118 Va. 98 | Va. | 1915
delivered the opinion of the. court.
On the 24th day of February, 1912, F. F. Hash and F. P. Stras, by deed leased to one Frank Brunton for a term of five years a certain farm of ninety-eight acres situated in Princess Anne county, Virginia, on an annual rental, to be paid as set
Brunton, the lessee, entered into possession of the leased premises under the lease, for the purpose, as the lessors knew, of establishing thereon a plant farm. He had no capital, and in the spring of 1912 interested Admiral A. O. Dillingham (a retired naval officer) in his enterprise to the extent that Admiral Dillingham advanced to him the sum of $2,000 under a verbal understanding that he (Admiral Dillingham) should have an interest in the profits of the operation of the plant farm. Soon thereafter more capital was required, and Admiral Dillingham indnced his brother, Frank O. Dillingham (a retired capitalist) to invest additional sums of money in the undertaking. Subsequently, in order to acquire all needed
Some weeks afterwards Nash and Stras returned the contract of lease duly signed and acknowledged by their respective wives, but Stras advised the attorney for the corporation that Nash was unwilling to modify the lease with reference to improvements, which was not regarded as of much importánce, in which conversation, according to Stras’ version of it, he stated to said attorney: “I talked with Nash and Nash said: ‘We want the whole contract just as it is,’ and I so told Kanny Hicks and he finally said that they would take it, then he said he would prepare a paper for us to sign, transferring this (the lease) to the Franklin Plant Farm, which he never did.”
On the 25th day of August, 1912, Brunton, by deed, assigned and transferred to the Franklin Plant Farm, Inc., the premises held by him under the said lease containing this provision: “Said lease from Stras and Nash to Brunton is hereby referred to and made a part hereof as fully as if copied herein.”
The operations of the corporation were then vigorously pushed, the dwelling on the farm was repaired, large stables erected, iraigation plants installed, hotbeds constructed, packing house constructed, pumps installed, grain house erected,
Tip to this time Admiral Dillingham and his brother had advanced to the corporation approximately $20,000, but it was found necessary to have a working capital, and to that end the corporation borrowed $3,000 from a bank in Horfolk city, securing the loan by a deed of trust executed on the 16th day of January, 1913, by the corporation in its corporate name, to P. Randolph Hicks, trustee, which deed conveyed the leasehold interest in the property as well as stock, implements, etc., thereon, to secure the payment of said loan evidenced by note of the corporation of even date with the deed of trust, payable four months after date.
It appears that after the execution of this deed of trust some friction arose between Admiral Dillingham and Brunton, president of the corporation, growing out of the discovery by the former that the operation of the farm by the latter was being conducted on an extravagant scale, in that Brunton was attempting to expend excessive sums of money; whereupon, Admiral Dillingham determined not to make further advances and to get rid of Brunton. As a result, when said note fell due on the 16th of May, 1913, it was not paid, and the bank instructed the trustee to advertise the property for sale, which the trustee did, the sale to take place on the 18th day of July, 1913. On July 14, 1913, Hash and Stras took possession of the farm and all improvements thereon, appropriating the same to their own use, employing Brunton as their agent to keep Admiral Dillingham off the premises, which entrance upon the premises by Hash and Stras it is charged by the corporation was taken by force and violence, the Admiral being an elderly man, and Brunton a young man and his physical superior, and this entry was made notwithstanding the rent for the premises had been paid by the Messrs. Dillingham up to January 1,1914.
It does not appear that Hash and Stras knew of the existence of the deed of trust until after the advertisement of the sale thereunder by the trustee, but they did know of the assignment by Brunton of his lease to the said corporation, and assented to the assignment, as shown by the following letter:
“Horeolk, Va., May 16, 1918.
“Franklin Plant Farm, Inc.,
Oity.
“Gentlemen :—Kindly have the insurance policy which yon carry on your residence on your farm sent to us, as we have a loan on the farm and the bank demands this policy as collateral. Kindly give this your prompt attention and oblige,
“Yours very truly,
“Hash & Stras.”
Possession of the leased premises, together with all the improvements that had been installed thereon, having been taken by the lessors, Hash and Stras, in the manner above stated, the Franklin Plant Farm, Inc., brought this action of trespass on the case against them to recover damages alleged to have been sustained by the plaintiff as a result .of the said acts of the defendant, and at a trial of the cause the jury rendered a verdict for the defendants, which verdict the court refused to set aside and entered judgment thereon, to which judgment this writ of error was awarded.
