16 Ohio N.P. (n.s.) 97 | Oh. Ct. Com. Pl., Cuyahoga | 1914
The plaintiff, Henry L. Cross, was the owner of 100 feet of land fronting on Enclid avenue in the city of Cleveland, and on January 3, 1895, he duly executed an indenture of lease, coupled with an option to purchase, to William A. Vliet and Charles L. Pack, for a period of fifteen years, or until December 31, 1909. On September 24, 1895, with the written consent of the plaintiff, Pack and Vliet duly assigned the lease 'to the defendant, the Commercial Real Estate Company, which assignment is as follows:
“Cleveland, Ohio, September 24, 1895. I, Henry L. Cross, the lessor mentioned’in the lease dated January 3, 1895, referred to in the within assignment of lease, do hereby consent to said assignment as provided for in the sixth article of said lease dated January 3, 1895. The consent is granted without releasing the said Charles L. Pack and. William A. Vliet from any of the obligations of said original lease so dated as aforesaid. Henry L. Cross.”
At this time, Euclid avenue, at the location of the Cross homestead, was a residence district, though it was so closely situated to the business part of Euclid avenue that the original lessees, Pack and Vliet, foresaw that in the course of years business would be pushed down Euclid avenue, and the value of the Cross property greatly enhanced.
The Commercial Real Estate Company, after the assignment of the lease to it, entered into possession of the property and immediately began subleasing the premises for residence purposes, and later for rooming-house purposes; and the company, by the assignment, being in privity with the plaintiff, will hereafter be designated as the lessee. Business, however, it is claimed by .the defendant, was much slower in moving down Euclid avenue than it was anticipated, and the defendant realty company claims that up to the last year of the lease it had lost in the neighborhood of $20,000.
This indenture of the date of January 3, 1895, was not only a lease, but it contained an option to purchase at the end of the term for the sum of $90,000: and this suit is at this time one
First. “Rent of $3,Q00 in semi-annual payments on April 1 and October 1, during the continuance of the lease, to be deposited to the credit of lessor at the Guardian Savings & Trust Company.”
Second. “As a part of the consideration of said lease, and in addition to the rental hereinbefore provided, said lessee hereby covenants and agrees to indemnify and save harmless the lessor, said ground, the premises demised and improvements thereon, from all taxes and assessments levied and assessed during the term of this lease, beginning with the taxes and assessments for the year 1895 and ending with the taxes and assessments for the year 1909, and free from all charges, liens, penalties and claims for damages chargeable to or payable for or in respect of said ground or the rentals to accrue thereon during said term, and to punctually pay, in addition to the rents above provided for, all such taxes, assessments and other charges as aforesaid and, upon application of said lessor in writing, to furnish said lessor with written evidence duly certified, that any and all such claims are duly satisfied. And the said lessee does hereby agree to pay the rents, taxes, assessments and other charges as hereinbefore provided, and the said lessee hereby agrees to promptly and fully obey and comply with all requirements, rules, regulations, laws and ordinances of all legally constituted authorities in any way affecting said premises, buildings and improvements on or about the same, or the use of the same, existing at any time during the continuance of this lease, and to permit no unlawful occupation to be carried on upon said premises and no use to be made of any part thereof contrary to any law or ordinance 'governing the same.”
Fourth. * * * “Provided, however, that said lessee shall have and is hereby given the privilege of altering, removing and destroying the .buildings and improvements now upon said premises, but only on the condition that the lessee shall proceed immediately after the altering, removing or destroying of such buildings and improvements, to so alter or repair such buildings and improvements, or construct a new building upon said premises that the same shall be of equal or greater value when completed than the one altered, removed or destroyed; and lessee agrees to and does hereby become responsible to lessor*100 for any and every damage that may accrue to lessor by reason of the failure of lessee to finish and complete supln altered building or to replace such removed or destroyed building.”
Sixth. “The lessee further covenants and agrees not to assign or transfer this lease at any time, except with lessor’s consent in writing, unless the rents and all charges, taxes and assessments, liens, penalties and claims for damages which the lessee has herein covenanted to discharge, have been duly discharged and satisfied, nor unless the assignee shall expressly assume the lessee’s engagements hereunder, nor unless the lessee shall have first placed in the hands of the lessor for inspection during the period of ten days a legal and sufficient instrument of assignment and acceptance which shall, before its execution, be satisfactory to lessor, nor unless by instrument recorded at or about the time of delivery in the proper recorder’s office. .Provided, however, that the lessee may at any time, directly or by conveyance in trust for that purpose, mortgage his estate in the premises to secure any actual debt, and make all insurance exceeding $10,000 above stipulated payable in case of loss to said trustee or mortgagee. It is covenanted and agreed that no assignment hereof shall be "made except in accordance with the above stipulation or by way of devise.”
