Monger v. Lutterloh

• Citation: 142 S.E. 12,195 N.C. 274
• Decision Date: 07 March 1928
• Docket Number: 97.
• Parties: MONGER v. LUTTERLOH et al.
• Court: United States State Supreme Court of North Carolina

142 S.E. 12

195 N.C. 274

MONGER v. LUTTERLOH et al.

No. 97.

Supreme Court of North Carolina

March 7, 1928

Appeal from Superior Court, Lee County; Grady, Judge.

Action by J. H. Monger against R. B. Lutterloh and another, partners trading as the Lutterloh-Schuler Company. From the judgment plaintiff appeals. New trial awarded.

On wrongful abandonment of premises or refusal to enter, owner may take charge and relet or use premises to minimize loss.

Landlord should be permitted to minimize tenant's loss on abandonment, without working surrender of premises by operation of law.

Civil action by lessor to recover damages from lessee for an alleged wrongful breach of a rental contract, in words and figures as follows, to wit:

"Feb 20, 1926. The Shuler-Lutterloh Company and J. H. Monger hereby agree: That J. H. Monger is to build a garage for Shuler-Lutterloh Company at once. The rent to be $150.00 per month for a term of 2 years.

Lutterloh -Shuler Motor Co.,

Per P. K. Shuler, Pres.

J. H. Monger.

2/20/26."

There was evidence tending to show that the plaintiff, in accordance with this agreement, constructed a garage and salesroom in the town of Sanford, especially designed for showing Chrysler cars, as desired by defendants, and duly tendered same for occupancy during April, or May, 1926.

The jury found, by consent, that the defendants had wrongfully failed and refused to accept plaintiff's building and pay rent for same as agreed.

Six months thereafter, when it appeared certain that the "defendants were not going to occupy the building," plaintiff remodeled same at considerable expense and leased it to other parties.

There is no allegation of a surrender of the premises by the defendants and an acceptance of such surrender by the plaintiff; nor is there any plea of a cancellation or rescission of the contract. No evidence was offered by the defendants; and the record contains the following stipulation:

"It was agreed in open court that the damages in this case should be assessed up to the end of the contract, and defendants waived any rights that they might have because the suit was prematurely brought. November 1, 1926, was agreed upon as the date upon which the plaintiff's damages for the second remodeling of the building should be deemed to have accrued. These agreements were made for the purpose of this trial only."

The trial court held that as the plaintiff re-entered and took possession of the demised premises during the month of September, 1926, he could recover only such rent as had accrued under the contract up to that time. From the verdict rendered in accordance with this instruction, and judgment entered thereon, plaintiff appeals, assigning errors.

A. A. F. Seawell and Hoyle & Hoyle, all of Sanford, for appellant.

Dye & Clark, of Fayetteville, for appellees.

STACY C.J.

It was conceded on the hearing that the defendants had wrongfully breached the rental contract, and that damages should be assessed up to the end of the term. There is no allegation of a surrender of the demised premises by the defendants and an acceptance of such surrender by the plaintiff. Nor is there any plea of a cancellation or rescission of the lease. In this state of the record, we think the trial court erred in limiting the damages to six months' rent under the contract.

In the absence of a surrender and acceptance, an eviction, or a release, and when no stipulation controlling the matter is to be found in the agreement of the parties, ordinarily the measure of damages for the wrongful breach of a rental contract and abandonment of the demised premises, or refusal to enter, on the part of the lessee, is the difference, if any, between the rent reserved in the contract and the rent received from another letting, or the fair rental value where the lessor re-enters and uses the premises for the benefit of the lessee and on his account, without effecting a surrender or terminating the lease. Scheelky v. Koch, 119 N.C. 80, 25 S.E. 713; Everett v. Williamson, 107 N.C. 204, 12 S.E. 187; Brewington v. Loughran, 183 N.C. 558, 112 S.E. 257, 28 A. L. R. 1543; Torrans v. Stricklin, 52 N.C. 50. This, we think, is the rationale of our decisions on the subject, when viewed in their entirety, as well as of the best-considered cases elsewhere. Note, 3 A. L. R. 1080.

It is to the interest of the tenant that the premises should be occupied rather than stand idle. If the landlord relet at the same rent, the tenant is entirely relieved; if at less, he is liable only for the difference. Auer v. Penn., 99 Pa. 370, 44 Am. Rep. 114.

