Hatsunosuke Sakata v. Y. Yoshikawa

OPINION OP THE COURT BY WATSON, J. This is an appeal from a decree of a judge of the first circuit court, sitting at chambers in equity, sustaining a demurrer to complainant’s third amended bill of complaint in a suit for the specific performance of a leasehold agreement and dismissing the suit. The demurrer was interposed upon several grounds, one of which was sustained, viz., that it nowhere appears, except'inferentially, just what the oral agreement was-the specific performance of which is sought in this suit. The bill, by paragraphs, avers: (I) jurisdictional facts as to the residence of the parties; (II) that prior to the eleventh day of February, 1913, complainant, as lessee, and respondent, as lessor, entered into negotiations for a leasehold agreement for — 289 — a term of ten years, at a rental of $30 a month, of certain premises on Emma street in the city and county of Honolulu; (III) that in pursuance of said negotiations the said lessor, respondent herein, had his attorney prepare a typewritten memorandum in duplicate of such leasehold agreement (so being negotiated), a, copy whereof was presented hy said lessor to lessee, complainant herein, on date of February 11, 1913; that at that time lessee paid to lessor the sum of $30, rent for one month from date of February 1, 1913, for the payment of which amount the said lessor gave his receipt in writing (a copy of said so-called leasehold agreement, the same being an indenture of lease in due form, is attached to complainant’s bill of complaint as an exhibit and by reference made a part of the complaint) ; (IV) that said memorandum of leasehold agreement so prepared by lessor’s attorney and by said lessor presented to lessee fully and accurately set forth all the terms and conditions of said leasehold agreement, and the premises therein described are the premises pointed out by the lessor to the lessee as the premises upon which lessee was to enter; (V) that prior to the time when the lessor had his attorney prepare the aforesaid typewritten memorandum of leasehold agreement respondent had purchased lumber and had the same hauled to the premises described in said agreement and had employed a carpenter to tear away the old building in preparation for a new building and had already procured a building permit for a new building; that at the time of the negotiations for the leasehold agreement it was agreed between lessor and lessee that complainant should pay respondent the cost of this lumber and the hauling of the same and should pay the wages of the carpenter for tearing away the old building and should pay the cost of the building permit, and that complainant should erect the new building theretofore contemplated hy respondent; that this agreement last aforesaid was no part of the leasehold agreement, nor were such payments to respondent and the construction of the new building to be a condition precedent to the execution by lessor of — 290 — the leasehold agreement; (VI) that upon payment of the rent for the month of February, 1913, lessee forthwith entered upon the demised premises; that he paid to lessor the cost of the lumber and of the hauling of same and the cost of the labor of the carpenter for tearing away the old building, and the cost of the building permit, in the aggregate sum of $227, and that, relying on the promise of lessor to execute the typewritten memorandum of leasehold agreement, lessee purchased other and additional building material and proceeded to erect and did erect one new cottage on the leased premises and did make repairs to the buildings theretofore standing upon the demised premises at an aggregate cost and reasonable value of $794, which sum includes the $227 paid by lessee to lessor as aforesaid; (VII) that complainant paid the rent as provided in said leasehold agreement, to wit, the sum of $30 per month, and that lessor accepted and receipted for the same, up to and including the month of June, 1913; also that lessee paid the lessor the water rates, sewer rates, taxes and insurance for three years in advance in the aggregate sum of $38.15; that after the month of June, 1913, and the payments by lessee to lessor as aforesaid, and after the completion of the improvements and the expenditure by lessee upon the demised premises lessor refused to accept further payments of rent and after said month of June, 1913, refused to execute said typewritten agreement and notified lessee to vacate the demised premises; that on August 8, 1913, lessor brought an action against lessee in the district court of Honolulu for summary possession of the demised premises, which action was dismissed at the instance of lessee because of insufficient notice to vacate, as required by statute; that thereafter, on November 19, 1913, lessor served on lessee a notice in writing to vacate, a copy of such notice being attached to complainant’s bill as exhibit “B;” (VIII) that complainant has deposited in the court in this suit for the benefit of