Eighth. “This lease is made upon the condition that the lessee shall punctually perform all covenants and agreements herein set forth to be performed by said lessee, and that if at any time the rent, taxes, assessments and other charges and payments aforesaid, or either of them, or any part thereof, shall become in arrears and unpaid for the period of ninety days after becoming due, or if any of the covenants or agreements aforesaid shall not be performed as hereinbefore stipulated and agreed to be performed by said lessee, the said lessor, at any time thereafter, shall have full right at his election, without • further demand or notice, to enter upon the above described premises and bring suit for and collect all rents, taxes, assessments, payments or other charges which shall have accrued up to the time of such entry, and thenceforth from the time of such entry this lease shall become void to all intents and purposes whatsoever, and this lease and all improvements made upon said premises shall be forfeited to said lessor without compensation therefor to said lessee. Provided, also, that for rents due and non-performance of condition, the lessor may sue at once but not enter upon forfeiture for three months. ’ ’
Tenth. “Lessor hereby gives and grants unto said lessee, their heirs, executors, administrators and assigns, an option to purchase the premises described in this lease at the expiration*101 of the term, hereof for the sum of $90,000 cash. In the event said lessee’desires to exercise this option, they shall notify said lessor, his heirs, executors, administrators or assigns, of his election to purchase said premises, by delivering, not more than four months nor less than thirty days prior to the expiration of the term of this lease, written notice of such election to said lessor, his heirs, executors, administrators or assigns, or by depositing such notice with the Guardian Trust Company, of Cleveland, Ohio, or at such other place or with such other person or corporation as shall at that time be designated for the payment and receiving of the rents hereunder. And, in the event of the acceptance of this option by said lessee, his heirs, executors, administrators or assigns, said $90,000 shall be paid in cash to said lessor, his heirs, executors, administrators or assigns, on December 31, 1909. This option is a part of this indenture and runs with the same. It is given in consideration of the punctual payment of the rents provided for hereunder and the like performance of all of the covenants, agreements, stipulations, terms and conditions of this instrument. It can not be assigned except with this instrument, and shall be terminated by the termination of this lease from any cause whatsoever.” • .
On March 10, 1909, or about ten months before the expiration of the lease and six months before the defendant could give notice of its election to purchase under the option, the defendant, the Commercial Real Estate Company, lessee, made, executed and delivered to one William M. Brown a lease for,the term of ninety-nine years beginning on the first day of July, 1909, six months before the expiration of the original lease. This ninety-nine year lease from the defendant, the Commercial Real Estate Company, to Brown, included all of the Cross premises and also fifty feet of land immediately east of .the Cross premises which was owned in fee by the Commercial Real Estate Company, and' in this new lease Brown agreed to erect a much more valuable building than was provided for in the lease in question from Cross to Pack and Yliet. The covenants are different. The Commercial Real Estate Company had the right of re-entry for condition broken; the rent is increased to such an extent that it shows a difference in the value of the premises of over $200,000.
On August 14, 1909, the plaintiff brought suit against the original lessees, Pack and Vliet, for the recovery of the possession of the premises on grounds of forfeiture, claiming a violation of covenant “two” of the lease, in that the defendants had permitted the premises to be used for the purpose of an assignation house, and had permitted the unlawful sale of intoxicating liquor on the premises; and, second, that the -defendants had violated covenant “sixth,” not to assign the lease without the written consent of the plaintiff, lessor, and plaintiff prayed to be restored to possession.
It seems that the plaintiff had either neglected to inform his counsel of his consent to the assignment from Pack and Vliet, or had forgotten that he had given his consent to such assignment; and upon discovering the same, the plaintiff filed his amended petition, which was the same as his original petition except that the Commercial Real Estate Company was made a party, and the' assignment and the consent to the same were averred.
