Petersen v. Hodges, 7583

• Decision Date: 19 December 1951
• Docket Number: No. 7583,7583
• Parties: PETERSEN, v. HODGES.
• Court: Utah Supreme Court

Page 180

239 P.2d 180

121 Utah 72

PETERSEN, v. HODGES.

No. 7583.

Supreme Court of Utah.

Dec. 19, 1951.

E. Morgan Wixom, Samuel C. Powell, Ogden, for appellant.

George M. Mason, Brigham City, for respondent.

McDONOUGH, Justice.

Plaintiff landlord, sued for an accounting and attorney's fees pursuant to the terms of a written lease covering 109 acres, known as the Penrose place. By separate cause of action, plaintiff sought to recover the sum of $2,090 allegedly advanced to the defendant as a loan. Defendant alleged by answer that the parties had mutually agreed to the termination of the written lease thus constituting a surrender thereof; that $1,850 of the sum allegedly loaned to defendant by the plaintiff was expended on plaintiff's farm, known as the Iverson place which was worked by defendant under an oral lease agreement until he was evicted by the plaintiff. By way of counterclaim defendant alleged that prior to his eviction, he performed services on the Iverson place worth $3,350 for which he was not reimbursed; that after the eviction plaintiff harvested the crops and received $8,000 therefrom, and that after crediting the sum of $1,850 advanced by plaintiff, there is a balance of $1,600 owing to the defendant as his share of producing said crops on the Iverson place. The written lease on the Penrose place was executed September 18, 1948. The term of the lease was three years. The trial court found that the parties mutually agreed to the surrender of the lease on November 5, 1949, subject to the condition that there be a division of the proceeds of the crops as the same were harvested. The plaintiff's share was found to amount to $458.90. No appeal is taken from this determination.

With respect to the second cause of action for money allegedly advanced to defendant, the court found that $1,690 of the funds were expended by defendant toward the care and production of crops on the Iverson place; and that an additional sum of $400 was advanced for purposes other than in connection with said property of plaintiff. The court further found that in consequence of a dispute between the parties in August 1949, the oral lease was rescinded and plaintiff took over the crops, harvested the same and obtained all of the benefits therefrom. The court found that at the time of the mutual rescission of the oral lease defendant had performed services on the Iverson place and that the parties did not contemplate that defendant should still owe the sum of $400, but that there was a mutual cancellation of obligations. The court ruled that plaintiff was not entitled to recover anything on his second cause of action; and also that defendant was not entitled to recover on his counterclaim, in view of rescission of the oral lease.

Plaintiff contends that he is entitled to recover attorney's fees in accordance with the covenant contained in the written lease, notwithstanding said lease was surrendered at his request nearly two years before it would otherwise have expired, and also prior to the date of filing this suit. In an action to recover rent, attorney's fees can only be awarded if there is an agreement to that effect.

In this case it is contended on the part of plaintiff that there was no intention to abrogate the obligations of the written instrument unperformed at the time of surrender of the lease and that it was agreed that the defendant would account for the balance of the crops produced that year. Both parties concede that the surrender of a lease by a lessee and acceptance of such surrender by the lessor extinguishes any liability for rent accruing on a date subsequent to the acceptance of such surrender of the unexpired term, since acceptance of such surrender of the unexpired term prior to accrual of rent operates to discharge the lessee from future obligations to pay rent. Willis v. Kronendonk, 58 Utah 592, 200 P. 1025, 18 A.L.R. 947; Tracy v. Thun, 125 Or. 323, 267 P. 398, and note in 18 A.L.R. 957. It is not disputed that the parties came to an understanding that regardless of the surrender of the balance of the term and acceptance of such surrender by return of the lease itself to plaintiff, defendant would pay the rentals which had accrued for the current year under the lease. Therefore, the obligation to pay rent, i. e. to account for the proceeds of the crops, must be treated as an accrued obligation at the time the lease was surrendered. Otherwise, the plaintiff would not be entitled to any rent whatsoever under the rule of Willis v. Kronendonk, supra.

The surrender of the lease does not operate to extinguish rights and obligations which have accrued prior thereto. If it is necessary to bring suit to enforce the obligations, which are treated by the parties as having accrued, then attorney's fees should be awarded as a necessary incident, being part of the agreement which is still in force. An agreement written into the lease providing for attorney's fees is intended to operate in case the lessee breaks off relations with the lessor and it becomes necessary to bring an action in the courts to enforce the provisions of the lease. If there are obligations which have already accrued and are due and owing to the lessor, and he is compelled to sue in order to recover such sums, then the clause providing for attorney's fees should be construed as a contractual right to collect such fees as damages arising at the same time as the obligation which is sued upon, i. e. prior to surrender. The surrender does not operate to cut off this right, when the lessor subsequently is unable to collect his share of the crop money under the provisions of the lease.

However plaintiff is not entitled to attorney's fees in this case because prior to the commencement of this action, the plaintiff went to the home of the defendant, and at that time there was no difference between the parties concerning the property which had been held under the written lease. The defendant refused to settle accounts until there was a settlement concerning the Iverson place which he farmed under the oral agreement. The plaintiff contended that the $2,090 advanced by him was a loan to the defendant. The defendant was willing to pay $458 or one-third of the sugar beet crop on the Penrose farm but contended that the alleged loan was used by him to farm the Iverson place and that he therefore was not obligated to repay this sum to the plaintiff. Therefore, it was not necessary for the plaintiff to bring suit to enforce the terms of the written lease and no attorney's fees should be allowed. The dispute over the oral lease agreement was the real contested matter and no attorney's fees can be awarded because of the fact that suit was brought joining the two separate causes of action.

Plaintiff contends that the trial court erred in denying him relief on his second cause of action, inasmuch as it is undisputed that the total sum of $2,090 was advanced to defendant. Plaintiff argues that a duty was imposed on defendant to repay those sums. However, the trial court found that except for $400, the moneys were advanced to cover costs and expenses of cultivation of crops on the Iverson place owned by plaintiff, which defendant operated under oral lease until about August 15, 1949. At the conclusion of the trial the court ruled from the bench that the oral lease had been rescinded by mutual agreement of the parties and as evidenced by their conduct, and that it would be inequitable to permit plaintiff to retain all the proceeds from the sale of the crops and also recover from defendant the sums advanced to defendant to help mature those crops. The court also ruled in substance that during the period of about 10 weeks...