Pearson v. Sanderson

Mr. Chief Justice Craig delivered the opinion of the Court: This was an action brought by James Sanderson, against Gustavus C. Pearson, to recover the amount of an appraisement which had been awarded the plaintiff for permanent improvements placed by him on certain premises leased of the defendant. Under the contract set out in the declaration, certain premises in Danville, Illinois, were leased by Pearson to Sanderson for five years, from April 1,1881, upon which the latter was authorized to erect a corn and feed mill and dwelling house. The lease, among others, contained the following provision: “At the expiration of five years, in case of non-renewal of this or the making of a new lease, or at the period that this lease shall be determined by forfeiture, by agreement, or in case of death of lessee, in case said lessor has not already purchased said improvements, one appraiser, who shall be a householder and citizen of Danville, shall be chosen by each, (lessor and lessee,) which appraisers shall determine the then cash value of the permanent improvements made by said lessee, and remaining upon the said premises leased, provided the lessee may first remove the engine, boiler machinery, if free from liens in favor of lessor. In the event of the appraisers failing to agree upon values, a third person shall be chosen by them, (the appraisers,) who shall be a resident and householder of Danville. The valuation decided upon by two of the three appraisers shall determine the amount that shall be paid by lessor to lessee for said improvements, after giving lessor credit, and paying all liens due him from lessee for money advanced, unpaid rent, or other indebtedness due or to become due from lessee to lessor.” It is also averred in the declaration, that plaintiff entered into possession of said premises and occupied the same under said agreement, for five years, and made the following.permanent improvements, viz.: One house and kitchen, one mill building, one barn and shed, one well and cistern at the house, filling yard, one out-house, partition fence and shrubbery; and that said lease was not renewed, and that defendant did not purchase the permanent improvements made upon said premises; that on April 2, 1886, plaintiff chose Henry Brand as his appraiser, and defendant chose John Beard, and that they failed to agree, and that on July 1, 1886, they chose Magnus Yeager, and that the three could not agree, but that Yeager and Brand did, on July T, 1886, appraise, determine and fix the fair cash value of said permanent improvements so left on said premises, at their value on April 1, 1886, and made a written finding, in which plaintiff was allowed $1640 therefor. To the declaration the defendant pleaded the general issue and several special pleas. The defense set up and relied upon in the special pleas, in substance, was, that the appraisers were arbitrators, and as the rules governing arbitrators were not observed, especially in giving notice of the time and place of meeting, the action of the appraisers was not binding on the defendant. If the proceeding which resulted in an appraisement in favor of the plaintiff for the sum of $1640 was an award, and should be governed and controlled by the rules that govern arbitrations and awards, the validity of the appraisement might well be doubted. But the proceeding, as we understand it, was not an arbitration. It was a mere appraisement of the value of certain permanent improvements placed upon the premises by the plaintiff, which appraisement, under the terms of the lease, was to be paid by the defendant. Norton v. Gale, 95 Ill. 533, is an authority in point. It was there held, that where the parties to a lease provide for rent to be paid yearly, at six per cent on the appraised value of the demised premises, to be ascertained by the selection of property holders, this is not a submission to arbitration, and no notice to the parties is necessary before making the appraisement, unless the lease so requires; and the finding of the appraisers, when selected, will be conclusive upon the parties, except for fraud. The decision in the case cited was approved, where a similar question arose, in Stose v. Heissler, 120 Ill. 436. No distinction can be drawn between the cases cited and the one under consideration.In the Norton case, the appraisers were selected to appraise the value of leased premises, the value, when fixed, to form the basis for the payment of rent at a specified per cent, while here the appraisers are selected to determine the value of certain permanent improvements placed on the leased premises. In neither case was it contemplated that evidence or the statement of the parties should be heard, but the appraisers were merely to examine the property, and use their own judgment in determining value. There was no dispute to be settled or trial to be had, as is the case where there is an arbitration and award. Where a proceeding is an arbitration, it is necessary that a time and place should be fixed for a hearing,—that the parties should receive notice, in order that they might appear and introduce their evidence, and make their statements before the arbitrators. But nothing of the kind is required in a case of this character. No evidence is to be heard. The appraisers ascertain such facts as may have a bearing on the value of the improvements, in their own way, and act upon their own judgment. It is also claimed that the court erred in instructing the jury that the defendant was liable for all the improvements placed upon the premises. The contract provided that the appraisers shall determine the cash value of the permanent improvements made by the lessee and remaining upon the premises leased, and the construction placed upon the contract by the court was, that the defendant was liable for the permanent improvements. We think the construction placed upon the lease was warranted by its terms. The court instructed the jury that plaintiff was entitled to recover the amount fixed upon by the appraisers, with six per cent interest from the time defendant was notified of the amount which had been agreed upon, and it is insisted that interest could not be recovered. Section 2, chapter 74, of the statute, provides that interest may be recovered at the rate of six per cent upon all moneys after they become due, on any bond, bill, promissory note or other instrument of writing. The lease executed by the parties, as has been seen, provided that the valuation decided upon by the appraisers should determine the amount that should be paid by lessor to lessee for said improvements. Under this clause of the lease, when the appraisers fixed upon the amount which the lessee was entitled to receive under its terms, then the amount became due by the terms of the lease. The lease was an instrument of writing, within the meaning of the statute, supra, and as interest may be recovered on money due on an instrument of writing, we are of opinion that interest was properly allowed. The judgment of the Appellate Court will be affirmed. Judgment affirmed. Mr. Justice Wilkin took no part in this case.