At the time specified in the opinion, September 2, 1909, the defendant, the Commercial Real Estate Company, duly notified the plaintiff, Cross, of its election to take the premises as provided in the option, and on December 31, 1909, the last day of the lease, and the day named in the option to purchase, the defendant duly tendered the $90,000 in gold and demanded a
The original action was one in ejectment for a breach of the covenants of the lease. At the time it was filed, the lease had five months to run. But the leasehold ended on December 31, 1909; and the defendant, the Commercial Real Estate Company, or Brown if he is assignee, after that date held possession, not by the terms of the lease, for it had expired, but held possession because it claimed to have exercised its option, made its tender according to the terms of the option, and the action was still one in ejectment. By clause “ten” of the lease, “This option is a part of this indenture, and runs with the same. It is given in consideration of the punctual payment of the rents provided for hereunder and a like performance of all of the covenants, agreements, stipulations, terms and conditions of this instrument. It can not be assigned except with this instrument, and shall be terminated by the termination of this lease from any cause whatsoever.” So that if the lessees, by any act of theirs, terminated or forfeited their lease during its term of fifteen years, such act would also forfeit the option, and plaintiff could bring an action to cancel it or he could plead such act to any action for specific performance of the option contract. It is true, too, that all the covenants, conditions, etc., of the lease are made conditions, covenants, etc., of the option; so that the instrument did not provide that the option “shall be terminated by the termination of this lease from any cause whatsoever,” yet the legal effect is to rewrite all the conditions and covenants of the lease in the option as fully as though they were repeated in the option, and plaintiff has the same rights under the option for a violation of its terms as he has for a violation of the terms of the lease.
The Issues.
The plaintiff therefore claims, as it appears to me, that he gave this option, together with the lease, to Pack and Vliet, that they assigned it to the defendant, the Commercial Real Estate Company; that this option contained all the above enumerated covenants; that he performed all the conditions and agreements on his part to be performed, but that the defendant, the Commercial Real Estate Company, did not so perform its covenants and agreements, but that it wrongfully, and without any right, did break the covenants and agreements and failed to perform the conditions on its part to be performed in this, to wit:
First, that it violated the covenant not to permit the premises to be used for any unlawful purpose (clause II of the option and lease) by permitting and allowing a house of ill-fame to'be conducted thereon, during the continuance of the lease, and a further violation of that clause by permitting said premises to be used for the unlawful sale of intoxicating liquor, which acts 'were both in violation of the covenants of the lease and the or
Second, that, in violation of the covenant (No. VI) “not to assign except with the written consent, of the lessor,” the defendant the Commercial Real Estate Company did, on March 10, 1909, execute a lease of all of said premises to the defendant, Brown, for a term of ninety-nine years beginning on July 1, 1909, and ending on Juné 30, 2008; and that simultaneously with the execution of the said ninety-nine year lease, the Commercial' Real Estate Company granted an option to purchase to Brown; that by so doing it assigned away all of its term and interest in said premises; that this was an assignment in law, and that it was done without knowledge or consent in writing of the plaintiff ; that Brown went into possession on July 1, 1909, and began the tearing down of the buildings.
The petition also sets forth the option, and that the defendant the Commercial Real Estate Company claims the premises by virtue of the option; that said option and adverse claim is a cloud upon his title; that the defendant the Commercial Real Estate Company is collecting the rent from Brown in violation of plaintiff’s right to receive the same, and prays for an accounting, that the option be canceled, and plaintiff’s title quieted, and for such other and further relief as equity and good conscience may allow.
The defendant denies that it has violated any of the terms of either the lease or the option; admits that it made the ninety-nine year lease to Brown and gave him an option to purchase, but alleges that this lease and option to Brown is not an assignment of its lease, but that it is a sublease from it to Brown, founded upon the remainder of their leasehold and then upon their right to purchase, their right to a deed in fee simple from the plaintiff on the last day of their leasehold. It alleges that on September 3, 1909, this defendant duly notified the plaintiff of its election to exercise its option to purchase, aud avers that on December 31, 1909, the day named in the option, it duly tendered to plaintiff the sum of $90,000 in gold, as in said option required, and demanded a deed for said premises.
By its supplemental answer, the defendant avers that the plaintiff and his wife, on August 29, 1913, gave, granted, bargained, sold and conveyed unto the National City Bank, of Cleveland, the premises about which arises this controversy, and sold, assigned and transferred to said bank all their right, title and interest in and to the lease and option, and by said,instrument of conveyance wárranted and covenanted that he, the said Cross,was well seized of the premises and was the true and lawful owner of the lease and option.
Defendant further avers- that Cross, for the consideration of 'one dollar, ratified and confirmed the. lease from Brown to the Cleveland Athletic Club of the tipper stories of the building'; and that, inasmuch as Brown is in possession under them, therefore Cross has recognized the validity of its lease to Brown.