lessor all rents accruing subsequent to the month of June, 1913; (IX) that on February 11, 1913, the date of the delivery by lessor — 291 — to lessee of tlie typewritten leasehold agreement, lessor promised to execute said instrument and gave as his excuse for not doing so on that day that he tvas too busy to go to the office of his attorney; that at the time of the subsequent payments of rent lessee requested the execution of said agreement hut lessor again gave as his excuse that he was too busy but said he would execute the agreement; that lessee was in possession of the demised premises and that it was just as good as if he, lessor, had signed the lease; that complainant has executed and delivered to lessor a copy of said typewritten memorandum of said leasehold agreement; (X) that if lessor is not required to execute said leasehold agreement as prepared by his said attorney and if lessee is removed from possession of the demised premises he, lessee, will suffer great and irreparable injury; that he has no complete and adequate remedy at law and that lessor is not able to respond in money damages in an action at law; that lessee can have no other full and complete relief than hy the performance of said leasehold agreement by lessor. The prayer of the bill is that the lessor may be ordered to execute said typewritten memorandum of leasehold agreement, and for general relief. In considering this appeal it is only necessary for ns to pass upon the one question whether the complaint sufficiently states the agreement sought to be enforced. We are of the opinion that it does. There is an allegation that on February 11, 1913, the respondent, pursuant to prior negotiations had with the complainant, had drafted by his attorney and in person delivered to complainant a leasehold agreement (lease) which he promised to execute. Complainant, upon the delivery of such draft, paid the rent reserved thereunder for the first month, toot possession of the demised premises and made permanent improvements thereon “relying on the promise of the lessor that he would execute the leasehold agreement.” The acts performed by complainant were exclusively referable to the contract. Veeder v. Horstmann, 83 N. Y. S. 102; Cooley v. Lobdell, 153 N. Y. — 292 — 596, 602; Browne, Statute of Frauds, §458. Complainant thereafter executed and delivered to respondent a copy of said agreement. It is alleged that complainant entered and held full possession of the premises until June following the delivery of the draft to him in February, paying rent therefor according to said agreement, but respondent neglected (without refusing) during that time to execute on his part the lease so tendered by him when lessee took possession, and at the expiration of five months respondent refused to execute such lease, refusing to accept further rent thereunder, and demanded that complainant vacate the premises. Respondent, when he delivered possession to the complainant, must be taken to have done so on the terms of the draft-agreement which had been delivered by him to complainant. There is, therefore, a sufficient allegation of the terms of the agreement. Pain v. Coombs, 1 DeG. & J. 34; Wharton v. Stoutenburgh, 35 N. J. E. 266; Taylor’s Landlord & Tenant, p. 451. (A copy of the lease which it is alleged respondent agreed to execute is attached to the bill of complaint as an exhibit, and adopted as a part thereof. The terms of the contract are fully set out therein.) That it is proper thus to set out the contract in haec verba, see 20 Enc. Pl. & Pr. 441, note 4; Joseph v. Holt, 37 Cal. 250. The allegations relating to the negotiations between the parties, as contained in paragraph II of the bill, may be treated as mere matter of inducement, and it may be assumed for the purpose of this case that up to the time of the drafting of the so-called leasehold agreement (lease) by lessor’s attorney and its delivery by lessor to lessee that the negotiations between the parties were still in the treaty stage and no agreement concluded between them. . The delivery of possession to the lessee, however, and the performance by him of the acts alleged in the complaint constituted an acceptance of lessor’s offer, and an agreement was thereupon concluded between the parties which may be enforced in a court of equity. Pomeroy on Contracts, Secs. 64, 66, 67; Seaman v. Aschermann, 51 Wis. 678; also 3 L. R. — 293 — A. N. S. 852, case note. While the allegations of the bill are disjointed and disconnected, and the facts relied on are not al■ways made to appear sequentially, we are none the less of the opinion that the complaint sufficiently alleges the agreement which is sought to be enforced and that the facts stated make a clear case of an offer to execute a ten years’ lease, accepted and fully performed by complainant and partly performed by respondent. W. J. Sheldon for complainant. J. Lightfoot for respondent. The decree appealed from is reversed and the case is remanded to the circuit judge for further proceedings.