Gholson v. Savin
| Decision Date | 29 January 1941 |
| Docket Number | 28098. |
| Citation | 31 N.E.2d 858,137 Ohio St. 551 |
| Parties | GHOLSON v. SAVIN et al. |
| Court | Ohio Supreme Court |
Syllabus by the Court.
1. The express contract of a lessee fixes his liability to the lessor for the payment of rent for the whole term; but in case of assignment of the lease by the lessee, the liability of the assignee to the lessor for rent is limited to that accruing during the continuance of the assignee's interest; and the lessor may, at his election, sue either the lessee or the assignee, or both, for the nonpayment of rent accruing after assignment, but is entitled to but one satisfaction.
2. Where, upon the assignment by the lessee of a lease on real property, such lessee is not discharged from his obligations under such lease, the assignee assumes the position of principal obligor for the performance of the covenants of the lease, and the lessee becomes his surety for such performance.
3. One who sustains the relation of surety on a debt may assert his rights as such, even after judgment has been entered against him upon such debt.
4. Where in an obligation the relationship of principal and surety exists as in this case, Sections 8079, 8081, 8082, and 8084, General Code, do not preclude the discharge of the surety where the common creditor makes settlement with and discharges the principal debtor from their common obligation.
5. Where, upon default or breach of the terms of the lease by the lessee and assignee, the lessor sues them separately for the same breach and obtains judgment against each for the same amount and subsequently makes an outright and final settlement with the assignee for a part of his claim and discharges his judgment against the assignee, even though in form he reserves in such settlement his rights and judgment against the lessee, such settlement with and discharge of the assignee will operate as a discharge of the lessee, and the lessor may not thereafter pursue the lessee for the balance of his claim.
6. While an executory agreement on the part of a creditor to accept in payment and full satisfaction of a liquidated claim a sum less than the amount of such claim, without any additional consideration to support such agreement, is ordinarily not enforcible at law, yet if such agreement has been executed and settlement made accordingly or has been made with some benefit or advantage to the creditor, however slight, it will operate as a full discharge of the debt in accordance with the intention of the parties.
Appeal from Court of Appeals, Hamilton County.
In 1922 plaintiff Gholson, appellee herein, being the owner of certain real estate in the city of Cincinnati, executed a written lease therefor to defendant Savin, appellant herein for a period of ten years. In 1927 Savin assigned his rights under such lease to one Garber, who assumed the covenants to pay rent and not to commit waste. Gholson did not release Savin from the obligations of the lease.
After the expiration of the lease, Gholson sued Savin, the original lessee, in cause No. A-35993 in the Common Pleas Court of Hamilton county and on March 13, 1935, recovered a judgment against him in the sum of $2,844.75 for breaches of covenants to pay rent and not to commit waste.
On June 5, 1936, a separate and like judgment was taken by Gholson against Garber, the assignee of the lease, on the same claims in cause No. A-36512 in the Common Pleas Court of Hamilton county.
On January 30, 1937, Gholson entered into a contract with Garber providing that when he, Garber, had paid Gholson the sum of $2,000, the latter would ' satisfy his said judgment against Garber rendered in cause No. A-36512', but he 'was not to release any legal right of said Gholson to enforce his said judgment against said defendant Sam Savin.' (Italics ours.)
When Garber paid the $2,000 on November 5, 1938, Gholson gave a receipt acknowledging (Italics ours.)
There was also filed in the action against Garber (cause No. A-36512), an entry of satisfaction reciting that Garber, having paid $2,000 under an 'agreement with plaintiff to receive said sum in satisfaction of the judgment rendered against him herein, the receipt of said sum not to release any legal right of plaintiff to enforce his judgment against Samuel Savin in cause No. A-35993 * * *.
'It is now ordered * * * that the within judgment be satisfied of record upon payment by the defendant of all costs herein.' (Italics ours.)
