Coy v. Title Guarantee & Trust Co.

• Decision Date: 08 July 1912
• Docket Number: 3,209.
• Citation: 198 F. 275
• Parties: COY v. TITLE GUARANTEE & TRUST CO. et al. (McMAHON, Intervener).
• Court: U.S. Court of Appeals — Ninth Circuit

198 F. 275

COY v. TITLE GUARANTEE & TRUST CO. et al. (McMAHON, Intervener).

No. 3,209.

United States District Court, D. Oregon.

July 8, 1912

[Copyrighted Material Omitted]

C. H Labbe and Malarkey, Seabrook & Stott, all of Portland, Or for intervener.

William C. Bristol, of Portland, Or., for receiver.

WOLVERTON District Judge.

The facts out of which this controversy arises are, in brief, as follows:

A receiver was appointed in this court for the Title Guarantee & Trust Company on November 6, 1907. R. S. Howard, Jr., succeeded to the receivership January 21, 1908, and has since been and is now the duly qualified and acting receiver of all the property and effects of such company. The receivership carried with it certain subsidiary corporations, of which the Commercial Trust Company is one. After Howard's appointment as receiver, he became the president of the Commercial Trust Company, and has since acted in that capacity. He has, however, treated the property of the company as an asset of the Title Guarantee & Trust Company, and is proceeding to administer it in his capacity as receiver. A long time previous to the receivership, to wit, on October 12, 1905, the Commercial Trust Company executed a lease to one J. F. King to certain space in the basement of the building belonging to that company for the purposes of a bathhouse, barber shop, and bootblack stand for the term of five years beginning December 1, 1905, and ending November 30, 1910, at a monthly rental of $75. The terms of the lease are, among other things, that the lessor doth lease and demise to the lessee the premises described, 'together with a reasonable supply of steam heat, at such hours as the same can be conveniently delivered from the boilers of said company without additional cost or expense or interference with operation of the other portions of said building, or of the machinery therein; and reasonable supply of gas for lighting purposes only. Also such a supply of water from the well of said lessor on said premises as can be conveniently given by said lessor, as it shall determine, and not otherwise. ' It is covenanted by the lessee:

'That he will not suffer or commit any strip or waste of said premises, nor make, or suffer to be made, any alterations or additions to or upon the same; that he will place no signs upon the exterior of said building; that he will not assign this lease without the consent of the lessor, or those having its estate in the premises, having been first obtained in writing allowing the same.'

And it is further stipulated:

'That the lessee shall have the privilege of renewing this lease for the period of five years, from the 30th day of November, 1910, upon such terms and conditions as may be agreed upon hereafter, which privilege shall be exercised by giving written notice to the lessor at least three months prior to the expiration of the term of this lease; provided, however, that no greater rental shall be demanded than is charged for like premises in the same vicinity. Provided always, and these presents are upon this condition, that the said lessor or the said lessee, or the successors or assigns of the said lessor, or the heirs, executor or assigns of the said lessee, may at any time cancel this lease on ninety days written notice of such cancellation, which said notice shall be given by the party desiring to cancel this lease to the other party thereto, and all right or interest of the said lessee to the said premises under or on account of said lease or occupation of the premises shall be determined and extinguished at the end of ninety days from such notice, it being understood and agreed that at the expiration of said period of notice the said lessee shall peaceably and quietly deliver up said premises, in all respects as hereinbefore provided, and in such case the party giving such notice and desiring to cancel this lease shall pay to the other party thereto the sum of $1,500 as liquidated damages.'

On August 28, 1906, King assigned the lease to C. H. Reynolds, to which assignment the Commercial Trust Company assented, through John E. Aitchison, its president. On December 31, 1906, the Commercial Trust Company and Reynolds, in modification of the original lease, entered into an agreement as follows:

'The lessor agrees to pump out the swimming pool located in leased premises once each week if same does not interfere with operation of building, and if requested so to do by lessee if the lessor at the time requested has sufficient water in its own well for the purpose. The lessee has to give aid and assistance required by lessor in such pumping, and to furnish steam for purpose of heating water when it can do so without interfering with operation of building. The lessor agrees to furnish steam for heating and bath purposes, and water for shower baths and tub baths only for such time on Sundays as the lessee may at lessee's expense arrange with the engineer of the building as is now being done; provided, however, that said water shall be furnished only at lessor's convenience and without additional expense to it being occasioned thereby. The rental reserved to be paid during the said term, commencing with December 1, 1906, shall be ninety ($90.00) dollars per month payable on the first day of each and every month from and after December 1, 1906.'

