Marathon Oil Co. v. Rone, 13151.

Citation83 S.W.2d 1028
Decision Date26 April 1935
Docket NumberNo. 13151.,13151.
PartiesMARATHON OIL CO. et al. v. RONE et al.
CourtCourt of Appeals of Texas

Appeal from District Court, Tarrant County; Frank P. Culver, Jr., Judge.

Suit by A. W. Rone and others against the Marathon Oil Company and another. From a judgment in favor of plaintiffs, named defendant appeals.

Affirmed.

R. C. Gwilliam, of Tulsa, Okl., and Hiner & Pannill and Thompson & Barwise, all of Fort Worth, for appellant.

Arthur Lee Moore, of Fort Worth, for appellees.

LATTIMORE, Justice.

A. W. Rone leased a filling station to the Three D's Products Distributors in May, 1930, for two years. During the existence of this lease the Three D's gave appellant an option on all its properties, including this lease, such option to expire December 1, 1930. Believing this option would be exercised, the Three D's executed an assignment of this lease to appellant. The option was extended to December 6, 1930, and one of the specifications required by appellant was that this lease be extended five years. Three D's procured this extension to itself at an advanced rental for the extension period, informing Rone of the prospective sale and reasons for the needed extension. It was attached to the assignment and delivered to appellant in the consummation of the purchase by appellant of the Three D's properties and the Three D's paid appellant the difference between the two-year rental rate and that for the five years' extension.

Appellant paid the rent monthly to the expiration of the two years' lease and then vacated the premises.

This suit is against appellant and the Three D's for the amount of rentals for the five years less payments received by Rone from other tenants during that period.

Three D's answered that it was the mutual intention of appellant and Three D's that the assignment to appellant cover the five years' extension, and that same was not included in the written lease by mutual mistake, and alleged and proved excuse therefor deemed sufficient by the trial court, and prayed inter alia for reformation of the assignment to include the five years' extension.

The assignment does not in such words state that appellant assumed the lease of Three D's, and appellant contends that it was under no obligation to Rone except during such time as it actually occupied the premises, and that when it delivered to Rone its acknowledgment that it no longer claimed any right of tenancy, and vacated, it was under no further liability by the lease being in privity to Rone to that time in estate only and not in contract.

While by the decisions of the various states there is difference of holding, McLean v. Caldwell, 107 Tenn. 138, 64 S. W. 16; Cohen v. Todd, 130 Minn. 227, 153 N. W. 531, L. R. A. 1915E, 846; Kanawha-Gauley Coal & Coke Co. v. Sharp, 73 W. Va. 427, 80 S. E. 781, 52 L. R. A. (N. S.) 968, Ann. Cas. 1916E, 786, we believe that the rule in Texas is that where the transfer of possession is an assignment of the whole estate of the tenant, the transferee, prima facie, is liable for the rental for the entire period of the lease. It is so stated in Davis v. Vidal, 105 Tex. 444, 151 S. W. 290, 293, 42 L. R. A. (N. S.) 1084, as follows: "The following test may be applied to determine whether the instrument in question is an assignment of the original lease, or a subletting of the premises: If it is an assignment, its legal effect must be a transfer of the right of possession of the property conveyed to Vidal and the creation of a privity of estate and contract between Mrs. Davis, the original lessor, and Vidal, to whom the possession was granted by the Dallas Brewery. This would be essential to constitute the instrument an assignment, and if it was an assignment Vidal obligated himself to pay the rent to Mrs. Davis."

Applying that test, our Supreme Court held the transfer there litigated to a subletting only.

Speed v. Jay (Tex. Civ. App.) 267 S. W. 1033, 1035 (Amarillo) is directly in point on the facts. Gilliland, an intermediate tenant, was held liable for rent after he had vacated and assigned his lease. "It may be true, as found by the jury, that Gilliland did not `orally assume the performance of the remainder of the lease contract,' but when he took an assignment of the lease he became bound, as a matter of law, to pay the rents and discharge the other obligations which it imposed upon the lessee. Davis v. Vidal, 105 Tex. 444, 151 S. W. 290, 42 L. R. A. (N. S.) 1084; Jackson v. Knight (Tex. Civ. App.) 194 S. W. 844."

In Johnson v. Neeley (Tex. Civ. App.) 36 S.W.(2d) 799, 801 (Waco), Johnson was an intermediate tenant. Holding him liable for rents after he surrendered possession, the court said: "While Johnson denied specifically that he assumed the obligations of said lease or that he ever even heard of the same, he paid rent from the time he began the occupancy of said building until April 1, 1928, at the rate of $112.50 a month, as stipulated therein. * * * Johnson alleged, in substance, that prior to September 1, 1928, he abandoned the occupancy of said building; that thereupon said Jones occupied the same; that Mrs. Delaney knew of such occupancy, and accepted rent from said Jones, and thereby estopped herself from claiming rent from him, the said Johnson. The only testimony bearing on this contention is that Johnson got the August rent from Jones, paid the same to Sleeper, took his receipt therefor and told him at the time that Jones was occupying the premises and would pay subsequent rentals. There is no contention that Jones did so. The gist of Johnson's contention is that a finding that Mrs. Delaney accepted rent from Jones with knowledge of the facts would release him as a matter of law. This contention is contrary to the authorities in this state and elsewhere. Cauble v. Hanson (Tex. Com. App.) 249 S. W. 175, 176 et seq., and authorities there cited; Id. (Tex. Civ. App.) 224 S. W. 922, 923 et seq.; McCelvy v. Bell (Tex. Civ. App.) 6 S.W.(2d) 390, pars. 2 and 9; Davis v. First Nat. Bank of El Paso (Tex. Civ. App.) 258 S. W. 241, pars. 6 and 7; Gray v. Tate (Tex. Civ. App.) 251 S. W. 820, pars. 2 and 3; Goffinet v. Broome & Baldwin (Tex. Civ. App.) 208 S. W. 567, par. 4."

In Leonard v. Burton (Tex. Civ. App.) 11 S.W.(2d) 668, 670 (El Paso), Leonard was an assignee tenant who had surrendered possession. The court there said: "Regardless of an...

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