Meek v. City Nat. Bank & Trust Co.
| Decision Date | 05 April 1940 |
| Citation | 30 N.E.2d 347,65 Ohio App. 349 |
| Court | Ohio Court of Appeals |
| Parties | MEEK et al. v. CITY NAT. BANK & TRUST CO. et al. |
Syllabus by the Court.
1. A claim against the estate of a lessee of a 99-year lease renewable forever, for installments of rent which become due after the death of such lessee, is not a 'debt not due' within the meaning of that phrase as used in Section 10509-124, General Code, which provides for the payment of 'debts not due,' where the lessee during his lifetime had assigned the lease with the consent of the lessors.
2. In such case there is no privity of estate between the lessors and lessee after the assignment of the lease, and the lessee's estate will not be impounded in order to secure the lessors in the future installments of rent.
Robert H. Hoffman and J. Bruce Blanchard, both of Columbus, for appellants.
Sandles Elliott & Ashbaugh, Connor & Nester, Charles A. Eberly, and Wilson & Rector, all of Columbus, Squire, Sanders & Dempsey, of Cleveland, and Forrest F. Smith, of Columbus, for appellees.
The above-entitled cause is now being determined on plaintiffs' appeal on questions of law from the judgment of the Court of Common Pleas of Franklin county, Ohio.
The following brief summary of facts will render understandable the nature of the controversy and the manner in which it arose.
On or about May 7, 1923, the present plaintiffs, together with Elizabeth L. Meek, executed a ninety-nine year lease, renewable forever, on certain described property within the city of Columbus, to Edmund P. Kelly, the consideration to be paid being the sum of $4,500 per annum during the first five years, payable in equal quarterly installments, and thereafter increasing at each subsequent five years to $5,000, $6,000, $7,000, and finally reaching $7,500 in 1938, and continuing at this rental for the remainder of the term.
The lease contained the terms, agreements, conditions, warranties and covenants usually found in ninety-nine year leases, and further provided that all such should bind all heirs, executors, administrators and assigns.
Within a week following, Edmund P. Kelly, by and with the consent of the lessors, duly assigned and transferred the ninety-nine year lease in question to the defendant, The Commerce Building & Realty Company, a corporation owned and controlled by the lessee.
On or about November 30, 1937, Edmund P. Kelly died testate, leaving an estate having the appraised value of approximately $1,000,000. At the time of his death two quarterly installments of rent were due and unpaid, and on January 1, 1938, another quarterly installment of rent became due. Proofs of claim were duly filed with the executors for these delinquent installments of rent, and thereafter all past due installments of rent were paid by the defendant, The Commerce Building & Realty Company, and thereupon the executors disallowed the claim. No other or further defaults of any kind or character have occurred.
On or about March 31, 1938, plaintiffs caused to be filed with the defendant executors a proof of claim, setting forth the existence of the ninety-nine year lease executed by Edmund P. Kelly, lessee, and put the defendants on notice that plaintiffs were looking to the estate and the assets thereof to satisfy and comply with the terms and conditions of the lease for the remainder of its term. This claim was disallowed by the defendant executors on April 27, 1938.
Thereafter, on October 15, 1938, plaintiffs filed their petition in the Common Pleas Court, praying for a declaratory judgment construing the rights and liabilities of plaintiffs and defendants under the lease and further asking that the defendant executors be held liable for all future installments of rent as the same became due and payable, and that such executors be directed to withhold distribution of the estate until adequate security was provided for the performance of the terms and conditions of the lease either by the executors or the distributees under the will, and further to declare the rights of plaintiffs to proceed against any and all ultimate distributees or beneficiaries of the estate to the extent of any assets which they receive from such estate and for such other and further relief, etc.
To the original petition a motion to make more definite and certain was interposed and sustained, following which an amended petition was filed, to which defendants filed the following demurrer:
'1. That the court has no jurisdiction of the subject of the action.
The trial court sustained the demurrer of defendants to the amended petition on both grounds and plaintiffs not desiring to plead further, a judgment was entered against plaintiffs for costs.
This is the final order from which an appeal on questions of law is now prosecuted in this court.
The assignments of error in substance question the correctness of the trial court's finding and judgment.
To grant what plaintiffs request would mean the impounding of the entire million- dollar estate after the payment of the preferred claims, since the lease is renewable forever following the expiration of some eighty-three years yet to run on the ninety-nine year period.
In addition to the quarterly payments of rent, the lease also provided as part consideration, that the lessee pay all taxes and keep the premises insured.
