McLean v. Caldwell

• Decision Date: 18 May 1901
• Parties: McLEAN et al. v. CALDWELL et al.
• Court: Tennessee Supreme Court

64 S.W. 16

107 Tenn. 138

McLEAN et al. v. CALDWELL et al.

Supreme Court of Tennessee.

May 18, 1901

Appeal from chancery court, Shelby county; F. H. Heiskell Chancellor.

Suit by one McLean and others against one Caldwell and others to recover rent. From a judgment in favor of defendants plaintiffs appeal. Reversed.

Jas. M. & C. D. M. Greer, for appellants.

H. R Boyd, for appellees.

SNODGRASS C.J.

This suit is against the purchasers at a foreclosure sale of a leasehold interest of real property in Memphis. The complainants here are the original lessors. Their lessee was the Coliseum Company, which took of the complainants on the 19th of September, 1896, a written lease of the property for 10 years. The first payment of agreed yearly rental ($300) was to be made when possession was given; the next, August 1 1898; and every subsequent payment on the 1st of each succeeding August. The lessee took possession under the written lease, built upon the property, and then assigned all its interest in trust to secure a note, which it failed to pay, and the property was sold to foreclose. The defendants became the purchasers, took deed of conveyance, and entered into possession; thereby becoming assignees of the leasehold, and occupying the relation of privies in estate with the original lessor. State v. Martin, 14 Lea, 92, 52 Am. Rep. 167. They continued to occupy the premises until destroyed by fire August 10, 1898. Then they ceased to occupy or control them in any way. They did not, however, reassign the lease to the lessors or any other person; nor did the lessors take any actual possession or control of the premises. On the following 14th of September they notified the lessors they "had not had possession since August 10, 1898, and now surrender the same and all right under said lease." They did not make or tender any formal reassignment of the lease, nor did they then or thereafter make one to the lessors or any other person. The lessors refused to accept this as terminating the assignees' liability, and brought an action for rent of the term. In that suit it was held they could only recover yearly rent, and they were therefore allowed recovery to 1st August, 1898. Defendants then tendered the amount which would be due to 10th August, 1898, at which time their actual possession ceased. The lessors refused to accept it, and brought this suit for the yearly rent due August 1, 1898, for the year ensuing. The defense made was nonliability beyond the date of actual occupancy, August 10th, and that having paid up to August 1st under former decree, and tendered the amount due for this 10 days' additional rent, defendants were no further liable. They followed up the tender by bringing this amount into court with their answer. The chancellor sustained this defense, and gave judgment only for the amount tendered, dismissing the bill. The complainants appealed and assigned errors.

As a general rule, the assignee of a lease is only liable for rents while in possession, provided he reassigns the lease to the lessor or any other person; and it does not matter that such assignment is made to a beggar, a minor, a married woman, a prisoner, or an insolvent, or to one hired to take the assignment, or made expressly to rid himself of liability. Wood, Landl. & Ten. p. 557, § 349; 10 Washb. Real Prop. 451; Tibbals v. Iffland (Wash.) 39 P. 102, and authorities cited; Society v. Rix (Vt.) 17 A. 719. The reason is that such reassignment and surrender of possession terminate the privity of estate existing between him and the landlord. If the assignee to whom such second or later assignment is made takes possession, the relation of privity in estate with the assigning assignee is transferred to him, and the assignment, with surrender or transfer of possession, ends it in the acting assignee. It therefore follows that the assignee can always make his liability continue only during his possession. But it does not follow that he cannot by his own act or omission make it extend beyond actual possession. If he wishes it to extend only during possession, he must reassign his lease, as well as abandon possession. See cases before cited, and see Bonetti v. Treat (Cal.) 14 L. R. A. 151, notes (s. c. 27 P. 612). And he can only thus escape liability for subsequent, but not for previous, breaches. Wood, Landl. & Ten. p. 552, § 340. If he omit such reassignment, he continues liable. "He cannot escape liability by merely abandoning possession, however brief." Wood, Landl. & Ten. p. 552, § 339. So he may continue his liability beyond actual possession, by holding over after a yearly rental is due, before he assigns and abandons. When any rent was due while in possession, it was his duty to pay it. Failure was a breach of his covenant. In such case he is liable for that year, and, as has been also decided, as upon implied promise to pay. Society v. Rix (Vt.) 17 A. 719. That case was, briefly, this: The society leased to Mosher and Barnard for 999 years, at a yearly rental of $28.50. The covenant was to pay this rent on each 12th of March during continuance of the lease. The lessees conveyed to George Haynes, and Haynes conveyed to defendants. Defendants took possession and paid rent due to March 12, 1885. They continued in possession to June following, when they assigned and delivered possession to one Peoples. The 12th of March having passed before the assignment to Peoples, and surrender of possession to him occurred, the complainants sued defendants for the year's rent. The defense was that they had assigned to Peoples and abandoned possession in June, and that this assignment and discontinuance of possession operated as a surrender of the lease to the plaintiff. The court held that while surrender of possession, accompanied by assignment, would have that effect, yet as it had not occurred until after the year's rent fell due, on the 12th of March preceding, defendants were liable for the year's rent, notwithstanding such assignment...