Realty Dock & Improvement Corp. v. Anderson

In June, 1908, the Union State Bank, a banking corporation, leased and went into the occupancy of a portion of the Monadnock building in San Francisco, under a ten-year lease from Herbert C. Law, its owner. In October, 1908, Law sold the property and assigned his interest in the lease given to him by the Union State Bank to the plaintiff. In July, 1909, the defendant, Alden Anderson, as superintendent of banks of this state, declared the Union State Bank to be insolvent, took charge of its property, business,

Plaintiff brought this action to recover damages from the defendants for the removal of said steel door and said exterior and interior steel lining of said vault, which it alleged were wrongfully removed. The court made findings and entered a judgment in favor of defendants, from which, and a denial of its motion for a new trial, plaintiff appeals.

The court found that by the terms of the lease made between the plaintiff and the Union State Bank, the bank was leased a certain amount of space on the ground floor of the Monadnoek building for ordinary banking business, and also a large room in the basement immediately below the ground floor space; said basement-room to be used for safe deposit vaults to be constructed in said basement for the customers of the bank; that the premises leased should not be used “for any other purposes than that of banking and safe deposit business without the written consent of the lessor.” The lease further provided “that said premises should not be altered, repaired, or changed without the written consent of the lessor, and that unless otherwise provided by written agreement all alterations, improvements, and changes should be done either by or under the direction of the lessor but at the cost of the said lessee; that all alterations, additions, and improvements made in and to said premises, should, unless otherwise provided by a written agreement, be the property of the lessor and should remain upon and be surrendered with the premises.”

As to the construction of the brick vault: The court found that the bank upon entering into possession of the premises constructed a safe deposit vault in said basement; that said vault rested on the floor of said basement, and was not connected with the walls of the basement or with the ceiling, and was approximately twenty feet wide by thirty feet long and between eight and nine feet high. The walls of said vault were two feet thick, made of brick and lined inside and

These matters are taken from the findings. But in addition to said findings, and showing more in detail all about the construction of said vault and the removal thereof, the following undisputed facts taken from the record are referred to: The safe deposit vault was constructed by the bank under the provisions of the lease, and as an essential aid to the proper conduct of its banking business, and was of such substantial character and strength and permanency of construction as to render safe and secure protection for the valuables of the depositors and of sufficient size to be convenient and commodious for them. This vault was built in a corner of the basément-room, and one side and one end were set against said basement walls. These were not connected by cement ror mortar with such basement walls, but were built up against ' and parallel therewith. The vault-room was built up from the floor of said basement to the width, breadth, and height as found by the court. The walls were two feet thick, built of brick; they were constructed from the cement floor of the basement, the brick being laid on the basement floor and affixed thereto by means of mortar mixed with cement. The roof of the vault did not reach the ceiling of the basement but was constructed of nine-inch I-steel beams, eighteen feet long, laid close together across the vault walls and filled in with brick and cement. The reasonable cost of the construction of the vault brickwork was eight hundred dollars. The vault was lined inside and out with burnished steel casing, the outer steel casing being placed there solely for ornamental purposes. The steel of the ceiling of the vault was secured to the steel beams entering into its construction, and the

It is insisted by the appellant that the finding of the trial court that neither the vault, nor door, nor panelings, when constructed, were affixed to the building owned by plaintiff and formed no integral part of the building leased, and were not placed in the basement of said building, or in said building, as an “alteration, addition, or improvement” thereto, is not sustained by the evidence. While this finding, as a whole, embraces several particular findings, we do not think it necessary to consider the attack of appellant upon all of them, because we are satisfied that its contention is correct as to the particular finding that this vault was not placed in said building as an “alteration, addition, or improvement” thereto, and it is upon the fact as to whether the construction of the vault did, or did not, constitute an “alteration, addition or improvement” to the building, that the rights of the parties in this action are to be determined.

. It appears to us as assuming rather an idle task if we were to discuss at length the question whether the character of this vault built by the bank- did or did not constitute “an alteration, addition, and improvement” in the premises. It is, of

‘1 The covenants of the lease- are that on the last day of the term the lessees will surrender the demised premises, ‘and all the improvements that may have been placed thereon by the. said parties of the second part (the lessees) and which improvements are to belong to said parties of the first part (the lessors) and all of which are to be surrendered up in as good a state and condition as reasonable use and wear thereof will permit, damages by the elements excepted. ’ . . .

“The covenant is to surrender all the improvements that have been placed thereon. Improvements, clearly, in the lease, here used embrace every addition, alteration, erection or annexation made by the lessees during the demised terms to render the premises more available and profitable, or useful and convenient to them. It is a more comprehensive word than, ‘fixtures’ and necessarily includes it, and such additions as the law might not regard as fixtures. It would be difficult to select a more comprehensive word, and where the parties say all which may be placed upon the premises shall belong to the lessors it is difficult to say what, if anything, would be excluded.”

While the other authorities cited are to the same effect, attention is specially directed to Parker v. Wulstein, 48 N. J. Bq. 94, [ 21 Atl. 623 ], for a more particular discussion of the subject.

The judgment and order appealed from are reversed.

Melvin, J., Henshaw, J., Sloss, J., Lawlor, J., and Angellotti, C. J., concurred.

I dissent.

Under the terms of the lease, and upon the facts as stated by Justice Lorigan, I am of the opinion that the safe deposit vaults, having been put in the basement solely to facilitate the banking business carried on by the tenant in the leased premises, and not forming any part of the premises leased, should not be deemed to be a part of the premises, or an “improvement” thereto within the meaning of the clause that all “improvements made in and to said premises” should go to the lessor.' That clause should be held to refer to improvements to the premises as leased, not to a trade structure in no way affixed, except that it was set upon the floor of the basement. Neither the fact that it was not all removed, nor the fact that it was a massive structure, alters its character in law.