Barth v. Ely
| Decision Date | 21 June 1929 |
| Docket Number | 6448. |
| Citation | 278 P. 1002,85 Mont. 310 |
| Parties | BARTH v. ELY. |
| Court | Montana Supreme Court |
Appeal from District Court, Yellowstone County; G. J. Jeffries Judge.
Action by Annie Barth against Stephen Ely. From a judgment of dismissal, plaintiff appeals. Affirmed.
M. J Lamb, of Billings, for appellant.
Brown Wiggenhorn & Davis, of Billings, for respondent.
Appeal from a judgment dismissing plaintiff's action for rent alleged to be due her from defendant on a hotel building in Billings.
The complaint filed herein alleged that in February, 1920, A. H. Barth, husband of the plaintiff, was the owner of the Carlin Hotel, which he then leased to Stephen Ely and R. D. Jones for a term of four years, at a monthly rental of $405, and immediately thereafter conveyed to the plaintiff, Annie Barth; that the joint lessees operated the hotel until November, 1925, when Jones assigned all his interest to Ely, who continued to hold over and operate the hotel until the latter part of December, 1926, but failed and neglected to pay the rent the first of each month from May to December. Plaintiff's claim is set forth in two causes of action; the first for the stipulated rent for each of the eight months mentioned, with interest from the date each amount is alleged to have fallen due; the second for the same amounts as the reasonable rental value of the premises for each of those months, with like interest.
Defendant pleaded the defense that he did not hold over, after the expiration of the lease mentioned, but was, at all times from January 1, 1924, to December 24, 1926, holding under the written lease, duly extended pursuant to the express terms thereof; that the lease expressly provided that the rent should be paid in advance and gave to the landlord a lien upon all of defendant's personal property in the hotel as security for such payment, to be enforced by seizure and sale "in the same manner as in the case of chattel mortgages on default thereunder," which provision was in fact a chattel mortgage amply securing plaintiff for the payment of the rent as it fell due, but that plaintiff never sought to exercise the power of sale as expressly provided for in the "mortgage clause" of the lease, and is therefore barred from maintaining this action.
By reply plaintiff denied that she had any lien upon defendant's property or that such property had a value in excess of $1,600, and alleged that on May 20, 1926, defendant mortgaged the personal property in the hotel to a bank to secure a note for $1,500, and on October 9, 1926, placed a second mortgage thereon to secure the payment of a note for $1,000, which mortgages were duly filed in the office of the clerk and recorder by the mortgagee, who had no notice or knowledge of the lien clause in the "mortgage," and therefore if a lien ever existed it was wrongfully and willfully destroyed, and plaintiff's security rendered valueless by the defendant, who is thereby estopped from asserting that her sole remedy is by foreclosure.
At the time the action was commenced, plaintiff attached the personal property in question and, in order to do so, paid the mortgagee the full amount due on its mortgage notes, amounting to $2,689.56, and, a week after defendant's answer was filed, caused the mortgaged property to be sold at sheriff's sale on foreclosure of the mortgages; it brought but $1,628.05. In the meantime defendant had moved the court to discharge the attachment, which motion was overruled on March 16, 1927. These matters plaintiff set up in a supplemental reply and therein alleged that the matters set up in defendant's answer "were adjudged and determined" by the order overruling the motion to discharge the attachment; that the order is still in full force and effect and no appeal has been taken therefrom.
A jury trial was had, but at the close of all the testimony it was stipulated by counsel and ordered by the court that, as questions of law alone were presented except as to two matters, no general verdict should be submitted to the jury. Special interrogatories were submitted on the two questions requiring findings on the evidence, and, in answer to these, the jury found: (1) That all of defendant's personal property in the hotel at the time of the commencement of the action had a value of $2,600, and (2) that the reasonable rental of the hotel building from May to December, 1926, was $375 per month. The jury was discharged and the matter taken under advisement. Thereafter the court found, as a matter of law, that "on the undisputed evidence as well as the jury's findings, the plaintiff is not entitled to recover * * * and the action should be dismissed on the merits," thus, in effect, finding that each of the allegations of the defense was true. Judgment of dismissal followed. Plaintiff has appealed from the judgment and, by appropriate specifications of error, raises the questions hereinafter discussed.
