Hobbs v. Cawley.
| Decision Date | 25 May 1931 |
| Docket Number | No. 3564.,3564. |
| Citation | 35 N.M. 413,299 P. 1073 |
| Parties | HOBBSv.CAWLEY. |
| Court | New Mexico Supreme Court |
OPINION TEXT STARTS HERE
Syllabus by the Court.
Whether instrument constitutes assignment of lease or sublease depends on intention of parties.
Whether an instrument has the legal effect of an assignment or a sublease depends on intention of the parties.
Instrument may create relationship of landlord and tenant between parties to second demise, notwithstanding term is assigned as between original lessor and assignee.
Even though the instrument may in law create an assignment of the term, as between the original lessor and the assignee, it may also create the relation of landlord and tenant between the parties to the second demise.
Instrument transferring premises from lessee to third party on different terms, with right to re-enter for violation of covenants, held to create relationship of landlord and tenant.
Instrument transferring premises, although for the whole term, on new and different terms and conditions, with reservation of right of re-entry for violation of covenants, is as between the lessee and transferee a sublease, and as to them the relation of landlord and tenant subsists.
Appeal from District Court, Eddy County; Richardson, Judge.
Suit by W. L. Hobbs against H. E. Cawley. Judgment for the defendant, and the plaintiff appeals.
Reversed, and cause remanded for a new trial.
Instrument transferring premises, although for the whole term, on new and different terms and conditions, with reservation of right of re-entry for violation of covenants, is as between the lessee and transferee a sublease, and as to them the relation of landlord and tenant subsists.
Caswell S. Neal, of Carlsbad, for appellant.
Neumann & Bujac, of Carlsbad, for appellee.
Tracy leased real estate to appellee for a period of five years, and in the lease agreement, for a stated consideration of $1, gave appellee an option to purchase upon certain conditions. Appellee thereafter entered into a written contract designated “Lease Agreement” whereby he “demised and leased” to appellant the real estate involved for a period of time expiring coincident with that stipulated in the lease from Tracy to appellee. The lease agreement stipulates that appellant is to pay to appellee a monthly rental in the sum of $65 per month, which is the same amount which on its face appellee was to pay under his lease from Tracy. This lease agreement otherwise contains covenants which are stranger to the lease from Tracy to appellee. For instance, transferee Hobbs to “offer for sale from the gasoline vending station located on said premises, only products of the Magnolia Oil Company, for which company the said first party (appellee) is local wholesale dealer.” Hobbs is restrained from assigning the lease or underletting the premises without the consent of appellee. Ten days' grace was given to transferee Hobbs to pay the monthly rents. Appellee reserved the right of re-entry in case of conditions broken. Appellant Hobbs went into possession of the premises under the lease agreement. Later on, appellee assigned his option to purchase to one Moore, and, by subsequent assignments thereof, it reached and was exercised by Swigart and Marquess who later successfully maintained suit against appellant Hobbs to eject him from the premises he held under the lease from appellee. Appellant then brought this suit against appellee for damages flowing from the eviction.
The case went to trial, and when plaintiff (appellant) had introduced his evidence the defendant (appellee) moved for a directed verdict for the reason, among others, that the lease agreement between appellee and appellant, in legal effect, was an assignment of the Tracy lease and not a sublease or a lease from appellee to appellant, and “that by reason of such assignment, the plaintiff Hobbs, stands in the shoes of the appellant Cawley, insofar as any liability he may have to the original lessor, (Tracy) and stands in the shoes of the defendant, H. E. Cawley, insofar as his rights and duties were concerned, and that no relation of landlord and tenant ever existed between the plaintiff and the defendant to charge the defendant with those things which are commonly charged to a landlord by a tenant where the covenant of peaceful enjoyment is breached, and for the further reason that said instrument being an assignment by its legal effect, there is no implied covenant of quiet enjoyment, and the instrument itself, as shown upon its face, gives no express covenant of enjoyment, and for that reason, there is no damage upon the part of the defendant Cawley.” Other reasons were given, not material to the present inquiry.
The court in rendering its decision said: ...
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...v. Christian Feigenspan, 68 N.J.Eq. 671, 64 A. 801 (N.J.Eq.1905); Saling v. Flesch, 85 Mont. 106, 277 P. 612 (1929); Hobbs v. Cawley, 35 N.M. 413, 299 P. 1073 (1931); Jaber v. Miller, 219 Ark. 59, 239 S.W.2d 760 (1951). Furthermore, to construe the sublease as an assignment eradicates the p......
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