True, it is said in a number of cases on the subject that when the landlord reenters and resumes the beneficial use and enjoyment of the premises, or relets, as a general rule an acceptance of the surrender of the tenement is presumed, or effected by operation of law, and he thereby terminates the lease in so far as his right to recover subsequently accruing rent is concerned. Miller v. Dennis, 68 N. J. Law, 320, 53 A. 394; Hart v. Pratt, 19 Wash. 560, 53 P. 711; notes, 18 A. L. R. 957, and 3 A. L. R. 1080; 16 R. C. L. 1152. But this is not an irrebuttable presumption, and in no event would it affect the tenant's liability for rent already accrued. Schuisler v. Ames, 16 Ala. 73, 50 Am. Dec. 168. Nor will a surrender be implied against the intent of the parties, as manifested by their acts. Murrill v. Palmer, 164 N.C. 50, 80 S.E. 55; Coe v. Hobby, 72 N.Y. 141, 28 Am. Rep. 120; Smith v. Hunt, 32 R.I. 326, 79 A. 826, Ann. Cas. 1912D, 971, 35 L. R. A. (N. S.) 1132, and note. A surrender, to be effectual, must be accepted by the lessor. Auer v. Penn., supra. And where it appears, as here, that no actual acceptance of the surrender was intended or made, the tenant may still be held liable for his admitted wrongful breach of the contract. Note, 14 Ann. Cas. 1088; 16 R. C. L. 969 et seq.

Mr. McAdam in his work on the subject of landlord and tenant states the general rule as follows:

"When a tenant abandons premises, and returns the keys to the landlord, the latter may accept the keys as a surrender of possession, thereby determining the tenant's estate, and relet the premises on his own account, or he may accept the keys and resume possession conditionally by notifying the tenant or other person returning the keys that he will accept the keys but not the premises, and relet them on the tenant's account, in which case the tenant may be held for any loss in rent caused by his abandonment and the subsequent reletting." 2 McAdam, Landlord and Tenant (3d Ed.) 1283.

See, also, Hayes v. Goldman, 71 Ark. 251, 72 S.W. 563; Brown v. Cairns, 63 Kan. 584, 66 P. 639.

Ordinarily, it may be said that a contract is considered to remain in force until it is rescinded by mutual consent, or until the party claiming under it does some act, inconsistent with the duty imposed upon him by the agreement, which amounts to an abandonment of it on his part. Dula v. Cowles, 52 N.C. 293, 75 Am. Dec. 473; Hutchins v. Hodges, 98 N.C. 404, 4 S.E. 46. See, also, Willis v. Branch, 94 N.C. 142.

It ought not to be held that a landlord cannot, in any event, enter and relet or make use of the abandoned premises without effecting a surrender as a matter of law, for, in many cases, to suffer the premises to remain vacant during the term would prove more costly or injurious to the owner than to lose the entire rent; and, if the lessor is not permitted to enter and relet or use the property in any way, without effecting a surrender or terminating the lease, the tenant could thus, through a wrong, force a termination by simply abandoning the premises, or compel the landlord to elect between the lesser and greater of two losses. 16 R. C. L. 971. This would be to sanction the doctrine that might makes right.

"Because the good old rule

Sufficeth them-the simple plan,

That they should take who have the power,

And they should keep who can."

-Wordsworth.

But such, we apprehend, is not the law. Rouse v. Kinston, 188 N.C. 1, 123 S.E. 482. When a tenant wrongfully abandons the demised premises before the expiration of the time for which they are leased, or refuses to enter after executing a binding contract to do so, it is but meet that the owner should be permitted to take charge of the premises, relet or use them for the benefit of the tenant, and thus minimize his own loss and at the same time reduce the amount of the lessee's liability. Murrill v. Palmer, supra; Holton v. Andrews, 151 N.C. 340, 66 S.E. 212; Scheelky v. Koch, supra; Auer v. Hoffman, 132 Wis. 620, 112 N.W. 1090; Levy v. Burkstrom, 191 Ill.App. 478; 36 C.J. 340. See, also, valuable note, North Carolina Law Review, December, 1927, p. 68.

As to whether the landlord must notify the tenant, in order to prevent a surrender by operation of law, that the re-entry is for the benefit of the latter, to be used or relet on his account, as held in a number of jurisdictions, does not arise on the present record, because it "was agreed in open court that damages should be assessed up to the end of the contract."

When a party breaches his contract without any valid excuse, the courts are not inclined to permit him to prescribe the rights of the innocent party, but their chief concern is in making the plaintiff whole and securing to him his rights under the contract. Construction Co. v. Wright, 189 N.C. 456 127 S.E. 580. Nevertheless, it is a well-established rule in this jurisdiction that one who is injured in his person or property by the wrongful act or negligent default of another is usually required to protect himself from loss, if he can do so with reasonable exertion or at trifling expense, and ordinarily he will be allowed to recover from the delinquent party only...