Dearborn Stove Co. v. Caples

• Decision Date: 10 January 1951
• Docket Number: No. A-2831,A-2831
• Citation: 236 S.W.2d 486,149 Tex. 563
• Parties: DEARBORN STOVE CO. v. CAPLES.
• Court: Texas Supreme Court

Page 486

236 S.W.2d 486

149 Tex. 563

DEARBORN STOVE CO. v. CAPLES.

No. A-2831.

Supreme Court of Texas.

Jan. 10, 1951.

Rehearing Denied Feb. 14, 1951.

Worsham, Worsham & Riley and W. Autry Norton, all of Dallas, for petitioner.

Lee S. Bane, R. T. Meador, W. F. Bane and M. S. Church, all of Dallas, for respondent.

GARWOOD, Justice.

Petitioner, Dearborn Stove Company, a corporation, sued, and in the trial court had judgment, after a nonjury trial, against the respondent Caples for claims arising from a 'prepaid' one year written residential lease executed on August 1, 1946 by Caples as lessor to one Teague as lessee and purportedly assigned by Teague to petitioner, along with all causes of action accruing to Teague thereunder. Petitioner's claims in brief were for (a) sums due from respondent Caples by reason of his having re-entered the premises and occupied them from about the end of October 1946 onward; (b) triple damages and attorney fees based on the rental being in excess of that permitted by applicable regulations and orders issued under the federal Emergency Price Control Act, 50 U.S.C.A.Appendix, § 901 et seq. No findings of fact of the trial judge were made or requested and no point is made in connection with their absence. On appeal by the defendant (respondent) Caples, the Court of Civil Appeals, over a dissent, reversed the judgment and denied petitioner any recovery. 231 S.W.2d 669. Petitioner here reurges the validity of both its claims as allowed by the trial court.

As to the claim based on respondent's reoccupancy of the premises, the material facts are stipulated or otherwise undisputed as follows: The premises were rented 'furnished'. The lease was expressly nonassignable without consent of respondent and for a fully prepaid consideration or 'rent', recited as $1200, but actually $1625. The lessee, Teague, was the manager of petitioner Stove Company and had leased the premises with the foreknowledge and positive encouragement of petitioner, but only a few days afterwards 'resigned' or lost his employment, so that the responsible executives of petitioner 'felt there was a moral obligation on the part of the company to see that he didn't suffer a financial loss because of it (the lease)'. Accordingly, as part of settling affairs with Teague, petitioner, on or about August 6, 1946, reimbursed him the full consideration he had paid for the lease, receiving in turn from him a brief and informal 'assignment' of 'all my rights in this lease' endorsed upon the lease document. At that time Teague declared that he was very happy to make the assignment, get the payment and 'get out from under'. A few days later an executive of petitioner advised respondent by letter of the purported assignment, suggesting that petitioner might in turn assign the lease to some third party acceptable to the respondent lessor or simply give it up to respondent upon refund by the latter of the 'unearned' part of the prepaid rental. Respondent promptly replied by letter, stating that the lease was by its terms nonassignable and prohibiting petitioner to enter or authorize others to enter upon the premises. Nothing further transpired until about two months later, when the lessee Teague being evidently still in possession, the respondent lessor called on the above-mentioned executive and in effect told him that, while not recognizing petitioner as having any right to enter, or permit entry upon, the premises, the respondent, should he find a new and satisfactory tenant, including possibly one suggested by petitioner, would pay to petitioner 'the money that was secured from them up to the amount of the lease, or the amount that we (petitioner) had paid Mr. Teague'. About two weeks thereafter Teague 'vacated' the premises, and the respondent lessor and his family forthwith reoccupied them. The record discloses no exactly contemporaneous explanatory declarations or acts of Teague or respondent bearing on the intended effect of this change of possession, but almost immediately after it occurred, respondent, in reply to an enquiry from petitioner as to the status of affairs between them, stated briefly that he had consulted his attorney and would not discuss the matter further.

