Hop v. Cho

• Decision Date: 26 May 1920
• Docket Number: No. 1241.,1241.
• Citation: 25 Haw. 494
• Parties: C. Q. YEE HOP, ET AL., v. YOUNG SAK CHO, ET AL.
• Court: Hawaii Supreme Court

25 Haw. 494

C. Q. YEE HOP, ET AL.,

v.YOUNG SAK CHO, ET AL.

No. 1241.

Supreme Court of the Territory of Hawai‘i.

Argued April 30, 1920.

Decided May 26, 1920.

OPINION TEXT STARTS HEREAPPEAL FROM CIRCUIT JUDGE FIRST CIRCUIT. HON. J. J. BANKS, JUDGE.

(Edings, J., dissenting.)

Syllabus by the Court

Although a parol agreement to grant a lease may be void under the statute of frauds it will still be enforced in equity where there has been a substantial part performance of it though on the part of the plaintiff only if possession has been delivered and the tenant has expended money in buildings or improving the property in pursuance of the agreement.

Where the lessees holding under oral leases have paid substantial premiums for the leases enjoyed by them and have pursuant to the provisions of the leases and with the knowledge and consent of the owners expended a large amount of money in improving the demised premises equity will interfere to prevent the owners from ousting the lessees in the manner prescribed in section 2754 R. L. 1915 and to prevent them from impleading the statute of frauds to invalidate the leases under which the lessees possess the premises.

The ancient rule to the effect that a lease which puts it in the power of the lessee to terminate the lease at will is void for want of mutuality has long since been discarded and has no place in the present day analogies of the law of tenancies.

The rule is that where a party purchases or leases real estate in the possession of another not his vendor or lessor he is chargeable with knowledge of all the rights of the party in possession and the law imposes upon him the duty to make reasonable inquiry as to the rights of persons in possession and if he fail to do so he cannot be deemed to be a purchaser in good faith for value and the provisions of section 3118 R. L. 1915 will not protect him.

W. B. Lymer ( Perry & Matthewman and W. J. Robinson with him on the brief) for petitioners.

E. M. Watson ( Watson & Clemons on the brief) for respondents.

COKE, C. J., KEMP AND EDINGS, JJ.

OPINION OF THE COURT BY COKE, C. J.

