Abrahamson v. Brett

• Decision Date: 25 April 1933
• Citation: 21 P.2d 229,143 Or. 14
• Parties: ABRAHAMSON v. BRETT et al.
• Court: Oregon Supreme Court

21 P.2d 229

143 Or. 14

ABRAHAMSON v. BRETT et al.

Supreme Court of Oregon

April 25, 1933

Department 2.

Appeal from Circuit Court, Klamath County; W. M. Duncan, Judge.

This is an action by Bertha J. Abrahamson, the owner of a building in Oakland, Cal., to collect rent from defendant John Brett upon his covenant to pay rent in the lease of said building. Defendant G. Kelly was not served with summons and did not appear. From a judgment in favor of plaintiff and against defendant John Brett, defendant appeals.

Affirmed.

In action for rent, where defendant lessee's liability depended upon written instruments, court properly directed verdict.

Wilson S. Wiley, of Klamath Falls (G. Q D'Albini, of Medford, on the brief), for appellant.

William Ganong, of Klamath Falls, for respondent.

BEAN Justice.

On June 26, 1928, George W. Anderson leased certain premises in Oakland Cal., to John Brett and G. Kelly, for a period of five years, from July 15, 1928, at a monthly rental of $150 per month. The lease was in writing. At the time of the execution of the lease, the lessees paid to the lessor the sum of $450, $300 of which was to apply on the last two months' rental and the balance of $150 to apply on the first month's rental. About six months after the execution of the lease, George W. Anderson sold the premises and assigned the lease to Bertha J. Abrahamson. John Brett and G. Kelly continued to pay the monthly rental to the new owner until August 22, 1929, when they sold their business, conducted on the premises, to P. A. Nielsen, and assigned the lease to Nielsen. The lease provides that it cannot be assigned without the written consent of the lessor. Hugo Abrahamson is the husband of Bertha J. Abrahamson, and transacted the business pertaining to the lease as her agent. The assignment of the lease, the written acceptance of the assignment by P A. Nielsen, and the written consent to the assignment of the lease by Hugo Abrahamson, husband and agent of plaintiff, were as follows:

"Oakland, California, August 22nd, 1929. For Value Received, we hereby assign, transfer and set over unto P. A. Nielsen, of Oakland, California, all our right, title and interest in and to that certain lease dated June 26th, 1928, given by George W. Anderson as Lessor, and the undersigned as lessees. John Brett. G. Kelly."

"Oakland, California, August 22nd, 1929. I hereby accept the above assignment, and agree to all of the terms and conditions contained in said lease. P. A. Nielsen."

"Oakland, California, August 22nd, 1929. The undersigned hereby consents to the assignment and transfer by John Brett and G. Kelly to P. A. Nielsen of that certain indenture of lease dated the 26th day of June, 1928, said consent given with the understanding that it does not release John Brett nor G. Kelly from any of the terms and conditions of said lease, but shall recognize John Brett and G. Kelly in said lease until the full terms and conditions in said lease shall have been fulfilled. Hugo Abrahamson."

Defendant John Brett interposed a demurrer to the complaint on the ground that the court had no jurisdiction of the subject-matter of the action and that the complaint did not state facts sufficient to constitute a cause of action against the defendant. Defendant assigns error of the trial court in overruling the demurrer for the reason that the leased real property is located in Oakland, Alameda county, Cal., and contends that the plaintiff bases her action on the theory of privity of estate.

Section 7-107, Oregon Code 1930, provides that, when the court has jurisdiction of the parties, it may exercise it in respect to any cause of action or suit wherever arising, except for the specific recovery of real property situated without the state, or for an injury thereto. Section 1-403 provides that all actions except those for the recovery of real property or an estate or interest therein or for injuries to real property and those for recovery of penalties and those against a public officer shall be commenced and tried in the county in which defendants, or either of them, reside or may be found at the time of the commencement of the action.

The defendant John Brett testified that he lived at Klamath Falls, and summons was served upon him in Klamath county. Actions for recovery of rent, where brought by the lessor against the lessee, being founded on mere privity of contract, and not upon privity of estate, are transitory, and may be brought out of the state in which the demised premises lie. 16 R. C. L. 1000, § 517; 40 Cyc. 35, § C.