Of the errors assigned in the petition for the writ of error, three relate to the rulings of the court in the granting and
The court gave for the defendant, over the objection of the plaintiff, four instructions, B, D, E and F (which appear in the statement of the case), these instructions being, as the plaintiff contends, equivalent, under the facts above set out, and practically not controverted, to an instruction to find for the defendant. The court also gave, of its own motion, instructions designated as 4 and 5 (which also appear in the statement), and refused- to give the following instructions asked by the plaintiff:
“The court instructs the jury that the deed of trust to R. R. Hicks, trustee, shown in evidence, was not in itself a violation of the clause in the lease prohibiting assignment by the lessee. Tn order that said deed of trust should operate as such an assignment, the jury must believe that the trustee or his assignee actually took possession of the premises described in the lease.
“The jury are further instructed that should they believe from the evidence that the defendants committed the acts complained of in the declaration, and that said acts were committed wantonly and maliciously in order to illegally get possession of the premises described in the declaration, then the plaintiff is entitled to recover not only the determinable money loss which the evidence may show it sustained, but such exemplary and punitive damages as in their opinion are called for by the circumstances of the case, and the jury are instructed that punitive or exemplary damages are damages which are allowed when one party has injured the other in a wanton, willful and oppressive manner in disregard of his rights, as a warning to him and other persons to prevent them from committing like offenses in the future.
“The jury are instructed that the deed of trust from the
It is readily to be observed that the contention of the plaintiff in the court below was, and is here, that the clause in the lease to Brunton restricting assignments and subletting of the leased premises, was not a continuous covenant, but a single covenant, which once waived by the lessors could not thereafter be retracted, and the trial court, as it will be seen upon reading its instruction Wo. 4, expressly told the jury that if Brunton assigned the lease to the plaintiff, and the defendants, with knowledge of that fact, accepted rent, or permitted the plaintiff to expend money in improving said property, then such conduct on the part of the defendants was a waiver of the condition as to the assignment so far as the assignment to the plaintiff was concerned, and further, that if the defendants once waived said condition, they thereupon discharged said condition, but the court, in view of the evidence as to what passed at the interview between Stras, on the one hand, and attorney Hicks and his client, Dillingham, on the other, with respect to the proposed assignment of the lease to the plaintiff, added to the instruction, and properly so, the following: “provided you believe the assignment to the corporation was made without limitations or conditions as to reassignments, in which event it had the right to assign said leasehold interest as if no condition to the contrary had ever been imposed, and the execution by it of a deed
The evidence as to the interview between Stras, on the one hand, and Hicks and Dillingham, on the other, left little or no room to question, that when the interview terminated it did so with the terms of the proposed assignment by Prunton of his lease to the plaintiff unsettled, and that as soon as Nash was informed of that interview he declined to consent to any assignment of the lease which varied in any particular the original terms thereof, and there the matter rested, it seems, till after the leased premises were advertised for sale by Hicks, trustee, when the defendants re-entered upon the premises and ousted the plaintiff of its possession thereof.
Summarized, the undisputed facts are that the leasehold interest in question was assigned to the plaintiff with the knowledge and consent of the defendants, and in order to effectuate it they had their respective wives to sign it, by reason of the statement of the attorney for said corporation that the company would not take the assignment unless the respective wives of the defendants did sign the original lease; that the defendants, with knowledge that the assignment had been made, accepted the rent stipulated for in the lease from the plaintiff for a period extending over a year, and gave it receipts for the rent; that they still retain the rent so paid for the months intervening between July, 1913, and January, 1914, during which period they had forcibly taken possession to their own use of the leased premises and the improvements, etc., that had been put thereon by the plaintiff; that they allowed the plaintiff to insure the buildings on the farm and requested it to pay the premium on the insurance; that they sold hotbed sash to the plaintiff to an amount exceeding $1,000, which was paid for by the plaintiff upon the delivery of the sash to it on the leased premises, and then, within a few months, forcibly ejected the plaintiff from the leased premises and appropriated, not only the premises,
This question is, so far as we are advised, one of first impression in this State, and, in view of the facts in this case, presents, as counsel for the plaintiff suggests, a rather novel aspect. It is nowhere suggested in the record that the execution and delivery of the deed of trust upon the leasehold and other property by the plaintiff, merely to secure the payment of a debt, in any way operated as a wrong or an injury to the defendants, the lessors of the leased premises. Ho sale had been made under the trust deed, and, therefore, no change of possession under it had taken place when the lessors forcibly re
An assignment or the subletting of leased premises necessarily carries with it the right of possession of the premises to the assignee or subtenant, but such is not the case where the lessee in the original contract, or his transferee, merely executes a deed of trust upon the leasehold to secure the payment of a debt. Certainly there is an important distinction between the assignment or subletting of leased premises and the execution of a deed of trust thereon securing the payment of a debt, where the trustee, as in this case, is given no right of possession, no control over the demised premises, no right to the rents and profits accruing from the operation of the farm, no rights of property therein, all of which rights are, under the express terms of the deed, reserved to the grantor; so that the deed conferred upon the trustee the bare legal title to the property conveyed, seized with no beneficial interest therein, and clothed with no authority to enter upon the premises or to take possession thereof.