Counsel for the respective parties have provided us with very able and comprehensive briefs. The research of counsel has been so complete that we think it is safe to say that the subject is exhausted.
Strange to say, the Supreme Court of Ohio has never been called upon to decide the identical question raised in the instant case.
It is a matter of common knowledge, at least to lawyers and courts, that similar ninety-nine year leases are very common in Ohio, particularly in the larger cities. Most generally, leases of this character cover property of very high value. That factual situations similar to the instant case have arisen in Ohio during the many years of ninety-nine year leases is obvious.
We are referred to two cases, one before the Common Pleas Court of Cuyahoga county (unreported) and the second before the Probate Court of Franklin county (reported), both involving similar questions, and in both cases the trial court held against the lessor. These cases will be referred to more in detail later.
Counsel for the plaintiffs, in their brief, spend much time and space and cite many Ohio authorities supporting certain primary and fundamental principles relating to leases and the obligations of parties thereto under varying conditions.
Starting with these well recognized and established principles as the premise, the brief then proceeds with much logic and persuasive reasoning to state that plaintiffs should have the remedy extended so as to afford relief against lessee's estate.
Counsel, in their brief, list as their primary and fundamental principles the following, all listed under separate headings, with supporting authorities:
A. Tiffany on Landlord and Tenant, 1835, Section 294; Sutliff v. Atwood, 15 Ohio St. 186, paragraph 2 of syllabus and page 194 of opinion; Nova Cesarea Harmony Lodge v. White, 30 Ohio St. 569, 574, 27 Am.Rep. 492; Taylor v. DeBus, 31 Ohio St. 468, 471; Smith v. Harrison, 42 Ohio St. 180, 184.
B. 'The lessee continues liable for future rentals although assignment made with knowledge of lessor and rent accepted from assignee.' 24 Ohio Jurisprudence, 1031, 1032, Section 284; Taylor v. DeBus, supra; Columbus Gas & Fuel Co. v. Knox Oil & Gas Co., 91 Ohio St. 35, 109 N.E. 529; Blosser v. Enderlin, 113 Ohio St. 121, paragraph 3 of syllabus, opinion page 134, 148 N.E. 393; Spitz v. Nunn, 34 Ohio App. 397, paragraphs 1 and 2 of syllabus, pages 399 and 400 of opinion, 171 N.E. 117.
C. 'Death of lessee does not release estate from liability on express covenant to pay rent; personal representatives of distributees liable to extent of assets of estate.' Becker v. Walworth, 45 Ohio St. 169, 171, 172, 174, 12 N.E. 1; Taylor v. DeBus, supra; Rawson v. Brown, 104 Ohio St. 537, 136 N.E. 209; Broadwell v. Banks, C.C., 134 F. 470, 474; Scott v. Lunt, 21 Fed.Cas. 842, 843, 844, No. 12,540; Wade et al., Ex'rs v. March, 39 Ohio App. 111, 117, 176 N.E. 687; 35 Corpus Juris, 994, 995, Section 94; In re Miller's Estate, 173 Wis. 322, 181 N.W. 238; Israel v. Beale, 270 Mass. 61, 169 N.E. 777, 68 A.L.R. 588; Miller, Adm'x v. Ready, 59 Ind.App. 195, 108 N.E. 605; Brigham v. Kidder, 99 N.J.L. 79, 122 A. 740; Southern Pacific Co. v. Swanson, 73 Cal.App. 229, 234, 238 P. 736; Alsup, Adm'r v. Banks, 68 Miss. 664, 9 So. 895, 13 L.R.A. 598, 24 Am.St.Rep. 294.
D. 'Liability can not affect release contrary to the manifest intention of parties; contract of parties must govern and liability thereunder continues for duration of term unless otherwise specifically provided.' 3 Schouler on Wills (6 Ed.), 2370, Sections 2728 and 2729; Gusman v. Mathews, 29 Ohio App. 402, 414, 163 N.E. 636; Realty Board Investors, Inc. v. Oliver, 31 Ohio App. 105, 112, 166 N.E. 398; S. S. Kresge Co. v. Sears, 1 Cir., 87 F.2d 135, 139, 110 A.L.R. 583; Taylor v. DeBus, supra.
In none of the cases cited under headings A, B, C and D was the question involved as presented in the instant case.
In each and every instance where the question of liability for rent was raised, installments of rent were past due and unpaid.
It is a well-recognized rule that when the courts promulgate any principle of law it must be...
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