119 Minn. 27 | Minn. | 1912
Levi M. Stewart in his lifetime owned certain real property in the city of Minneapolis, and in the year 1892 sold the building situated thereon to James H. Bishop and others, and at the same time, and as a part of the same transaction, executed to them a ground lease-of the land for the term of one hundred years. The contract provided for a yearly rental of $1,000 for the first five years, payable quarterly in advance, and imposed also upon the lessees the obligation of paying-all taxes and assessments against the property. It further provided that at the end of the first five-year period, and at or near the end of each succeeding five-year period, there should be a readjustment of the rent to be paid, in the manner and upon the basis therein mentioned. A subsequent readjustment was had, as so provided for, and at the time the controversy in this action arose the successors of the lessees-were paying rent at the rate of $800 per year. The lease was duly recorded in the office of the register of deeds for Hennepin county on June 16, 1892. In March, 1906, the lessees, Bishop and others, assigned and transferred the lease, and all their rights and interests therein, to the Northwestern Fire & Marine Insurance Company, a corporation, defendant herein, and that company thereby assumed all obligations imposed by the contract upon their assignors. Since that transfer the insurance company has remained and still is in possession of the property, paying, as heretofore stated, rent at the rate of $800 per year, quarterly, and the lease is in full force and effect.
Thereafter, and in April, 1910, Stewart executed and delivered to-plaintiff, Dora Y. Benjamin, a second lease of the same premises for the term of one thousand years, at the annual rental of $900 per year, payable quarterly in advance. The lease was substantially like the former lease to Bishop, except that a readjustment of the rent to be paid was required to be made at intervals of ten years, which, as in the other lease, was to be based upon the valuation of the land exclu
Stewart died on May 3, 1910, leaving a last will and testament by which.he disposed of all bis property. David D. Stewart and Charles Morse were duly commissioned executors of the will, and on April 18, 1911, under license of the probate court, sold and conveyed the property covered by the leases to John and Samuel Friedman. This conveyance by its terms was expressly made subject to all rights under the existing leases, which were, together with all rights thereby conferred upon the lessor, Stewart, assigned as part of the transaction of sale, to the Friedmans. The deed and lease assignments were duly recorded. Thereafter the Friedmans entered into an executory contract for a sale of part of the premises to one Samdal, for the expressed consideration of $303,000, which Samdal subsequently assigned to defendants George G. and Herman L. Benz. This contract was thereafter, on March 8, 1911, fully performed by the conveyance of the property to the Benzes; the executory contract and the deed of conveyance being expressly made subject to the existing leases, which were both assigned to them. The rent under the second lease fell due •on the first days of March, June, September, and January, and fell due on the prior lease on the eighth days of these months.
After the death of Stewart, which occurred about six weeks after the execution of the second lease, Mrs. Benjamin regularly paid to
The action wherein Mrs. Benjamin is plaintiff involves the rent due March 8, 1911, and the action wherein George G. and Herman L. Benz are plaintiffs, and Mrs. Benjamin is defendant, involves the* rent due June 8, 1911. The same questions are presented in each case. The trial court, upon the facts stated, held that Mrs. Benjamin had a present vested interest in the property, a right to collect the-rent due from the insurance company, and judgment was awarded in her favor accordingly. A motion for a new trial in each action was made and denied, and the Benzes appealed.
1. The contention of appellant, aside from the errors urged in support of the motion for a new trial, is that the lease to Mrs. Benjamin vested in her no present estate or interest in the property, that she-acquired at most rights to accrue in the future, and is not entitled to the rent due under the prior lease. This is founded upon the general rule that, where the owner of real property grants to one person the right of possession for a term of years and subsequently leases, the property to another, to commence at the expiration of the first grant, no reversion or other present right passes to the second lessee,
The question is solved, it would seem, by an answer to the further question whether the parties intended the second lease to go into effect, presently, or that the operation thereof should be postponed until the expiration of the term of the first lease, then having eighty-two years-to run. If we take into consideration the written document issued by Stewart simultaneously with the second lease, by which he directed the tenants to pay their rent to the second lessee, the question is entirely free from doubt. That document conclusively shows that a present vesting of reversionary rights in Mrs. Benjamin was intended. But counsel for appellant contend that the Benzes occupy the position of subsequent bona fide holders of the legal title, and, inasmuch as they had no notice of the document referred to before acquiring their title, they are not bound thereby. The document so directing the payment of rent to Mrs. Benjamin was not recorded, and it does not appear that notice thereof came to appellants prior to their purchase of the property.
