Milton ROFFMAN and Oscar Tucker, trading as Launderbest, Defendants Below, Appellants,
WILMINGTON HOUSING AUTHORITY, a public body corporate and politic organized and existing under the laws of the State of Delaware, Plaintiffs Below, Appellees, And the Following Improved Parcels of Land with the buildings thereon erected situate in the City of Wilmington, County of New Castle, and State of Delaware: 1. No. 735 Lombard Street, containing approximately 1760 square feet of land, Brodsky Realty Co., Inc., a corporation of the State of Delaware, owner of said properties, or of some part thereof or interest therein; and Unknown Owners, Defendants Below, Appellees.
An appeal from the Superior Court in and for New Castle county.
William D. Bailey, Jr., of Herrmann, Bayard, Brill & Gallagher, Wilmington, for appellants.
Thomas Herlihy, Jr., and Morris Cohen, Wilmington, for Wilmington Housing Authority, appellee.
J. A. Rosenthal, of Cohen & Morris, Wilmington, for Brodsky Realty Co., Inc., appellee.
SOUTHERLAND, C. J., WOLCOTT, J., and MARVEL, Vice Chancellor, sitting.
The appellants, trading as Launderbest, leased from Brodsky Realty Co., Inc., appellee, the premises at 735 Lombard Street, Wilmington, in which they operated a laundry business.
The lease, inter alia, provided that all equipment installed by Launderbest for use in its business would remain its property with the privilege of removal upon the expiration of the lease. The lease further provided that in the event of the condemnation of the premises, or the [57 Del. 197] sale of the premises by Brodsky to a public authority, the lease would terminate. Upon such termination Launderbest waived 'all claims against the lessor by reason of the * * * taking of the demised premises.'
During the term of the lease Launderbest caused to be installed on the premises a one thousand gallon hot water boiler and a water softener and brine tank, both of which were attached to the concrete floor of the premises by a concrete bond. Launderbest also installed for its use in its business certain wooden shelving, a stairway and an electrical system. All of the above described items were so attached to the premises that removal from the premises was difficult and not economically feasible. All of the above described items were left
on the premises by Launderbest upon the termination of the lease as hereinafter described.
Wilmington Housing Authority, appellee, instituted condemnation proceedings to obtain title to 735 Lombard Street, and deposited $14,800 in court. The condemnation proceedings did not join Launderbest as a tenant.
Thereafter, Brodsky, the owner, and the Authority agreed on a price for the entire fee of the premises in the amount of $16,200, upon payment of which Brodsky obligated itself to convey to the Authority the premises free and clear of all encumbrances and leases.
Thereafter, Launderbest moved to intervene in the condemnation proceedings on the ground that it had an interest in the premises for which it was entitled to be compensated. This motion to intervene was granted.
Brodsky thereupon moved for summary judgment against Launderbest on the ground that its lease had terminated by reason of the public taking, and that, accordingly, Launderbest had no compensable interest in the [57 Del. 198] premises. Judgment was entered against Launderbest by the Superior Court apparently on the basis that, by reason of the waiver provision of the lease, Launderbest had waived all its interest in the premises after the termination of the lease due to the condemnation, including the right to compensation for fixtures or equipment left on the premises after it vacated.
Summary judgment was entered on a showing of the terms of the lease. Launderbest has not had the opportunity to present evidence as to the value, if any, of the equipment and fixtures left by it on the premises.
There is no real dispute among these parties that as a matter of general law a tenant has the right to be compensated for the taking in condemnation of his interest in premises under lease to him. Generally speaking, upon condemnation of realty, a tenant is entitled to be compensated for the value of his leasehold interest together with any fixtures installed by him which, under the terms of the lease, remain his property. Even though ordinarily fixtures become part of the realty, nevertheless, if, under the terms of the lease, they remain the property of the tenant he is entitled to compensation for them. Nichols on Eminent Domain, § 5.81; Orgel, Valuation Under Eminent Domain, 2nd Ed., § 110; Jackson v. State, 213 N.Y. 34, 106 N.E. 758, L.R.A.1915D, 492; In Re City of New York, Allen St., 256 N.Y. 236, 176 N.E. 377; Des Moines Wet Wash Laundry v. Des Moines, 197 Iowa 1082, 198 N.W. 486, 34 A.L.R. 1517; People v. Klopstock, 24 Cal.2d 897, 151 P.2d 641.
Even though, under the terms of a lease, a tenant retains ownership of fixtures installed by him with the right to remove them at the termination of the lease, the condemner may not raise as a defense the right of the tenant to remove the fixtures to avoid paying compensation for them. The reason is that the public authority [57 Del. 199] may not rely upon the provisions of a privately negotiated contract between the landlord and tenant which fixes rights as between themselves only. All fixtures having become part of the realty are taken with it and must be compensated for. Whether or not the public authority wants the fixtures, this remains so, since they have been taken. United States v. Seagren, 60 App.D.C. 183,50 F.2d 333, 75 A.L.R. 1491; In Re Property on North River, 118 A.D. 865,103 N.Y.S. 908, aff'd. 18 ...