The deed of trust, which dispenses with the necessity of a foreclosure suit, has almost entirely taken the place in this State of a mortgage as a security for the payment of a debt. The authorities seem to hold with unanimity that a mortgage is never construed as such an assignment of a leasehold interest as to cause a forfeiture under a covenant in the lease prohibiting assignment, unless it be that the mortgagee has an absolute right to enter on the property or to sell the estate of the lessee in the leasehold, and actually exercises such authority. Taylor on Landlord and Tenant, sec. 406; Underhill on Landlord and Tenant, secs. 607, 627; Riggs v. Purcell, 66 N. Y. 200; Krouse v. Mitchell, 130 Mich. 347, 90 N. W. 32, 97 Am. St. Rep. 479.
In Krouse v. Mitchell, supra, the Court of Appeals of Michigan held that a condition in a lease prohibiting its transfer or assignment, was not violated by an assignment of the leasehold interest as security for an indebtedness.
“A deed conveying land to a trustee as mere collateral security for the payment of a debt when due, and with power to the trustee'to sell the land and pay the debt in case of default on the part of the debtor, is a deed of trust in the nature of a mortgage.” Sandusky v. Farish, 40 W. Va. 150, 38 S. E. 563.
In the case of Bowser v. Colby, 1 Hare 109, it was held “that
It is conceded in this case that forfeitures are not favored in law, and while the proceeding in the case last cited and quoted from was in equity, the reasoning of the court in that case, as well as in the other authorities we have cited, applies equally as well to the facts in the case we are here considering, and we are of opinion that the trial court should have instructed the jury, at the request of the plaintiff, that the execution and delivery of the deed of trust from the plaintiff to Hicks, trustee, conveying the leasehold interest in the real estate in question, was not such an assignment thereof as violated the provisions against assignment contained in the contract of lease exhibited in evidence; that in order that said deed of trust could act as such an assignment, it was necessary that there should have been not only a sale under the deed of trust, but the purchaser at such sale should have complied with the terms thereof, thereby entitling him to enter in possession of the leasehold insofar as the authority of the trustee in the deed of trust could license him to do so; and that if the jury believed from the evidence that said sale was never consummated and a purchaser thereof put in position to take possession of the leased premises, there was no such assignment as was inhibited in the lease.
The court, instead of instructing the jury on the question of damages, as requested by the plaintiff in its first instruction, set out above, gave its own instruction, numbered 5, which appears in the statement of the case. We are of opinion that in the instruction the court rightly instructed the jury as to the measure of the damages, if any, that the plaintiff was entitled to recover in the case for the determinable money loss which the evidence showed it had sustained, but failed
Upon the facts which the evidence tended to prove, the plaintiff was unlawfully dispossessed of the leased premises in question, and the permanent improvements, as well as the implements and other plant-growing utensils put thereon by the plaintiff, and if the jury, by their verdict, had so found, the plaintiff would have been entitled to recover damages for its injuries as stated in the court’s instruction No. 5, supra; but the evidence, as we view it, also tended to prove a case for exemplary or punitive damages, and that feature of the case should also have been submitted to the determination of the jury.
“A tort committed by mistake in the assertion of a supposed right, or without any actual wrong intention, and without such recklessness or negligence as evinces malice or conscious disregard of the rights of others, will not warrant the giving of damages for punishment, where the doctrine of such damages prevails.” Suth. on Dam. (2d Ed.), sec. 383; N. & W. Ry. Co. v. Neely, 91 Va. 539, 22 S. E. 367; Burruss v. Hines, 94 Va. 413, 26 S. E. 875.
“The general rule in awarding damages is to give compensation for the pecuniary loss—to make amends or reparation for the injury inflicted. The plaintiff is entitled to recover all such damages as are the natural and proximate results of the wrongful act complained of.” Raven Red Ash Coal Co. v. Herron, 114 Va. 103, 75 S. E. 752.
But where the wrongful act is done with a bad notice, or with such gross negligence as to amount to positive misconduct, or in a manner so wanton or reckless as to manifest a willful
The remaining assignment of error is to the refusal of the court to set aside the verdict of the jury because contrary to the law and the evidence, and need not be considered, as the case, for the reasons stated, has to be remanded for a new trial therein in accordance with the views expressed in this opinion.
The judgment of the circuit court is reversed and the cause remanded.
Reversed.