We find it unnecessary to determine whether knowledge of the second lease, which was of record and subject to which appellants acquired their title, was constructive notice of Mrs. Benjamin’s right to collect and receive the rent from the prior tenant, as evidenced by this separate’writing. We dispose of the question presented from the legal effect of the lease itself and without reference to that document.
The validity of the second lease, as a matter of law, cannot seriously be questioned. The parties were competent to enter into the contract, and the forms of law were complied with.' In the case of Cohen v. Suckno, 32 Misc. 689, 66 N. Y. Supp. 467, apparently holding, to the contrary, the question was not very seriously considered, and the decision there made is not in our view of the matter supported on principle. No law was violated by the execution of the contract, and it must be held valid, whether it be construed as taking effect at the
The question is one of intention. Did the parties intend the second lease to go into effect as of the date of its execution ? That such was the intention seems clear. The lease not only contains words of a present demise, presumptively a grant in pnesenti (Potter v. Mercer, 53 Cal. 667), hut expressly imposed present obligations and duties upon the lessee with respect to the property. Its language on the subject of the term of the lease namely, “to have and to hold said demised premises * * * from the first day of March, a. d. 1910, until the first day of March, a. d. 2910, being for the term of one thousand (1000) years,” is clear and unambiguous. In addition to this specific designation of the term, the lease further obligates the lessee to pay all taxes and assessments against the property, “beginning with the taxes of 1909,” and the sum of $900 a year as rent, “in equal, advance, quarterly payments, on the first day of the month of March, June, September, and December, in each and every year during the first ten (10) years of said term,” and thereafter at the readjusted rate. It also imposes upon the lessee certain duties in reference to the care of the property, requires her to keep the same insured, maintain the same in a sanitary condition, and to indemnify and save harmless the lessor from the consequences of any default of compliance with the obligations thus imposed, and, further, “that during the whole of said term” the lessee shall not permit or tolerate the sale of intoxicating liquors upon the premises, and, finally, the lessee covenants and agrees “to pay to the said lessor personally at his office the rents hereintofore and hereby reserved, at the time and in the manner herein specified, without any demand, deduction, or delay.” For any default in the performance of the obligations thus assumed by the lessee, the lessor may, at his option, terminate the lease.
A careful examination of the lease discloses no provisions in conflict or at variance with those recited, or from which it might fairly be inferred that the parties intended that the obligations imposed
We are not required to consider or determine the full extent of the rights and obligations of the second lessee. Whether it was within her power to comply with all the conditions of the contract is not here important. The only question now before us is whether she is entitled to the rent due under the first lease. We think the legal effect of the contract extended to her that right, and that such was the intention of the parties. The rental value of the property did not exceed $900, the amount required to be paid under the second lease, and it is clear that it was not the purpose of the transaction to give the lessor double rent for bis property. In fact, since the second lease necessarily granted to the lessee the control and care of the property, it would seem logically to follow that the right to the rents, issues, and profits issuing therefrom passed by the operation of law to her. There can be no difference on principle between the situation here presented and one where the lessor, subsequent to the execution of the lease, conveys by deed the property to a third person. If in such a case there
The precise question has not often arisen, so far as appears from the reports, but we are not entirely without precedent. In Logan v. Green, 39 N. C. 370, the court held that when “there is an outstanding lease for a number of years, and the reversioner makes a new lease to third persons to commence immediately, this is a vested estate; and, although the second lessees could not take possession of their term, inasmuch as the possession belonged to the first lessee, they would have a concurrent lease, and be entitled to all the rents issuing out of the term of the first lessee.” The facts in that case were similar to those in the case at bar. See, also, where the same rule is applied, Pendergast v. Young, 21 N. H. 234. This conclusion follows logically from the construction we give the lease, for no other result would be consistent with the legal effect of the transaction. We therefore hold that the second lessee is entitled, so long as her lease remains in force, to collect and receive the rent due under the first lease.
2. In view of this result, many of the assignments urged in support of the motion for a new trial become immaterial. We have examined them all, however, and find therein no error of a character to justify a new trial.
Order affirmed in each case.