Intermountain Realty Co. v. Allen

• Decision Date: 03 May 1939
• Docket Number: 6682
• Citation: 60 Idaho 228,90 P.2d 704
• Parties: INTERMOUNTAIN REALTY CO., a Corporation, Appellant, v. E. L. ALLEN and LILLIAN ALLEN, His Wife, Respondents
• Court: Idaho Supreme Court

90 P.2d 704

60 Idaho 228

INTERMOUNTAIN REALTY CO., a Corporation, Appellant, v. E. L. ALLEN and LILLIAN ALLEN, His Wife, Respondents

No. 6682

Supreme Court of Idaho

May 3, 1939

COMMUNITY REAL PROPERTY-LEASE-HUSBAND AND WIFE-NECESSITY OF WIFE'S ACKNOWLEDGMENT.

1. Under statute, a written lease of community property for a term of years is a "conveyance" and an "incumbrance" of realty, and is void unless wife joins with husband in execution and acknowledgment thereof. (I. C. A., sec. 31-913.)

2. Where husband acquired lease on restaurant rooms in hotel although lease was not signed by wife, leasehold became "community real property," within statute requiring that wife must join in execution and acknowledgment of conveyance or incumbrance of such property and an attempted modification of lease agreed to by lessor and lessee without written consent of lessee's wife was without effect. (I C. A., sec. 31-913.)

APPEAL from the District Court of the Fifth Judicial District, for Bannock County. Hon. Jay L. Downing, Judge.

Action for cancelation of lease and for recovery of possession of real property and damages for retention thereof.

Judgment for defendants. Affirmed.

Judgment affirmed with costs to respondents.

Merrill & Merrill, for Appellant.

When real estate is leased for a term of years the interest of the lessee therein, unless otherwise defined by statute, is personal property. In this case the lessee was not prohibited by section 31-913, I. C. A., from agreeing with his lessor for a change in the terms of the lease. At the expiration of the term as modified the lessee's right in the leased premises ended and a suit by the lessor to recover possession and for damages was proper.

At common law an interest created by a lease of real property for stated period of time was a "chattel real" and, as such, personal property. (Tiffany, Real Property, vol. 1, pp. 7, 8; Tiffany, Real Property, vol. 1, pp. 96-98; Tiffany, Landlord and Tenant, vol. 1, pp. 45, 46.)

Anderson, Bowen & Anderson, for Respondents.

The defendant E. L. Allen had no power to convey real estate or real property of the community without the defendant Lillian Allen joining. (I. C. A., section 31-913.)

A leasehold interest, according to the modern view, is real estate. (Tiffany, Landlord and Tenant, p. 162; Imperial Building Co. v. Chicago Open Board of Trade, 238 Ill. 100, 87 N.E. 167; People v. Shedd, 241 Ill. 155, 89 N.E. 332, at p. 335, middle left-hand column; Chicago Auditorium Assn. v. Cramer, 8 F.2d 998.)

If this were a lease by Allen and wife of community real estate, then it would be void unless the wife joined in such lease. ( Fargo v. Bennett, 35 Idaho 359, 206 P. 692.)

AILSHIE, C. J. Budge, Givens, Morgan and Holden, JJ., concur.

OPINION

AILSHIE, C. J.

--This is an action for cancelation of a written lease and agreement and for recovery of possession of the real property involved therein and for damages for the retention thereof.

Appellant Realty Company, a Montana corporation, duly licensed to do business in this state as a foreign corporation, was the owner of the Hotel Whitman Building in Pocatello, August 18, 1937, a certain lease and agreement was entered into between appellant and E. L. Allen, one of the respondents herein, by the terms of which space in the hotel building, to be used as a cafe, was "leased and let" to Allen for a term of five years, at a specified rental of 7% of the gross sales made by respondent, or a minimum rental of $ 150 per month. About November 7th Allen took possession of the restaurant property and delivered to appellant his promissory note for $ 1,716.16, with interest at 6% per annum, payable in installments and secured by a chattel mortgage. Respondent thereafter defaulted in the payments due. April 14, 1938, the parties entered into a written modification of the lease and agreement, whereby the lease should expire and terminate August 15th following. Although respondent was a married man, his wife, Lillian Allen, one of the respondents herein, did not sign or acknowledge the original lease and agreement nor the modification thereof. July 29, 1938, respondent repudiated the written modification and refused to vacate and surrender possession of the property. September 8th this action was instituted and the cause was heard before the court October 17th following. Judgment of dismissal was entered from which this appeal has been taken. The trial court held that the alteration and modification of the lease was void because of the failure of Allen's wife to sign and acknowledge the same as required by sec. 31-913, I. C. A.