Viewing the question first in a general way, while it may seem unjust under any circumstances for the landlord to retain rent paid in advance and at the same time himself enjoy free occupancy of the leased premises for most of the period which the prepayment was intended to cover, it may be less so when we consider the long established rule that rent is not 'apportionable' in the sense of allocating fractions of its amount to corresponding fractions of the period which it was agreed to cover. Thus, for example, when ownership of the reversion changes during a year, for which the rental is stipulated as payable on the last day, the new owner is entitled to the full payment, though he has owned the premises perhaps only a month. Upon the same principle, where a lease for a term of several years is made upon prepayment for the final year and the lessee obligated to pay also a sum for each intervening year, there can ordinarily be no recovery back of the advance payment, even though the lessor should accelerate the end of the lease for bankruptcy of the lessee prior to the final year, or if, for another example, the building constituting the leased premises should be destroyed by fire during an early year of the term. Porter v. Sweeney, 61 Tex. 213, 216; Hearne v. Lewis, 78 Tex. 276, 14 S.W. 572; Galbraith v. Wood, 124 Minn. 210, 144 N.W. 945, 50 L.R.A.,N.S., 1034; Schoen v. New Britain Trust Co., 111 Conn. 466, 150 A. 696; Evans v. McClure, 108 Ark. 531, 158 S.W. 487; Sinclair v. Burke, 133 Or. 115, 287 P. 686; Bacciocco v. Curtis, 12 Cal.2d 109, 82 P.2d 385, 387; C. M. Staub Shoe Co. v. Byrne, 169 Cal. 122, 145 P. 1032. See also case note to Smith v. J. Weingarten, Tex.Civ.App., 120 S.W.2d 878, 878, er. dism'd, in 17 Tex.L.Rev., 500; 1 Tiffany, Landlord and Tenant, § 179 et seq. The matter of recovering back rentals required to be prepaid under the lease but not 'earned' is accordingly quite different from that of whether an anticipatory termination of the lease does or does not relieve the lessee of liability for rentals which would otherwise come due after the termination.

Turning now to specific contentions made, we consider untenable the theory that the lessee's otherwise invalid assignment was, through estoppel or otherwise, validated by the respondent's above-memtioned statements about a new tenant, and that therefore respondent is liable in damages for wrongful ouster of petitioner itself as holder of the lease. The statements indicate at most a then intention to give petitioner the benefit of such new lease arrangement, if any, as respondent might choose to make with third persons and suggest an understanding that the lease was terminated rather than a recognition by respondent that petitioner had acquired some legal right in the premises by the 'assignment'. The verbal suggestion by petitioner's executive of a prospective new tenant, with whom respondent might negotiate, was actually an acquiescence in the position taken by respondent from the beginning, to wit, that the purported assignment from Teague conflicted with an explicit provision of the lease (as it did also with the terms of Art. 5237, Vernon's Tex.Civ.Stats.Ann.,) and failed to give petitioner the essential rights, such as that of entry on the premises, which an assignment would normally give, if it gave anything.

Petitioner also argues that, even should it not have become the owner of the lease, the latter yet remained in effect, so that the tenant, Teague, thus had a cause of action against respondent for unlawfully reentering. In this connection, the record reflects that on November 25, 1949, some two years after this suit began, Teague executed to petitioner a formal assignment of all causes of action he might have against respondent in connection with the lease. Alternatively--if inconsistently--petitioner asserts that, under the facts, the lease was surrendered by operation of law and ceased to exist at the end of the third month of the term, when Teague moved out and respondent re-entered; the effect of such a surrender, which is often held to destroy the tenant's future obligations to pay rent, being to give Teague (or his assignee) a cause of action for return of the 'unearned rentals' theretofore paid in advance. While the respondent disputes this assertion of surrender, though apparently thus concurring with petitioner's assumption that a surrender, if established, would entitle the tenant (or his assignee) to recover the 'unearned' rentals, we, for our own part, agree with petitioner that there was a surrender, but disagree with the assumption of both parties that it entails a return of the rentals or other recovery.

A surrender by operation of law may be effected through the abandonment of the premises by the tenant and re-entry by the landlord. 2 Tiffany, Landlord and Tenant, § 190 c, p. 1332 et seq., and cases collected in 51 C.J.S. Landlord and Tenant, § 125, n....