Defendant avers that, it sought to obtain from plaintiff, in December, 1908, and in the early part of 1909, a deed in advance; that it was then negotiating with Brown for the ninety-nine year lease, and that such facts were known to plaintiff and his agent, the Guardian Trust Company; that the lease to Brown for ninety-nine - years was made on March 10, 1909, and that plaintiff and the Guardian Trust Company were advised of the making of the lease and made no objection thereto, but acquiesced in the same, and, with such knowledge, received the rent due April 1, 1909; and that by reason of these acts, conduct and silence on the part of plaintiff, and his wife, the plaintiff can not maintain this action; that he has acknowledged and recognized the validity of the original lease, and has -waived ,any forfeiture, and is estopped from claiming a forfeiture of the instrument.
Plaintiff by reply admits the execution of the instruments to the Guardian Savings & Trust Company, but avers that such instruments were mortgages for security for certain loans, and that said mortgages contained the usual defeasance clauses; admits the execution of the instrument under date of August 29, 1913, from him to the National City Bank; admits that he gave, bargained, sold, etc., to said bank the premises described in the fourth amended and supplemental petition, and that he sold, assigned and transferred to said bank all his right, title and interest in the lease, and the rents reserved therein, and to the option from himself to Pack and Vliet; and further alleges that he also conveyed to said bank by said instrument all his right, title and interest in the land contract from himself to Brown of the date of April 11, 1910; and he says that said instrument was a conditional instrument, and given merely as security for a loan which was due the bank. ITe admits that he received the rents due April 1, 1909, but denies that he had any notice or knowledge of the lease to Brown at that time, and alleges that the defendant, the Commercial Real Estate Company, without his knowledge or consent, executed said lease, and, in order to keep the knowledge of the making of such lease from him, the defendant withheld the lease from record until September, 1910; and he denies that any of his conduct or acts misled the defendant into making the lease to Brown, or that his acts or conduct constitutes a waiver of the forfeiture or is an estoppel to his prosecution of this suit.
Plaintiff’s answer to the defendant’s cross-petition for specific performance is practically the facts and averments of his petition. He admits the notice to exercise the option, and the tender of the $90,000 in gold, and that the same was refused:
Finding of Fact and Law as to the Alleged Illegal Use o« the Premises.
The court finds from the evidence that one Mrs. Sherman was a tenant of the defendant, the Commercial Real Estate Com
The court further finds that neither the defendant the Commercial Real Estate Company nor any of its officers had any knowledge whatsoever that a house of ill-fame was being conducted there by the said Mrs. Sherman, nor did it or they know or have any reason to believe that there were unlawful sales or giving away of intoxicating liquor on said premises by the said Mrs. Sherman. And the court further finds that neither the Commercial Real Estate Company nor its officers-knowingly permitted said illegal or unlawful uses of said premises.
Do these facts constitute a statutory forfeiture of the lease?
The statute directly involved is Section 4361, Revised Staf$utes (6209, General Code), which provides:
“ * * * Ihe unlawful selling or giving away of intoxicating liquors shall work a forfeiture of all rights of the lessee or tenant under any lease or contract of rent upon premises where such' unlawful sale or giving away takes place. ’ ’
If a sub-lessee makes unlawful sales of intoxicating liquors, will that work a forfeiture of the lease from the lessor to the lessee ? This question has never been passed hpon by the courts of Ohio. In 1854 (52 O. L., 153) the Legislature passed an act “Providing against the Evils Resulting from Sale of Intoxicating Liquor;” and in 1879 (67 O. L., 101), Section 7 was amended to read as it now reads in Section 4361, Revised Statutes, and Section 10 amended to read as now reads, Section 4364, Revised Statutes. Both of these sections have been construed by our Supreme Court where the question is between the lessor and lessee, but not a great deal of aid is given to the solution of the question heré presented.
“It would require the most explicit terms to justify the conclusion that the Legislature intended to deprive a lessor who had not offended against the policy of the law, in thought or deed, of the benefit of his contract.
“The guilty lessor takes nothing by his contract, while the innocent is protected in his rights.”