Appellant states in interrogative form the propositions urged on this appeal as follows:

"1. Is the right acquired by a lessee under a lease for a term of years 'Community real estate' within the meaning of Section 31-913, I. C. A.?

"2. Is the 'Modification of Lease and Agreement' attached to Plaintiff's complaint and marked Exhibit 'B', a conveyance or an encumbrance of real estate requiring the same to be signed and acknowledged by the wife?"

Section 31-913, to which the question refers, reads as follows:

"The husband has the management and control of the community property, except the earnings of the wife for her personal services and the rents and profits of her separate estate. But he can not sell, convey or encumber the community real estate unless the wife join with him in executing and acknowledging the deed or other instrument of conveyance, by which the real estate is sold, conveyed or encumbered."

Appellant urges that "At common law the interest created by a lease for a specified period, whether for a number of weeks, months, or years, was a 'chattel real,' and, as such, personal property" and in support thereof cites a great many authorities. (1 Tiffany, Real Property, pp. 7, 8, 96-98; 1 Tiffany, Landlord and Tenant, pp. 45, 46; 3 Bouvier's Law Dictionary, p. 2816; Jeffers v. Easton, Eldridge & Co., 113 Cal. 345, 45 P. 680, 681; Guy v. Brennen, 60 Cal.App. 452, 213 P. 265; Callahan v. Martin, 3 Cal.2d 110, 43 P.2d 788, 792, 101 A. L. R. 871; O'Neill v. Wall, 103 Mont. 388, 62 P.2d 672, 674; Widick v. Phillips Petroleum Co., 173 Okla. 325, 49 P.2d 132, 104 A. L. R. 228.)

In the very outset it must be observed that the courts of this state are committed to the proposition that

"A written lease of community property for a term of years is a conveyance and an encumbrance within the provisions of C. S., sec. 4466, (31-913, I. C. A.) and is void unless the wife join with the husband in the execution and acknowledgment thereof." (Fargo v. Bennett, 35 Idaho 359, 206 P. 692.)

The Fargo case passed directly upon this question and considered the previous cases at length and analyzed the statute involved. That case has been consistently followed ever since it was announced in 1922. (McKinney v. Merritt, 35 Idaho 600, 604, 208 P. 244; Hart v. Turner, 39 Idaho 50, 56, 226 P. 282; Civils v. First National Bank of Pocatello, 41 Idaho 690, 241 P. 1023; Blaine County National Bank v. Timmerman, 42 Idaho 338, 347, 245 P. 389; Elliott v. Craig, 45 Idaho 15, 21, 260 P. 433; Burnham v. Henderson, 47 Idaho 687, 690, 278 P. 221; John Hancock Mutual Life Insurance Co. v. Girard, 57 Idaho 198, 215, 64 P.2d 254; Shepherd v. Dougan, 58 Idaho 543, 561, 76 P.2d 442.) It is the settled law of this state that a lease of real property is a conveyance or incumbrance of real estate. In the John Hancock Insurance Co. case, supra, we also held that a mortgage is a conveyance and incumbrance on real property.

Now it is contended in the present case that, while a lease of real property, in order to be binding upon the lessor, must be executed by both husband and wife (if the lessor is a married man), nevertheless, as to the lessee who receives such a lease, it is only a "chattel real" and is not "community real estate" within the purview and meaning of sec. 31-913, supra; and that the lessee, although a married man, may dispose of it without the consent of his wife.

The term "chattels real" originated under the feudal system of the common law and was intended primarily to designate any and all interests in real estate of lesser dignity than a freehold estate, and which lesser estates or interest descended under the rules for devolution of personal property and not as freehold or fee simple estates. (See 11 Am. Jur., sec. 26, p. 793.) It has been defined as "An estate in land other than one for life or inheritance." (Harvey Coal & Coke Co. v. Dillon, 59 W.Va. 605, 53 S.E. 928, 6 L. R. A., N. S., 628.) The Harvey Coal Co. case just cited contains a very interesting and learned discussion of the subject of leasehold estates, and the character or designation such estates take and the nature and extent of interest they confer. The opinion cites and quotes Coke, Blackstone and Bouvier with comment as follows:

"A 'freehold' is an estate for life or in fee; a 'chattel real' for a less estate. Volume 22 Am. & Eng. Enc. Law, 2d ed., p. 750, defines...