This is a suit in equity instituted by the petitioners praying for an injunction to restrain the respondents from violating the terms of the leases under which petitioners claim to be occupying certain fish and vegetable stalls in what is known as the Oahu market situated at the corner of King and Kekaulike streets in the city of Honolulu. It is alleged in the bill of petitioners that Y. Anin, who was the owner of the premises, leased the same to one Young Tuck for the term of 50 years from October 1, 1902; that on June 22 and June 27, 1904, the said Young Tuck orally leased certain of the stalls in the market building to the predecessors in interest of certain of the petitioners at a fixed rate of $15 per month for fish stalls and $14 per month for vegetable stalls, the allegations of the bill in this behalf reading as follows: “That the said Young Tuck orally leased certain of the said stalls, or tables, to the petitioner Wong Pun (Pang) and to the predecessors in interest of the other petitioners at a fixed rental at the rate of $15.00 a month for a meat or fish table, and $14.00 a month for a vegetable or grocery stall, it being then agreed between the said Young Tuck and his tenants that they were to pay the rental monthly in advance, without demand; that the landlord was to pay the ground and general building taxes, but the tenants the license fees; that the tenants were not to assign nor sublet without the permission of the landlord; that the tenants were to keep the stalls and appurtenances clean, in good order and condition, and were not to make alterations; that the tenants were not to erect any buildings or structures of any kind without the consent of the landlord; that the tenants were to keep the premises in sanitary condition and were to obey and observe all rules and regulations of the board of health and of the police and the law generally; that, on nonpayment of rent when due, or on the breach of any condition or agreement on the part of the tenant to be observed or performed, then the landlord or his agents might enter the premises, forcibly, if necessary, and terminate the tenancy and remove the tenant and his effects forcibly, if necessary, without being deemed guilty of trespass and without any liability therefor; that the tenants were not to commit nor suffer any nuisance or source of filth or accumulation of garbage or refuse of any kind; that the tenants were not to use the premises for any other purpose than that of a market; and that, if the tenants, their heirs, executors, administrators and permitted assigns, observed and performed the conditions and agreements as stipulated and paid the fixed rentals, they might exercise the option, at the end of each month, of renewing the leaseholds, they having the right to repeat these renewals indefinitely.” The petition also avers that under the direction of Young Tuck the right to occupy some twenty odd stalls was sold at auction to the highest bidder for the premiums thus paid, ranging from $27 to $300 per stall, a total premium of $4384.50 being paid by the tenants at that time to Young Tuck; that certain other of the stalls were subsequently leased to petitioners or their predecessors in interest without auction but upon the same terms and conditions as those which were auctioned. It is further alleged that pursuant to the terms of the oral agreements the tenants entered into possession of said stalls and that they and their permitted assigns have held the same continuously to the present date; that in the year 1912 pursuant to the terms of the oral leases and with the knowledge and consent of the respondents the lessees expended over $11,000 in improvements in and to the market building and that the lessees have at all times paid the stipulated rentals of $15 a month for meat or fish stalls and $14 for vegetable or grocery stalls. It is further alleged that the petitioners herein are the successors or permitted assigns of the original lessees of the various stalls as hereinabove described. It is further alleged that in October, 1904, Young Tuck assigned his leasehold to the Oahu Market Company, Limited, and that thereafter up to and including May, 1919, the lessees have attorned to the company paying it the rent at the rate hereinabove specified, which payments have been accepted as correct by the company; that on July 1, 1919, the respondent the Oahu Market Company, Limited, then being the owner in fee of the premises, leased the premises to the respondents Young Sak Cho and Charles F. Chillingworth for a term of ten years from that date; that on July 31, 1919, said respondents Young Sak Cho and Chillingworth notified petitioners that the rental for the stalls occupied by them would be $30 per month each beginning September 1, 1919, and further notified them that if these increased rentals were not paid by September 1, 1919, proceedings would be instituted to oust them from the premises; that thereafter Young Sak Cho and Chillingworth did begin an action for summary possession against one of the petitioners in the district court of Honolulu and a judgment being rendered in favor of said respondents a writ of execution was issued thereon, and other attempts were being made to oust the petitioners of the possession of the stalls held by them under their respective leases. It is further alleged that the petitioners have performed all the obligations resting upon them by virtue of the terms of their leases and now offer to further observe and perform the same; that petitioners have no adequate remedy at law and all of their claims and rights arise out of the same events and transactions and depend upon the same questions of law and similar matters of fact. The bill is very lengthy and we have merely attempted to summarize the more salient features thereof.

To the bill of complaint the respondents interposed demurrers. From the decree of the court below overruling their demurrers the respondents have perfected an appeal to this court. The demurrers present a number of grounds therefor, the following of which we will discuss in this opinion: (1) That the tenancies in said alleged amended petition being by parol are by statute (Sec. 2754 R. L. 1915) determinable by a notice to quit of at least ten days; (2) that the alleged oral leasehold agreements set out and relied upon by the petitioners are within the fourth and fifth clauses of the statute of frauds (Sec. 2659 R. L. 1915) and are void for not being in writing; (3) that such alleged oral agreements are void for want of mutuality and (4) that it nowhere appears from the allegations of said amended petition that these respondents or any or either of them had actual or any notice of said alleged oral agreements of leasehold.

The first and second grounds of demurrer above outlined are closely allied and out of regard for brevity will be grouped and disposed of as one subject. The statutes referred to and which are the basis of paragraphs 1 and 2 of the demurrer above quoted read as follows:

“Sec. 2754. * * * Whenever any lessee or tenant of any lands or tenements, or any person holding under such lessee or tenant, shall hold possession of such lands or tenements without right, after the determination of such tenancy, either by efflux of time or by reason of any forfeiture, under the conditions or covenants in any such lease; or, if a tenant by parol, by a notice to quit of at least ten days, the person entitled to such premises may be restored to the possession thereof in manner hereinafter provided.”

“Sec. 2659. * * * No action shall be brought and maintained in any of the following cases: * * *

Fourth. Upon any contract for the sale of lands, tenements or hereditaments, or of any interest in or concerning them;

Fifth. Upon any agreement that is not to be performed within one year from the making thereof;

Unless the promise, contract...