In Goodall v. Brewing Co., 56 Ohio St. 257, the Supreme Court construed Section 4364, Revised Statutes (originally Section 10.), which Avas passed at the same term as the section in question. Section 4364 provided that “All contracts Avhereby any premises are rented, and the same shall be used and occupied for the sale of intoxicating liquors, shall be void.” In construing this section, the court read into it, after the words ‘‘ For the sale of intoxicating liquors,” the Avords “contrary to law.” On page 260 the court uses the following pertinent language:
“All sales of intoxicating liquors arc not illegal; only such are so that are defined and prohibited; and the sales to which reference is made are such as are defined and prohibited; and none but such sales affect in any Avay the validity of a contract of lease. * * * To hold other\Adse would impute to the Legislature a great Avant- of consistency. Neither a civil nor a. criminal liability can Avith consistency be attached to the do.ing of a lawful act.” * * *
There can be no reason against the validity of contracts that “have for their object simply the, laAvful conduct of the business.”
“It was early announced as a rule of construction in Ohio, that Avhatever may be the nature or kind of forfeiture, it is never carried beyond the clear expression of the statute creating it.”
It should be the policy of the law p to punish the guilty and to shield the innocent; and while the statute under consideration was passed by the Legislature for the purpose of checking
The state of Oklahoma has the following statute:
“All leases between landlords and tenants under which any tenant shall use the leased premises for the purpose of violating any provision of this act, shall be wholly null and void, and the landlord may recover possession thereof as in forcible entry and detainer.”
In construing this statute on February HI, 1913, the Supreme Court of Oklahoma held that the lessee’s lease was not to be forfeited or canceled at the suit of the .landlord, lessor, for an infraction of the statute by a sub-tenant of the lessee, unless the violation was permitted or continued with the knowledge of the lessee. And the court concludes with the following reasoning :
“The unreasonable consequences, if not to sa.y unconstitutional results, which would follow any other holding seem. to us to be apparent at a glance. Suppose, to strengthen the example of the case here before us, that Street and Reed owned this entire city block with its several hundred buildings font rooms, and that they leased the entire property to Tull. That Tull then leased it to several hundred, different people, who entered upon their occupancy and engaged in their different occupations and uses therein, and then, without the knowledge of either Tull or any of these other sub-lessees, some of them in some distant .corner of this property should surreptitiously engage in the illegitimate sale of intoxicating liquors. Is it be contemplated for a moment that the rights and contracts of this great body of people should, because thereof, be swept out of existence, and the primary landlord be permitted to enter and oust all of such innocent holders?
*111 “A statement of the proposition, in our judgment is sufficient to refute the contention; and we therefore hold the judgment of the court was erroneous in holding for cancellation Tull’s lease as to the square of ground located in the center of the block, and the case is remanded 'with instructions to set the said judgment aside and enter one in accordance with this opinion.”
The court therefore holds, that the lease forfeited by Section 4361, Revised Statutes, is the lease of the sub-tenant, the one who does the unlawful act; and that the lease of the lessee, who has do knowledge of the unlawful sales of intoxicating liquor, is rot forfeited by that statute. To hold otherwise is neither warranted by the words nor intent of the law. Forfeiture being abhorred by the law, should never be carried beyond the clear expression of the statute creating it.
Finding as to Clause II oe the Tie a re
The second clause of the lease is as follows:
“As a part of the consideration for said lease, and in addi-' tion to the rental hereinbefore provided, said lessee hereby covenants and agrees to indemnify and save harmless the lessor, said ground, the premises demised and improvements thereon, from all taxes and assessments levied and assessed during the term of this lease, beginning with the taxes and assessments for the year 1895 and ending with the taxes and assessments for the year 1909, and free from all charges, liens, penalties and claims for damages chargeable to or payable for or in respect of said ground or the rentals to accrue thereon during said term, and to punctually pay, in addition to the rents above provided for, all such taxes, assessments and.other charges as aforesaid and. upon application of said lessor in writing, to furnish said lessor with written evidence duly certified, that any and all such claims are duly satisfied. And the said lessee does hereby agree to pay the rents, taxes, assessments and other charges as hereinbefore provided, and the said lessee hereby agrees to promptly and fully obey and comply with all requirements, rules, regulations, laws and ordinances of all legally constituted authorities in any way affecting said premises, buildings and improvements on or about the same, or the use of the same, existing at any time during the continuance of this lease, and to permit no unlawful occupation to be carried*112 on upon said premises and no use to be made of any part thereof contrary to any law or ordinance governing the same.”