The action, being founded upon privity of contract to pay the rent involved, is transitory and was properly commenced in the county in which one of the defendants resided. The action was properly brought in Klamath county.

The action against John Brett, one of the lessees, is founded upon privity of contract; that is, upon an express contract to pay the rent. Peterson v. Dose, 124 Or. 30, 35, 263 P. 888, 889; 16 R. C. L. 844, § 344.

Defendant contends that the court erred in overruling the demurrer to the complaint interposed by John Brett, defendant, because the complaint upon its face shows that plaintiff had selected in advance her remedy for breach of the contract by demanding and receiving from the original lessees the sum of $300 "to apply as last two month's rent." It is further provided in the lease as follows: "Provided, however, that if the Lessee shall have faithfully performed all of the terms and conditions of this lease and if this lease is then in effect, the Lessor shall remit the last and final installment of rent to the extent of $300."

The lease contains the follows clause: "It is agreed that each and all of the rights, powers, options or remedies given the Lessor by this lease are cumulative, and no one of them exclusive of the other or exclusive of any remedies provided by law, and that the exercise of one right, power, option or remedy by the Lessor shall not impair his right to any other."

The payment of $300, the amount of the last two months' rent in advance, was simply a payment for the rent of the lease for that time and not security for the performance of the lease. In the absence of any provision therefor in the lease, such advance payment thereby became the absolute property of plaintiff. Sinclair v. Burke, 133 Or. 115, 118, 287 P. 686, 687. The advance payment for the last period of the lease differs from that involved in Menefee Lbr. Co. v. Abrams, 138 Or. 263, 272, 5 P.2d 709, where the lease recites the receipt from the landlord for the sum of $900 as consideration for the execution of that instrument and the lease contained no indication that any sum was deposited as a guaranty for unpaid rent. The provision in regard to the payment of the $300 would not preclude plaintiffs from exercising other remedies. The plaintiff has never declared a forfeiture of the lease at any time. Brett and Kelly are still the lessees of the building. When Nielsen defaulted in the payment of the rent, the plaintiff notified defendant Brett of such default and that he was responsible for the rent. The plaintiff did not take possession of the leased premises. There was no surrender of the leasehold estate to the plaintiff at any time.

The second ground of demurrer that the complaint does not state facts sufficient to constitute a cause of action raises the same question as that involved in the motion for directed verdict, and the question may be considered together with the third and fourth assignments, which relate to the liability of defendant upon the covenants of the lease to pay the rent.

At the close of the testimony plaintiff moved for a directed verdict for the sum of $2,880 and the attorney's fees demanded in the complaint, for the reason that there is no testimony of any kind that would be a defense, in this: That all of the testimony which had been offered in any way is a direct contradiction of the written instruments, which it is agreed were signed, and the court directed a verdict to be entered accordingly. This ruling is assigned as error.

We take the following from 2 Tiffany, Landlord and Tenant, 1328, § 190: If the original tenancy is in full force, the lessee remains liable on the covenants entered into by him, while, if the assignee can be regarded as receiving from the landlord a new lease, a surrender occurs, and the lessee is no longer liable on his covenants. The mere fact that the landlord, after making the assignment, in some way recognizes the assignee as holding, not under the old tenancy, but under a new one, may be asserted by the tenant as the making of a new lease so as to effect the surrender. It is sometimes said that the lessee is relieved from liability under his covenants if the landlord accepts the assignee "as his tenant," but this is incorrect. The landlord almost invariably accepts the assignee as his tenant and yet the continuing liability of the lessee is generally recognized. The landlord must, in order to thus relieve the lessee from liability, not only accept the assignee as his tenant, but must also, tacitly or expressly, accept him as a tenant holding under a new demise; that is, he must, in effect, make a new demise to him. It is further stated in that work: "It has been the law for many years that the landlord may sue either the lessee or his assignee on such a covenant or may sue both of them." Id. 1330, § 190.

In the absence of any covenant in the lease to the contrary, a tenant has the right to sublet leased premises or any part thereof. Maddox v. Westcott, 156 Ala. 492, 47 So 170, 16 Ann. Cas. 604. As between the lessor and assignor, an assignment of the term and the acceptance of the assignee as tenant discharges the lessee from all obligations...