Lessee shall not be

required to make any structural repairs and the Lessee

agrees to save and keep harmless the Lessor at all times

against any loss, damage, ‘costs or expenses which may be —

; oceasiqned by any failure of the Lessée to comply with any

of the provisions of this lease, or which may result from

any accident or injury or damage to person of property,

, App. 23

‘and happening or done in, upon or about the demfied

premises, or resulting from any act or thing doné- or

emitted to de done upon said premises, or any building ~

at any time situated thereon, or which may be due to any

use or occupancy which may be niade thereof.’’

[1] It'is first contended that the obligation on the.

part of the defendant to install the heating equipment is

covered by the provision above,. by which the lessee cdve-

nants to keep the premises in good’ repair. The word ré-

. pair in this clause has its ordinary meaning as given in

Funk & Wagnall’s New Standard Dictionary, to-wit:

' <vestoration after decay, waste, injury or partial destrue-

tion; supply of loss; reparation. It does not include al-

terations or additions. Hacken v. Isenberg, 288, Tl! 5@;

124 N.E. 306. The word ‘‘repair’’ involves the idea of

“something pre-existing and presupposes something in e&-

istence tobe repaired, or the existence of the thing to be

Keepaire. 76 C. Je af p. 1178, ( Roper.) “Applying these

definitions to the words ‘repairs’? and ‘structural re-

, pairs’’ as contained in the foregoing clause, it would initial-

ly appear that under a strict construction, the installation

of new heating equipment‘ could not be classified as either

a ‘‘repair’’ or “structural repair.”’ If a thing cannot be -

classified as a ‘‘tepair’”’ in the ordinary sense it would

follow that it could not be a ‘‘repair’’ in the specific sense

of being designated as ‘‘structural.”’ :

[2-4] Certain fundamental pines aid us in deter-

mining the question before us. An express covenant to

repair will not be enlarged by construction. Hollywood

Bldg. Corp. v. Greenview Amusement Co., 315 Ill. App.

658,.43 N.E. 2d 566. Where the parties to a lease of real

property have expressly covenanted as to repairs, the ex-

press covenant takes the place of any implied covenant and

becomes the measure of liability of the respective parties...

| App.'24 |

A general covenant of the tenant to repair, or to keep the

premises in repair, merely binds him to make the ordinary

repairs reasonably required to keep the premises in proper

condition; it does not require him to make repairs involv-

ing structural changes. In order to shift on the tenant

a burden which would naturally fall on the landlord, the

warrant for the change shoyft be plainly”discoverable in

. «the lease. 5] C..J.S., Fandlord and Tenant, Sec. 368.

(5): Where a tenant covenants merely to repair and

the alterations or additions to the premises are of a struc-

tural or substantial nature and are made necessary by

extraordinary or ui¥oreseen future events not within the

contemplation YE the parties at the time the lease was exe-

cuted, thé landlord is ordinarily held liable for such al-

terations or additions. In Ingalls v. Roger Smith Hotels

Corporation, 143 Conh. I, 118 Atl. 2d 463, the lessor leased

premises for hotel purposes for a 14-year term. The lease

provided that the lessee covenanted to keep the interior

and exterior.of the demised premises in adequate, proper

and satisfactory repair at the expense of the lessee, pro-

' vided the lessee shall be under no obligation to rfke struc-

‘tural alterations or repairs. Some 4 years after.the execu-

tion of the lease the General Assembly authorized the. state.

fire marshal to establish a fire safety,code. Pursuant to

thts authority the fire marshal prepared a code and sub-.

sequently notified the hotel that some 17 items of work were:

necessary if the hotel was to comply with the code. The

largest single item was the installation of an automatic.

sprinkler system throughout thejhotel, The question arose

y in this case as to who should be required to pay the cost

_ of the work. -The court held that the work did not fall ’

\..-hin the tenant’s covenant to repair and without passing

upor the obligation of the landlord under the provision

above noted as te structural alterations or repairs, held

the landlord liable noting ‘‘the court erred in imposing

/ »-

“App. 25 a

upon the defendant ( tenant) the duty of paying for any

of these items, since the lessee is not required to absorb

the cost ‘of dreating something new.”’ (eraphasis sup-

- plied.) ae adh

In Belmont Hotel, Inc. v. New Jersey Title Guarantee

& Trust Co., 132 Nu. 403, 40 ‘Atl. 2d 778, the lease was

- for 10 years, and provided that the tenant was to make

all repairs and deliver up the premises at the expiration

of the term in good condition, reasonable wear and tear

and damage by the elements only excepted. °

The heating plant burned fuel oil. Subsequent to the

execution of the lease and during the war period, because -

of a searcity of fuel oil, federal authorities ordered con-

version to coal as fuel which required the 4nstallation of

new heating equipment. In making the conversion it be-

came necessary to make certain changes, to install storage

bins, coal chutes and an automatic stoker and it was neces-

sary to employ an engineer and éentractor. -The landlord

‘refused to make the change’, and the tenant had them

made and stied the landlord to recover the cost.

