Kanter v. Safran

• Citation: 68 So.2d 553
• Parties: KANTER et ux. v. SAFRAN et al.
• Decision Date: 15 September 1953
• Court: Florida Supreme Court

Page 553

68 So.2d 553

KANTER et ux. v. SAFRAN et al.

Supreme Court of Florida, Special Division B.

Sept. 15, 1953.

Rehearing Denied Dec. 17, 1953.

Kanter & Marks, Miami, and Weldon G. Starry, Tallahassee, for appellants.

Sibley & Davis, Miami Beach, for appellees.

ROBERTS, Chief Justice.

This is a lease controversy arising in the Dade County area, the factual background of which is as follows:

The appellants are the lessors and the appellees (lessees hereafter) are the assignees of a lease of certain hotel property in Miami Beach. The lease, dated March 1, 1950, was for a five-year term at a total rental price of $169,000, averaging $33,000 per year. The original lessees made a security deposit of $33,000 at the beginning of the term, in accordance with the provisions of the lease. The lessees (appellees here) went into possession of the premises under their assignment of lease on October 11, 1950. They failed to pay rental payments of $5,000 each due on March 1 and April 1, 1952; and on June 10, 1952, the lessors filed suit at law to collect this past-due rent. Thereafter, on June 30, 1952, and prior to the time that judgment was entered in the law suit, the lessees wrote to the lessors that on July 7, 1952, they would 'relinquish possession of said premises' and turn over the keys thereof to the lessors.

On July 3, 1952, the lessors wrote the lessees in acknowledgment of their letter of June 30, in the following terms: 'We herewith refuse and shall continue to refuse to accept any relinquishment or surrender by you or your agent or assigns of the premises above mentioned, and in the event your conduct necessitates our re-entering or retaking possession of the premises above mentioned, any such re-entry or retaking shall be for and on your account and we shall hold you in general damages for the difference between the rentals stipulated to be paid, and what, in good faith, we are able to recover from a re-letting.'

The parties then met at the hotel premises on July 7th, checked the inventory of the hotel furnishings, and the lessors accepted the keys to the premises.

On August 1, 1952, just three weeks later, the lessees filed the instant suit in equity for a declaration of their rights under the lease and as to the security deposit. They prayed that the court 'cancel, void, and annul said lease by reason of the relinquishment made and accepted pursuant to the terms thereof'; that the court enjoin the prosecution of the suit at law filed by the lessors for the past-due rent; and that the court 'establish that the $33,000 now held by the defendants is held for the account of the plaintiffs' and that, after deducting therefrom any rental found due by the lessees, the court enter a money decree in favor of the lessees for the balance thereof.

Their motion to dismiss having been denied, the lessors filed their answer, alleging inter alia that the security deposit under the terms of the lease constituted an agreement for liquidated damages to be retained by the lessors; they denied the allegations of the bill as to their acceptance of the lessees' surrender, and specifically denied that they had 'accepted full and complete possession and control of the premises'; they counterclaimed for certain special damages in the amount of $16,000 alleged to have been suffered by reason of the lessees' abandonment of the lease, and prayed that the court decree that the security fund be retained by lessors as liquidated damages, that 'the plaintiffs are liable to the defendants under the terms of the said lease' and that 'this court take an accounting of the sums of money due the defendants from the plaintiffs.'

The cause was heard by the Chancellor, who made no findings of fact but decreed only that 'on the main case the equities are with the plaintiffs. On the defendants' counterclaim the equities are with the counterclaimant to the extent of certain damages set out below.' He decreed that the security deposit of $33,000 be returned to the lessees, less the amount of the judgment for past-due rent, with interest, and less damages allowed to lessors in the amount of $2,735. His decree ordered the lessors to pay to the lessees forthwith the sum of $18,848. The lessors have appealed from this final decree.

The parties do not agree on the questions to be decided by this court. However, we think the key question in the case is whether there was a surrender by the lessees and an acceptance thereof by the lessors in such manner as to terminate all further liability of the lessees to the lessors under the lease. And since there appears to be some confusion as to the basic principles of law respecting a 'surrender' in lease law, we deem it wise to re-state these principles.

First, it should be noted that a 'surrender' in the sense in which we are presently discussing it, is not merely a surrender of the leasehold premises; it is a surrender of the leasehold estate. Lord Coke defines a surrender as 'a yielding up of an estate for life or years to him that hath an immediate estate in reversion or remainder, wherein the estate for life or years may drown by mutual agreement between them.' See Kottler v. New York Bargain House, 242 N.Y. 28, 150 N.E. 591; Tiffany on Landlord and Tenant (1910) Section 187.