On the same day Reynolds assigned an undivided one-half interest in the lease to Mrs. Myrtle McMahon, the Commercial Trust Company assenting thereto through C. B. Aitchison, secretary. On June 28, 1907, Reynolds and wife assigned, by an instrument denominated a bill of sale, the remaining one-half interest in the lease to Mrs. Myrtle McMahon. This was not formally assented to by the Commercial Trust Company. Notwithstanding the want of assent, the assignee continued to pay the monthly rental of $90 as stipulated by the modification agreement, which was accepted by the Commercial Trust Company prior to the appointment of the receiver, and since by the receiver himself. On August 4, 1910, M. H. McMahon addressed a letter to 'R. S. Howard, Jr., Receiver Commercial Trust Co.,' as follows:

'Dear Sir: I desire to call your attention to the fact that the first five-year period of the 10-year lease entered into by and between your company and J. F. King on the 12th day of October, 1905, covering that portion of the basement now used as a bathhouse at 240 Washington St., and under which lease my wife is now the lessee, will expire on the 30th day of November, 1910.

'In accordance, therefore, with the provisions of said lease, and of paragraph number two on page number three therein, as manager, I hereby make application for a renewal of said lease for the remaining five years from the 30th day of November, 1910.

'I will thank you for an early reply in the premises, as I desire to know how to proceed as to future plans for improvements, etc., as per our conversation on the 2nd inst.'

On September 1, 1910, Howard wrote Mrs. McMahon:

'Dear Madam: Referring to lease dated October 12th, 1905, between the Commercial Trust Company and J. F. King to basement in Commercial Building, this city, and assignment of said lease by J. F. King to C. H. Reynolds dated August 28, 1906, and a subsequent assignment of an undivided half interest in said lease by C. H. Reynolds to you under date of December 31, 1906. The undersigned declines to renew the lease upon the ground that you have failed to observe the terms and conditions of your lease and have so operated the premises leased you that the building has been damaged, and is continually being damaged, and the undersigned will not recognize any right in you to an extension.

'Further, no notice has been given of the desire for an extension in the manner contemplated by the terms of the lease, and within the time provided.

'Yours truly,

Commercial Trust Company, 'By R. S. Howard, Jr., President.'

On the same day Mrs. McMahon served another notice on Howard to the effect that she desired and intended to exercise the privilege of renewing the lease for the period of five years.

At the expiration of the five-year term of the lease Howard, receiver of the Title Guarantee and Trust Company, caused the steam heat and water supply to the lessee to be entirely discontinued, and declined longer to recognize the lease. Whereupon Mrs. McMahon petitioned the court, by intervention in the main case of Coy v. Title Guarantee & Trust Co., praying an order and decree to the effect that the lease had been legally renewed for the term of five years, and requiring the Commercial Trust Company to perform the covenants thereof. By order of the court the petitioner was allowed to continue in the possession and use of the premises on condition that she pay to the clerk of the court the rental, to wit, $90 per month, during the pendency of the controversy. Since that time the receiver, in construing the lease and the modification thereof, has furnished steam and lights for the baths of petitioner from 8 o'clock a.m. until 8:30 p.m. during week days, but none on Sundays and holidays, as had been done previously.

Much testimony has been taken, and the matter has been continued from time to time until the present. The theory upon which the petition was interposed and the intervention sought was and is that the petitioner was entitled as a matter of legal right to have the lease renewed for a second period of five years by reason of stipulation contained in the lease providing for such renewal. The receiver controverts the theory, and urges, that, a receiver...