~The court held that the landlord was liablé for the cost

of the changes. It said: “

‘*The learned trial court concluded that the conversion

of the heating system from fuel oil to coal burning did not

constitute a repair, or maintenance within the meaning’ of

the lease, which was the tenant’s obligation, but was a

structural change, the obligation for which was the land-

lovd’s. We concur with = eg view.”’

In Hordd Square Realty Cox. Saks é C0.,° 215 N.Y.

427, 109 N.it. 545, an owner of premises, pursugnt to an

agreement, erected a building for a seedy ihr wide for

use as a department store. The plans, which indicated a

slight projection of display windows beyond the building

mye App.26 4

line into street lines, were approved by the commissioner

_ of buildings. At the time the plans were approved and

_ for many years prior thereto it was the policy and com-

mon practice of the authorities to permit and sanction such

slight projections of buildings beyond building lines. After

the erection of the, building a 20 year lease was entered

into. The lease provided that the tenant would keep ‘‘the.

demised premises and every portion thereof, inside and

8 years after the execution of the lease there was a change

_” of municipal policy and the parties to the Tease were di-

rected to remove the encroachment. The question in-

volved wag-whether the landlord or tenant should bear the

cost of this removal. In holding that the landlord should

bear the cost of removal, despite the provisiqns of the

lease aforesaid, the court observed:

‘*Here the. tenant is sought to be charged with the ex-

pense of making an impoftant and permanent structural

change in the building occupied by him. This burden is

one that usually falls upon the owner, and if ‘it is to be

shifted to the tenant the warrant for the change should

be plainly discovéfable in the lease. We can find in the

lease no indication tha®this was the intention of the par-

ties, . .. The language of this- lease, construed in the light

of contemporaneous : regulations, usages, and- customs,

seems to require the conclusion that it wag not the purpose

of the parties to subject the tenart to an expense caused

wholly by extraordinary and unforeseen building altera-

tions made necessary by a subsequent and radicdl change

in the policy of the municipal government, and we are

brought to this conclusion despite the forceful argument of

counsel for the plaintiff, in which he contends that the ex-

pense of complying with the order of ‘the borough presi-

dent, directing the removal of the show windows, comes

within the very letter of the lease. We think that this

App. a6

om , >

extraordinary expense was not in the contemplation ‘of

the parties when this lease was made.” emphasis sup-

plied. ) .

[6] Attention is called to an annotationpin 33 A. L.

R. 530 and supplements thereto in which similar -cases

may be found holding that comparable additions or changes

do not fall within a ames s covenant to repair. From

‘the foregoing we ggnclude that the covenant df the de-

fendarit, in the case at bar, to keep the premises in re-

pair, does not = it to pay the cost of the heating

equipment, °

It is contended that the provision requiring the defend-

ant to keep the premises in a rentable condition is broad

_ enough to obligate the defendant to install the heating

equipment. But this provision must be considered in con-

nection with the langnage that precedes’it. We are of the

opinion that the proper construction is that the tenant is

required to make such repairs as will keep the premises in

a rentable condition, inat is, the-ordinary repairs reason-

ably required to keep the premises in proper condition and

prevent waste and decay.

[7] Plaifitiff seizes upon the. language’ above; to-wit: .

‘‘and the Lessee agrees to save and: keep harmless the

Lessor at all times against any loss, damage, costs or ex-

penses ... resulting from any act or thing done or gmitted

to be done upon said premises, or any building at any time

Situated thereon,’’rand contends that the heating facilities

are an expense occasioned or resulting from a thing ‘done

upon said ptemises. This contention takes the language

out of its true context. When the whole clause is considered

it is apparent. that what is intended is an indemnification

of the lessor against loss caused by default of the lessee .

or by reason of any accident occurring upon the premises,

whether through active negligence or — omission.

¥ a

- &

; App. 28

We are therefore of the opinion that the trial court erred

in construing the lease in question to-require the defend-

ant tenant to furnish the heating equipment. The order

should have required the plaintiff to install the heating

_equipment and any chimney, flue or other structure neces-

sary to properly operate the same. om

Accordingly the judgment of the Circuit Court of Cham-

paign County is reversed and the cause is remanded with

directions to enter a judgment. in accordance with’ this

opinion.

Reversed and remanded.

Reyrnotps, P. J. and Carro.u, J., CoONCUR.

, ©

ot o

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