1. The first question raised is as to the sufficiency of the evidence to warrant a finding that the written lease was extended from and after January 1, 1924.
The lease, made a part of the answer, provides that the "lessees may, at their option, by serving upon the lessor a notice in writing at least ninety (90) days before the expiration of the term thereof, extend the term of this lease for a further period of five (5) years from January 1, 1924." On March 20, 1923, more than 90 days prior to the expiration of the term of the lease, Jones, as manager of the hotel, wrote the landlord that
On November 28, 1925, Jones assigned his interest in the lease to defendant by indorsement thereon which recites: "The parties hereto having exercised their option as shown in said lease to extend the term thereof for the five-year period as provided for in said lease. * * *" The assignment was submitted to the plaintiff, as lessor, for her approval or rejection, and she endorsed thereon:
Plaintiff contends that the letter of March 20, 1923, was but notice of the lessees' "intention" to avail themselves of the option given, and, in view of the fact that defendant alleged that the lease was extended in November, 1925, the letter was immaterial and irrelevant, and a notice given in 1925 would be ineffective. Error is not specified in admitting the letter in evidence and it is before us for consideration; while it expresses an intention to take advantage of the option, rather than an election then and there to exercise the option, it is reasonably clear that the parties treated the lease as extended; almost two years after the expiration of the term of the original lease the plaintiff recognized the lease as in existence by consenting to an assignment of an interest therein.
Independent of the notice and recognition of the extension, the rule is that where a lease contains such an option, the mere holding over after the expiration of the specified time will constitute an election to hold for the additional or extended term (35 C. J 1036, and cases cited); such holding over is not from year to year, but "the continued possession is referred to the renewal" (Insurance Building Co. v. National Bank, 71 Mo. 58); the original lease becomes a demise for the extended term and needs no renewal ( Crowder v. Bank of Commerce, 127 Va. 299, 103 S.E. 578).
2. Plaintiff contends that, even though the defendant was holding the premises under the written lease, the clause in question created a lien and not a mortgage, and that under section 8233, Revised Codes 1921, she had the right to waive the lien and sue for the amount due as rent, asserting that section 9467 applies only to mortgages, as such, which have been executed with all the formalities required by statute. The fallacy of this position is demonstrated when we consider the statutes upon which plaintiff relies, the history of our law of mortgages, and the former decisions of this court thereunder, which, having been followed and acted upon for many years, cannot now, under the doctrine of stare decisis, be disturbed.
While a stipulation in an instrument for a lien on personal property is inconsistent with the idea of a chattel mortgage in those states wherein a mortgage is held to pass title to the property (11 C.J. 404, and cases cited), for the reason that the transfer of title creates no lien (State ex rel. Malin-Yates Co. v. Justice of the Peace, 51 Mont. 133, 149 P. 709), the converse of the rule existing in those states pertains in this state. Here a mortgage passes no title but creates a lien upon the property as security for the payment of a debt or the performance of an act (sections 8246 and 8251, Rev. Codes 1921; Gallatin County v. Beattie, 3 Mont. 173; Wilson v. Pickering, 28 Mont. 435, 72 P. 821; Davidson v. Wampler, 29 Mont. 61, 74 P. 82; Cornish v. Woolverton, 32 Mont. 456, 81 P. 4, 108 Am. St. Rep. 598; Morrison v. Farmers' & Traders' State Bank, 70 Mont. 146, 225 P. 123), and whenever our Legislature has referred to a "lien" upon either real estate or personal property, that reference must be construed to include a mortgage, unless the contrary intention is expressed.
Section 8233, above, declares that "the existence of a lien, as security for the performance of an obligation, does not affect the right of the creditor to enforce the obligation without regard to the lien," and, to make it certain that this provision includes a mortgage lien, the...
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