The court has already found, under statutory forfeiture, that .there was a house of ill-fame conducted by a Mrs. Sherman, a sub-tenant of the Commercial Real Estate Company, upon the premises, and that she unlawfully sold and gave away intoxicating liquor on said premises at said time, and that neither the Commercial Real Estate Company nor its officers had any knowledge as to this unlawful use of the premises, by its sub-tenant.
The claim here presented is, that the defendant the Commercial Real Estate Company violated the covenant “To permit no unlawful occupation to be carried on upon said premises, and no use to be made of any part thereof contrary to any law or ordinance governing the same.”
We approach a construction, of this clause with the fundamental principle that forfeitures are strictly construed against the person claiming them, and any doubt or ambiguity is to be resolved against the person claiming the forfeiture. West v. Insurance Co., 27 Ohio St., 1, 13; State v. Boyce, 43 Ohio St., 46.
The. covenants and conditions in a lease are strictly construed against, the lessor, and such construction will be given the language used as to defeat a forfeiture if possible. Gilbert v. Port, supra.
The defendant contends that the word “permit” implies knowledge, and that there was no violation of this covenant, the court having found that the defendant had no knowledge of the illegal uses by the sub-tenant.
On the other hand, the plaintiff contends that this clause, “to permit no unlawful use,” etc., is a covenant that there shall be no unlawful use of the premises in any event, or that the court should adopt the same construction of this covenant in Ohio as was adopted by the courts of Massachusetts as to the covenants “to suffer no unlawful use of the premises,” the courts there holding that “an unlawful use of the premises by a sub-tenant is a breach of the covenant to make or suffer any unlawful use of the premises, whether known to the lessor or not.”
While the courts of Ohio have passed upon the word permit
Robinson v. Greenville, 42 Ohio St., 625, was a negligence case against a municipality for permitting the firing of a cannon in the public street, whereby plaintiff was injured, and the allegation that the “authorities permitted” was said to niean, “took no measures to prevent;” but there were other allegations in the petition alleging that the village had full knowledge of the firing of the cannon, and that they took no measures to prevent.
In Acherman v. Thompson, supra, heretofore cited, “To permit means either, first, to suffer, or allow to be, to come to pass; or take place by tacit consent or by not prohibiting or hindering; or, second, to grant leave or liberty by express consent; to allow expressly.”
There are many decisions in other states supporting each of the contentions herein, but that construction of the word “permit” which has in it the element of knowledge appears the more reasonable one to apply to a forfeiture ease.
In Gregory v. United States, 10 Fed. Cas., 1195, it is said:
“Every definition of ‘suffer’ and ‘permit’ includes knowledge of what is done.”
Such construction also was given in the following cases:
Gray v. Stienes, 69 Ia., 124; Ball v. Campbell, 6 Idaho, 754; Chicago v. Stearns, 105 Ill., 554; State v. Robinson, 55 Minn., 169.
I do not believe that the courts of Ohio will follow the doctrine of the Massachusetts cases. It would seem to be both harsh and unjust to apply such a rule in this case. The defendant had entered into a sub-lease to one ICrieger, who had occupied the premises for a number of years; and he, with the consent of the defendant, had transferred such lease to Mrs. Sherman, alias Lee. The lease was one of the ordinary form, and such as is used by every landlord in Ohio. That lease had
True, the court finds that the house, from October, 1906, to June, 1907, was a house of ill-fame — known in the neighborhood as such' — and therefore plaintiff contends should have been known to .the defendant. But if such ill-fame should have been known to defendant, so also, should it have been known to the plaintiff, and he could not now complain because of his laches in asserting his right, nor could he complain having such knowledge and having received the rents for 'two years subsequent thereto. The truth is, that neither plaintiff nor defendant'knew of the unlawful uses of the premises up to July or August, 1909.
What was the intention of the parties? The whole of clause II should be read and construed together. Examine it as a whole.
The “lessee covenants and agrees to indemnify and save hdrmless the lessor, said ground, the premises and improvements thereon from all taxes and assessments * * * and free from all charges, liens, penalties and claims for damages * * * and to punctually pay all taxes, assessments and other charges as aforesaid, * * * to promptly and fully obey and comply with all requirements, rules, regulations, laws and ordinances of all legally constituted authorities in any way affecting said premises, and to permit no unlawful occupation to be carried on upon said premises, and no use to be made of any part thereof contrary to any law or ordinance.”
Finding and Law as to the Assignment.