Savin having been devised a life estate in certain real property, Gholson instituted the present proceedings in the Hamilton county Common Pleas Court to have his judgment lien declared the first and best lien on the life interest of Savin, to have the life interest of Savin sold, and to have a receiver appointed in order to rent the premises and make them productive until the remainder of plaintiff's judgment lien was satisfied. Savin in his answer to Gholson's present amended petition alleges the fact that Gholson had theretofore recovered a judgment against Garber in cause No. A-36512 on the same subjects of action that were involved in cause No. A-35993 wherein Gholson was plaintiff and he, Savin, was defendant, the judgment in the latter action being the basis of the present action; that a judgment was entered against Garber on the same subjects of action as those upon which the judgment was entered against the defendant Savin in this action; and that thereafter a satisfaction was entered in cause No. A-36512 by the plaintiff Gholson. The defendant Savin then alleges that by reason of such satisfaction of judgment against Garber, the judgment against him, Savin, in cause No. A-35993 has been satisfied and discharged. This case was submitted below upon the pleadings and a stipulation of facts, and judgment was rendered against Savin. An appeal from this judgment to the Court of Appeals resulted in an affirmance. Both the Common Pleas Court and the Court of Appeals entertained the view that Section 8084, General Code, applied and precluded the satisfaction of the judgment against Garber from operating as a discharge of the separate judgment against Savin, and that Gholson might recover the balance of his claim from Savin in the present action.
The case is now here on its merits because of the allowance of a motion to certify the record.
Pogue, Hoffheimer & Pogue, J. A. Culbertson, and Harry M. Hoffheimer, all of Cincinnati, for appellant.
Simeon M. Johnson, Frederic W. Johnson, and George H. Johnson, all of Cincinnati, for appellee.
The question for decision is whether Gholson's release of Garber, under the circumstances of this case, operated to discharge Savin as well.
The express contract of a lessee fixes his liability to the lessor for the payment of rent for the whole term; but in case of assignment of the lease by the lessee the liability of the assignee to the lessor is limited to the rent accruing during the continuance of the assignee's interest; and the lessor may, at his election, sue either the lessee or the assignee, or both, for the nonpayment of rental accruing after assignment, but is entitled to but one satisfaction. Sutliff v. Atwood, 15 Ohio St. 186, 194; Taylor v. De Bus, 31 Ohio St. 468, 470, 471; Smith v. Harrison, 42 Ohio St. 180, 185; 36 Corpus Juris, 373, Section 1227; 16 Ruling Case Law, 851, Section 352.
In this case, Gholson elected to sue both Garber and Savin separately, securing a judgment against each for a similar amount. These bare judgments were but security for the original cause of action (Wright v. Lathrop, 2 Ohio 33, 52, 15 Am.Dec. 529, 531), and while Gholson could not collect both, he was entitled to collect from one or the other, or from both of his debtors together, the full amount of the debt, unless he released Savin by discharging Garber through his settlement with the latter.
At common law, when a creditor of condebtors, jointly indebted in the same manner or in the same relationship, makes settlement with one of them, he thereby releases the other joint debtors from the obligation. The reason for this rule is that such a settlement destroys the equitable right of contribution between such joint debtors.
However, by reason of Sections 8079, 8081, 8082 and 8084, General Code, a settlement by a creditor with one of his joint debtors does not now release the other joint debtors from the obligation. It will be noted that the statutes protect such other codebtors from being required to pay any part of the proportionate share of the codebtor who has settled with his creditor. In other words, if a creditor settles with one joint debtor, even though such settlement should be for less than the latter's proportionate share of the obligation, his full share of such obligation is credited as a payment on the common debt so far as his codebtors are concerned, and the loss incident to such settlement, if any, falls upon the creditor and not upon the other codebtors. Section 8082, General Code. If, on the other hand, one or more of the codebtors of the debtor who has made settlement with his creditor are obliged to pay their common creditor more than his or their proportionate share of the common obligation remaining unpaid, he or they still have the right to call upon the codebtor, who has settled, for equitable contribution as to such overpayment. Section 8083, General Code; 9 Ohio Jurisprudence, 688, Section 16. Consequently, the other joint debtors are not released from their obligation because of a settlement between the creditor and one of their number,...
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