It is also important to note the distinction between an 'express surrender' and a surrender 'by operation of law.'

An express surrender is purely contractual, and we look to the agreement to find the intent of the parties. Thomas v. Roth, Mo.App., 157 S.W.2d 250. Unless both the lessor and the lessee mutually agree, there can be no surrender by agreement of the parties. O'Neal v. Bainbridge, 94 Kan. 518, 146 P. 1165.

A surrender by operation of law is based somewhat on the principles of estoppel, in that a surrender is implied where the lessor has been a party to some act or acts incompatible with the continued existence of the relation of landlord and tenant. See Tiffany, Landlord and Tenant (1910), Sec. 190; Thomas v. Roth, supra; Christenson v. Ohrman, 159 Kan. 565, 156 P.2d 848; Continental Bank & Trust Co. of N. Y. v. Goodner, Sup., 49 N.Y.S.2d 747.

Thus, a surrender by operation of law occurs when the tenant accepts from the landlord a new lease inconsistent with the old lease, or accepts a different class of interest in the premises inconsistent with such lease. A surrender by operation of law may also result from the relinquishment of possession by the lessee and the resumption of possession by the lessor. But whether such a surrender will be implied must depend on the facts of each particular case. As stated by Tiffany in his work on Landlord and Tenant, at page 1335:

'The fact that the landlord enters and cares for the premises after the tenant's abandonment is not regarded as showing a resumption of exclusive possession, effecting a surrender, nor does the making of repairs in itself have that effect. The question is whether the possession taken by him is of an exclusive character, with the apparent intention of occupying and controlling the premises as his own, to the exclusion of the tenant, in case the latter desires to return, and this is ordinarily a question of fact.'

The authorities are not in accord on the question of whether a reletting by the landlord after the abandonment or relinquishment of the premises by the tenant will effect a surrender by operation of law. For a discussion of the various views on this question, see 32 Am.Jur., Landlord and Tenant, Sec. 519, page 423; 52 C.J.S., Landlord and Tenant, § 498, page 278.

But it is clear that a surrender by operation of law will not be implied where such was manifestly not the intent of the parties. 'When such intention cannot be presumed without doing violence to common sense, the presumption will not be supported.' Christenson v. Ohrman, supra [159 Kan. 565, 156 P.2d 851]. Thus, the parties may so contract in their lease agreement as to make the implication untenable, Continental Bank & Trust Co. of N. Y. v. Goodner, supra; Brill v. Haifetz, 158 Pa.Super., 158, 44 A.2d 311; Crow v. Kaupp, Mo.Sup., 50 S.W.2d 995, as where the lease specifically provides that the lessor may re-enter and re-let for the account of the lessee. And, clearly, there can be no presumption of an acceptance of a surrender when the lessor accepts the keys and resumes possession of the premises, qualifiedly and conditionally. Thus, as stated by Tiffany, Landlord and Tenant (1910), at page 1337: 'The fact that the landlord, at the time of obtaining or accepting control of the key, or previously thereto, states or explicitly shows that he has no intention of regarding the tenancy as terminated, or of releasing the tenant from his obligations under the lease, is sufficient of itself to prevent such result.' See also McAdam, Landlord and Tenant, 5th Ed., page 1378; Hulsey v. Harrington, 57 Ga.App. 479, 195 S.E. 901; Richman v. Joray Corp., 4 Cir., 183 F.2d 667; Hawkinson v. Johnston, 8 Cir., 122 F.2d 724, 137 A.L.R. 420.

Some mention should also be made of the lessee's liability in damages to the lessor under the circumstances which we are here discussing. Of course, the parties may mutually agree to a surrender and acceptance of the leasehold estate without further liability on the part of the lessee, in which event there can be no recovery by the lessor of damages for the loss of future rents nor for any damages other than those existing at the time of the termination of the lease agreement. And, as heretofore noted, the lessor may accept the surrender of the premises and thereafter re-enter and relet on the account of the lessee, either by virtue of a stipulation to that effect in the lease or on the basis of such a qualification or condition expressly or impliedly attached to the lessor's acceptance of the lessee's surrender of the premises. It has been held that in these circumstances, there has been no determination of the leasehold estate, that the lease term is...