International Trust Company v. John Weeks

• Decision Date: 03 December 1906
• Docket Number: No. 31,31
• Parties: INTERNATIONAL TRUST COMPANY, Plff. in Err., v. JOHN W. WEEKS, Agent of the Shareholders of the Broadway National Bank
• Court: U.S. Supreme Court

203 U.S. 364

27 S.Ct. 69

51 L.Ed. 224

INTERNATIONAL TRUST COMPANY, Plff. in Err.,

v JOHN W. WEEKS, Agent of the Shareholders of the Broadway National Bank.

No. 31.

Argued October 17, 1906.

Decided December 3, 1906.

Messrs.

Robert M. Morse and William M. Richardson for plaintiff in error.

Messrs. G. Philip Wardner and Edward E. Blodgett for defendant in error.

Mr. Justice McKenna delivered the opinion of the court:

This is an action on contract brought in the circuit court of the United States for the district of Massachusetts, for rent alleged to be due under the terms of a lease made by Henry Parkman and others to the Broadway National Bank.

The original lessors sold the land and building leased to the International Trust Company, plaintiff in error. Defendant in error is agent of the shareholders of the Broadway National Bank.

The premises leased were the first floor of the building and the basement under the same, 'to be used as the business offices of said corporation and for no other purpose.' The lease contained a provision for re-entry upon breach of any covenant. 'And there-upon the lessors may, at their discretion, relet the premises, at the risk of the lessee, who shall remain for the residue of said term responsible for the rent herein reserved, and shall be credited with such amounts only as shall be by the lessors actually realized.'

On December 16, 1899, the bank became insolvent, and the Comptroller of the Currency appointed a receiver. On February 15, 1900, the Comptroller released the estate of the bank to defendant in error as the stockholders' agent. Between December 16, 1899, and January 5, 1900, the trust company entered upon the premises and repossessed itself of the same as of its former estate. The receiver occupied the premises for a while, but it was stipulated that such occupation was not to affect the rights of the parties. Defendant in error occupied the premises until May 19, 1900. He contended in defense of the action that upon the termination of the lease it was the duty of the trust company to use all reasonable effort to relet the premises, so as to minimize the damages, and that the company had not done so. And further, that suitable and responsible parties were willing at various times to hire the premises at a rent as great or greater than the rent reserved in the lease.

At the first trial of the case the circuit court took the opposite of defendant in error's contention, and held that, by force of the lease, the trust company did not assume any risk, and was only required to use its discretion 'with some degree of reasonableness and with some degree of justice, and have some regard to the rights of the position of the other parties concerned.' The court further held that the evidence did not show that the company had abused its discretion, and directed a verdict for it, less certain payments made by the occupant of the basement, formerly the bank's tenant. This was reversed by the circuit court of appeals. 60 C. C. A. 236, 125 Fed. 371. The latter court held that a lessor had the right to re-enter and might exercise his discretion to relet the premises at the risk of the lessee. The lessor, it was said, need not go through the form of reletting, but an honest and reasonable attempt to relet should be made, and whether so made was a question for the jury.

Upon the second trial of the case in the circuit court the trust company expressed its contentions in requests for instructions to the jury as follows: (1) That it was entitled to rent the premises and relet them at the risk of the bank; (2) that there was no obligation upon it to notify the bank of its election so to do, or to relet the premises or attempt to relet them. The court declined to...