It is admitted that the ninety-nine year lease and the option from the defendant to Brown was made on March 10, 1909, and that such lease was to begin on July 1, 1909, and that the ninety-nine year lease used up all of the balance of the fifteen year term of the original lease, and extended, over ninety-eight years beyond the original term. It, is admitted that the lessee, the Commercial Realty Company, at the time it made the ninety-nine year lease, had an option to purchase on the last day- of the term; and that the*court finds that it at that time intended to exercise its option and get the fee on said last day. The court finds that the premises conveyed in the ninety-nine year Tease were different; that it contained the original 100 feet belonging
Was the Ninety-nine Year Lease an Assignment in Law?
This question has, after a study off all the authorities, caused more trouble than any question presented in the case. There seem to be authorities on each side of the proposition, but the text-boobs generally answer in the affirmative. Tiffany, Landl. & Ten., Section 151; Wood, Landl. & Ten., Section — ; Taylor, Landl. & Ten., Section 16.
And there are many decisions, aucient almost to the point of veneration, to the same effect. It is to be noted, however, that the question usually arises in those cases when the landlord is seeking to hold the under-tenant for rent due by the terms of the original lease. Like many of our laws in regard to real property, it had its origin in the feudal system. To the overlord a service of fealty was due from the tenant by virtue of 'his tenure; and if the lessee parted with his whole estate, h.e who took over this estate was put in the place of the original tenant and was bound by the original tenant’s covenant to render the military service. Such is the origin of the rule which plaintiff seeks to enforce in this action. Under these holdings, if the original tenant held but the very shred of his estate, one minute out of a ninety-nine year lease, a new estate was carved out of the original estate and there was a subtenancy and not an assignment, and the original tenant marched off to war while the sub-tenant stayed at home and attended his harvest.
There is no case by four corners in Ohio. .In 1846, however, the Supreme Court had before it the case of Jones v. Smith, 14 Ohio, 606. On May 25, 1835, one Dixon leased to the defendant Smith and to one Gray a two-story house with a certain quantity of household furniture for a term of five years, with
“Iiow much of .the entire rent is the consideration for the realty, and goes to the assignee for the lease, and how much should be retained out of the personalty for the lessor, from whom it is not conveyed by any grant or assignment? In our view, no such partition can be made, and if the whole term, and the whole interest in the term, is not conveyed, it is no more an assignment which can be enforced in his own name, by the assignee, of the lessor, than the assignee of the lessee.”
Fulton v. Stuart, 2 Ohio, 216, lease of a part of the premises for the whole term, and the court held:
“Where a lessee assigns a part of the premises leased to a third' person for the whole period of time of the le¿se, it is but an under leasing and the lessor can sustain no action on the lease for rent against the assignee.”
The court say:
"In this case the declaration states that the defendant was not assignee of the whole premises; he did not take and does not hold the whole term of the original lessee.”
In St. Clair v. Williams. 7 Ohio (pt. 2), 110, it is said: “The assignee is he who holds the whole estate or term.”
In Worthington v. Ballauf, 7 Bull., 46; 10 Rec., 505, it is said, as to what constitutes an assignment of a lease, “it is unnecessary to observe further than it must convey to the assignee the whole of the term and the whole estate of the lessee. If a day of the term or a particle of the estate be reserved, the transaction is not an assignment but a subletting.”
In Powder v. Neiss, 7 N.P. (N.S.), 1, Margaret Herb leased to one Neiss for a term of years. During the term Neiss leased for the remainder of the term to one Tschirret. Before the
On page 4 the court says: ‘ ‘ There was a question of assignment or subletting.”
And on page 5:
“The onfy thing that can be urged, and in fact is urged, in support of the position taken by the plaintiff in that regard, is the fact that the time limit named in the two leases is identical. But the authorities cited seem to me to clearly show that the word term does not merely signify the time specified in the lease, but the estate also, and it is an elementary principle in interpreting all contracts'that, if the intention of the parties is clear from the instrument itself, the intention should govern. How then can it be contended in this case that such was the purpose of drawing up that formal instrument, specifically setting forth the intention of these parties, their agreement with reference to this property, not only as to the amount as to the time that the contract should run, but that at the end of that time the property should be re-delivered to Tseliirret; that it should lie re-delivered to him if the rents were not paid to him; or if statutes of the state of the rules prescribed by the board of health are not complied with; or if liquors are sold in the premises contrary to the law governing the same, etc. ' And if Tschirret may enter under a forfeiture of the lease, has he not something there, some interest? Did not this agreement contemplate some interest in Tseliirret? The term of this lease did not mean merely the time it had to run, but it had some reference also to the estate that was conveyed.”
