Roosevelt Hotel Corp. v. Williams

• Decision Date: 07 February 1933
• Docket Number: No. 22166.,22166.
• Parties: ROOSEVELT HOTEL CORPORATION, A CORPORATION, APPELLANT, v. DR. J.H. WILLIAMS, RESPONDENT.
• Court: Missouri Court of Appeals

56 S.W.2d 801

ROOSEVELT HOTEL CORPORATION, A CORPORATION, APPELLANT, v. DR. J.H. WILLIAMS, RESPONDENT.

No. 22166.

St. Louis Court of Appeals. Missouri.

Opinion filed February 7, 1933.

Appeal from the St. Louis Circuit Court, Division No. 1. — Hon. H.A. Hamilton, Judge.

AFFIRMED.

Louis J. Portner and S. Mayner Wallace for appellant.

(1) It is provided by statute that the alienee of an estate or rent shall have the right to the thereafter accruing rents. Sec. 2602, R.S. 1929. Our statutes also dispense with a need of an attornment to a purchaser at a foreclosure sale, thereby making the purchaser stand in the shoes of the original lessor. Secs. 2586, 2628. (2) The appellant was the alienee of an estate and of rents and profits within the purview of Section 2602 of the statutes, having purchased at a foreclosure sale the reversion of the original lessor and the rights of the mortgagee to the rents under the assignment contained in the mortgage. Culverhouse v. Worts, 32 Mo. App. 419; Metropolitan Life Insurance Co. v. Childs, 230 N.Y. 285, 130 N.E. 295; Hardy v. Atkinson, 136 Mo. App. 595, 118 S.W. 516. (3) These statutes are similar to those in the New York Real Property Code, and the courts of that state have interpreted them in accordance with our contentions. Kelley v. Osborn, 157 N.Y. Supp. 1100; Jacob Reich, Inc., v. Fordon, 254 N.Y. Supp. 453; Metropolitan Life Insurance Company v. Childs Co., 230 N.Y. 285, 130 N.E. 295. (4) These statutes were not considered in the case of McFarland v. Gerardi Hotel Company, 202 Mo. 597, relied upon by the other side as a precedent.

Theodore Rassieur, George M. Rassieur and Alfred C. Wilson for respondent.

(1) A sale by a trustee under a deed of trust, which antedates a lease, by operation of law terminates and extinguishes the existing tenancy as to all parties. McFarland R.E. Co. v. Joseph Gerardi Hotel Co., 202 Mo. 597, 100 S.W. 577; Barclay v. Pickles, 38 Mo. 143; Oakes v. Aldridge, 46 Mo. App. 11; Culverhouse v. Worts, 32 Mo. App. 419; McGill v. Brown, 215 Mo. App. 402, 256 S.W. 510; Hunter v. Henry (Mo. App.), 181 S.W. 597; Western Union Teleg. Co. v. Ann Arbor Ry. Co. (6 C.C.A.), 90 Fed. 379; Tiffany Landlord & Tenant, sec. 73 (4), p. 413; Id., sec. 19 (c), pp. 179, 180; Sec. 3075, R.S. 1929. (2) Attornment by the lessee of a mortgagor to a purchaser at a trustee's sale under a deed of trust prior to the lease does not revive the lease, but creates a new tenancy, which, in the absence of a writing signed by the parties, is a tenancy from month to month under the provisions of Section 2584, Revised Statutes 1929. McFarland v. Joseph Gerardi Hotel Co., 202 Mo. 597, 100 S.W. 577; Sec. 2584, R.S. 1929. (3) Sections 2602, 2586 and 2628, Revised Statutes 1929, refer to alienees or assignees of the lessor's reversion and have no application whatever to junior leases extinguished by a trustee's sale under a prior deed of trust. McFarland v. Joseph Gerardi Hotel Co., 202 Mo. 597, 100 S.W. 577; Norman v. Key (Mo. App.), 222 S.W. 499. (4) It is the established rule in this State that the mortgage conveys no estate whatever in the land but merely creates a lien thereon to secure a debt. Missouri Real Estate & Land Co. v. Gibson, 282 Mo. 75, 220 S.W. 675.

SUTTON, C.

This is an action for three months' rent of office rooms in the Roosevelt Hotel Building, located at the Northwest corner of Delmar Boulevard and Euclid Avenue, in the City of St. Louis.

The court below sustained a demurrer to plaintiff's petition, and gave judgment for defendant. Plaintiff appeals.

The petition alleges that on April 1, 1926, the Delmar-Euclid Building Corporation, then being the owner of the Roosevelt Hotel Building, executed its mortgage, with a power of sale annexed, whereunder said building was given to secure a certain bond issue in said mortgage described, and in which mortgage the said owner pledged and assigned all rents thereunder accruing, for and on account of said building, to further secure said bonds.

That thereafter, on July 9, 1930, defaults having been made under Building Corporation entered into a written lease with the defendant as lessee for the rental of office rooms in said building, for a term of five years, beginning on March 1, 1927, and ending on February 29, 1932.

That under the terms of said lease defendant agreed to pay as rent for said rooms the sum of $6,000, payable in equal monthly installments of $100 each.

That thereafer, on July 9, 1930, defaults having been made under said mortgage, said Roosevelt Hotel Building was, pursuant to the power of sale in said mortgage given, sold and by deed conveyed to plaintiff.

That after plaintiff acquired title to said building, at said foreclosure sale, plaintiff elected to continue as lessor under the terms of said lease entered into between said Delmar-Euclid Building Corporation and defendant, and notified defendant of its intention to continue said relationship, and that defendant paid plaintiff rent in accordance with the terms of said lease for the months of August and September, 1930.

And that there is now due and owing from defendant installments of rent for October, November, and December, 1930.

Plaintiff's theory here, as in the court below is that a purchaser at a foreclosure sale under a mortgage has a right to either evict a tenant holding under a lease made subsequent to the making of the mortgage, or to continue the tenancy, as he may elect. It is on this theory that plaintiff bases its right of recovery and upholds the sufficiency of its petition. And so plaintiff says that, having elected to continue defendant's tenancy under the lease, it is entitled to have the rents thereunder for the remainder of the term.

It is the well-settled rule in this State and elsewhere that the foreclosure of leased premises, under a mortgage antedating the lease, nullifies and extinguishes the lease, and where, as here, the lease is of a building in a city, an attornment by the lessee to the purchaser creates a tenancy from month to month by operation of the provisions of Section 2584, Revised Statutes 1929. No contract of lease which the mortgagor may make with respect to the mortgaged premises either inures to the benefit of the mortgagee or is binding on him. There is no privity of either estate or contract between the mortgagee and the lessee of the mortgagor to bind either, and the foreclosure of the mortgage avoids the lease and releases the lessee from any obligation. The tenancy created by attornment between the mortgagor's lessee and the purchaser under the foreclosure is an entirely new tenancy, and not a continuation of the old tenancy with the substitution of a new landlord. Whenever the estate which the lessor had at the time of making the lease is defeated or determined, the lease is extinguished with it. [McFarland v. Gerardi Hotel Co., 202 Mo. 597, 100 S.W. 577; Barclay v. Picker, 38 Mo. 143; Oakes v. Aldridge, 46 Mo. App. 11; Hunter v. Henry (Mo. App.), 181 S.W. 597; McGill v. Brown, 215 Mo. App. 402, 256 S.W. 510; Western Union Telegraph Co. v. Ann Arbor Ry. Co., 90 Fed. 379.]

But plaintiff says that this rule has been changed by Sections 2602, 2586 and 2628, Revised Statutes 1929.

Section 2602, which is chiefly relied on by plaintiff, reads as follows:

"If the owner or holder alien or assign his estate or term, or the rent thereafter to fall due thereon, his alienee or assignee may recover such rent."

It is obvious that this section refers to an alienee or assignee of the lessor's reversion, and has no application...