These seem to be all the Ohio authorities, but many cases of both sides have been cited to me from other jurisdictions.
. Dunlap v. Bullard, 131 Mass., 161, 162; suit on covenant to pay taxes. Entire term leased, increased rent, with right of
“It is clear that the parties to this lease intended to create the relation of landlord and tenant between themselves. And it is the duty of the court to give effect to this intention, unless controlled by some positive rule of law.
“To constitute an assignment of a leasehold interest, the assignee must take precisely the same estate in the whole or in a part of the leased premises which his assignor had therein. He must not only take for the whole of the unexpired time, but he must take the whole estate, or, in other words, the whole term; for, in the language of Blackstone, the word ‘term’ does not. merely signify the time specified in the lease, but' the estate also and interest that passes by that lease.”
To the same effect are, Drake v. Lacoe, 157 Pa. St., 17, 38; Wheeler v. Hill, 16 Mo., 329. 334; Collamer v. Kelley, 12 Ia., 319, 323; Jones v. Kansas City, 99 Mo. App., 433; Mayhew v. Hardesty, 8 Md., 479, 495; Townsend v. Read, 15 Abb. N. C. (N. Y.), 285.
The New York court seem to have great difficulty in arriving at harmony on this question. The early cases were to the effect that if the lessee demised his whole term, at different rent and with the right of re-entry for breach of covenants, it was a sublease and not an assignment. Post v. Kearney. 2 N. Y., 394; Martin v. O’Connor, 43 Barb., 514: Collins v. Hasbrouck, 56 N. Y., 157; Ganson v. Tift, 71 N. Y., 48, 54, 55.
But in 1886 (102 N. Y., 601), came the case of Stewart v. Long Island Railroad Co., which plainly and clearly reversed all the prior holdings in New York, though the judge who wrote the opinion attempted to distinguish that case from the earlier decisions. Tt is to he noted also that there is a very strong dissenting opinion by Judge Finch. If the doctrine as laid down in that ease is the law of Ohio, then the making of the ninety-nine year lease from the Commercial Real Estate Company to Brown is an assignment. Nor will the fact that the Commercial Real Estate Company had an option to purchase, nor the fact that they intended to elect to purchase, and that they had the $90,000 ready, to tender on the day named.
Blackstone had stated the rule in Dunlap v. Bullard, supra that if the lessee retain some estate, some interest, then it was an underletting and not an assignment.
In Fulton v. Stuart, supra, the court says the second lessee must hold the "whole term” of the lessee; and in St. Clair v. Williams, supra, says that the assignee is he who holds the "whole estate or term,” while Jones v. Smith, supra, says that it must be the "whole term and the whole interest;” and furniture not being conveyed, it was held that the whole interest was not conveyed.
This same language is used in Worthington v. Ballauf, and Powder v. Neiss, supra.
The contract in question between Cross, Pack and Vliet was an entire contract relating to two subjects of the law, a lease for fifteen years and an option to purchase on the last day of the term. It was one indenture, one contract and supported by one consideration. If each of the parties to that contract did as he had agreed to do with reference to the option, the defendant should, on the last day of the lease, have had a deed to the premises and would have been the owner of the fee before the lease expired. It is true that, as soon as the defendant had executed the ninety-nine year lease to Brown, on March 10, 1909, the defendant had no reversion left in him, but if the cases of Ohio arc properly construed by me, the lessee, the Commercial Eeal Estate Company, after the execution of the ninety-nine year lease, still had some interest in the premises— they had intended to have. They might re-enter for violation or breach of Brown’s covenants. They had a larger rent reserved; a better and more expensive building was provided for; there were different coveaaants as. to insurance, and they had a valid,
I am bound to say that this holding is flying in the face of the text-books and manj'- decisions, but the weight of the reasoning, according to my judgment, is that there was no assignment, and the court so holds.
Very able briefs have been presented in this case. The court is fortunate in having had the ease so well presented. Every ease cited has been in point, and in over three hundred pages of brief I have not found a single wrong quotation.
Finding as I do, it is not necessary for me to discuss Dumper’s ease, but I desire to say that I trust the law of that ease will never be adopted in Ohio.
After a careful reading of the briefs and a consideration of the facts, I find no waiver and no estoppel.
,. The petition is dismissed, and decree of specific performance on .the cross-petition.