Seeburger v. Cohen
| Decision Date | 14 March 1933 |
| Docket Number | No. 41774.,41774. |
| Citation | 247 N.W. 292,215 Iowa 1088 |
| Parties | SEEBURGER v. COHEN ET AL. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Polk County; Frank S. Shankland, Judge.
This is an action by the plaintiff to recover from the defendants rent and taxes under the terms of a written lease. There was a trial to the court, the jury being waived, resulting in a judgment for the plaintiff for all the amount claimed by him, except rent for the month of March, 1932. The defendants Ben F. Cohen and Sol Panor appeal from the judgment entered against them. On cross-appeal, the plaintiff asks to have judgment for the rent alleged to have been due it for the month of March, 1932.
Affirmed on plaintiff's appeal; reversed on the appeal of the defendants Ben F. Cohen and Sol Panor.Parrish, Cohen, Guthrie & Watters and Stuart S. Ball, all of Des Moines, for appellants Ben F. Cohen and Sol Panor.
Rippey & Seeburger, of Des Moines, for appellee.
Raimund Seeburger and wife, on October 25, 1910, in writing leased to Isaac H. Ruben certain real estate in Des Moines for a term of fifty years. This lease provided for rentals at the rate of $625 per month, payable by the lessee, his heirs and assigns, on the 1st day of each month during the term of the lease. Also the lease further provided that the lessee, his heirs and assigns, should pay, on behalf of the lessor, all of the taxes, public rates, and special assessments of every kind and nature assessed, levied, or charged upon or against the property or the improvements thereon during the term of the lease. Furthermore,the lease granted the lessee the right to sublet or underlet and to sell and assign the lease, according to the terms thereof.
Ruben, the lessee, occupied the premises under the lease until July 27, 1913. There was a three-story building with basement on the leased premises. On July 27, 1913, last named, Ruben assigned the lease in writing to the defendants-appellants, Ben F. Cohen and Sol Panor. These assignees took possession of the premises and paid rent to the lessor, according to the terms of the lease, until October 22, 1913, when they reassigned the lease to the Cohen-Panor Investment Company, a corporation. When obtaining the lease by assignment, the corporation entered the premises and occupied the same until July 1, 1928, at which time it reassigned the lease to the Panor Realty Company, also a corporation. The last-named corporation was in occupation of the premises at the time of default in the payment of the rent which gave rise to the present action. Apparently there were other partial assignments of, or subletting of, the lease. However, under the record these last-named transactions are not material.
It seems that neither the lessee nor the assignees paid to the lessor the balance of the rent accruing under the lease after the assignment thereof by the appellants, and, on March, 15, 1932, the lessor demanded the key to the premises. Proceedings were taken to terminate the lease, the key for the building was surrendered to the lessor, and finally, on November 28, 1932, the present action was commenced to recover the unpaid rents, taxes, and assessments due and payable under the lease before the termination thereof, but accruing after the assignment thereof by appellants.
Raimund Seeburger, the lessor, died, and Albert H. Seeburger was duly appointed trustee by the district court of Polk county. Consequently Albert H. Seeburger, as such trustee, commenced the action for the rent against Ben F. Cohen and Sol Panor, the defendants-appellants, and Cohen-Panor Investment Company, Panor Realty Company, Mason's, Incorporated, and Stewart's, Incorporated, defendants. Judgment was entered against the appellants, Ben F. Cohen and Sol Panor, as well as against the other defendants, for rents unpaid and taxes and assessments due. Accordingly the appellants, Cohen and Panor, appeal. They ask a reversal of the judgment of the district court on the theory that they were merely assignees of the lease who reassigned the same and thereby terminated any liability for rents and taxes under the lease accruing after the reassignment.
On the other hand, it is claimed by the appellee that these appellants accepted a written assignment of the lease, entered into possession of the premises thereunder, and therefore are liable for the rents and taxes accruing after the reassignment. This is especially true, the appellee declares, because the lease provides that the rent and taxes shall be paid by the lessee and his assigns. Such, in a general way, is a statement of the facts involved.
I. It is argued by the appellants that they were only liable for the rent due under the lease assigned to them during the time they occupied the premises before the reassignment. That liability arose, the appellants declare, because of the privity of estate between the lessor and the assignee, but not because of privity of contract.
[1] Replying to that contention, the appellee maintains that the liability of the appellants under the assignment of the lease to them for the rents and taxes in question arose because of privity of contract. There is a long line of cases, commencing at an early period in the history of the common-law jurisprudence and extending to the present day, holding that the liability of an assignee under a lease, unless the obligations of the lease are expressly assumed, arise under the doctrine of privity of estate. To illustrate, the following is the text preceding annotations in 36 A. L. R. on page 316: “It is established by an unbroken line of authority that where a lease containing an express covenant to pay rent has been assigned, the fact that the lessor thereafter accepts rent from the assignee does not release the lessee from his liability for rent during the remainder of the term, the assignment terminating the privity of estate between the lessor and the lessee, but not the privity of contract.” This text in the American Law Report named is followed by a long list of cases from the courts of the various states sustaining it.
Likewise it is said in 52 L. R. A. (N. S.) reading on page 980: “Since a valid assignment by the lessee, and an acceptance of the leasehold by the assignee, creates privity of estate between the latter and the lessor, the assignee becomes liable to the lessor for rent so long as such privity continues.” That text is supported by a long list of cases which may be found in the Lawyers' Report named. For other authority upon this proposition, see 16 R. C. L. 864, § 367; 35 Corpus Juris, 996; Dassori v. Zarek, 71 App. Div. 538, 75 N. Y. S. 841;Consolidated Coal Co. v. Peers, 166 Ill. 361, 46 N. E. 1105, 38 L. R. A. 624;Meyer et al. v. Alliance Investment Company, 84 N. J. Law, 450, 87 A. 476;Linke v. Greenfield, 104 N. J. Law, 320, 140 A. 314;Donaldson v. Strong, 195 Mass. 429, 81 N. E. 267;Hartman v. Thompson, 104 Md. 389, 65 A. 117, 118 Am. St. Rep. 422, 10 Ann. Cas. 92;Washington Natural Gas Company v. Johnson et al., 123 Pa. 576, 16 A. 799, 10 Am. St. Rep. 553;Mann v. Ferdinand Munch Brewery, 225 N. Y. 189, 121 N. E. 746;Frank v. New York, Lake Erie & W. R. Co. et al., 122 N. Y. 197, 25 N. E. 332. The general rule is referred to in the following Iowa cases: Pickler v. Mershon, 212 Iowa, 447, 236 N. W. 382;Kennedy Brothers v. Iowa State Insurance Co., 119 Iowa, 29, 91 N. W. 831. In the Pickler Case, on page 452 of 212 Iowa, 236 N. W. 382, many authorities are cited in support of the rule.
[2][3] Regardless of that general rule, however, the appellee contends that another doctrine was inaugurated by this court in Central State Bank v. Herrick (Iowa) 240 N. W. 242. In the Central State Bank Case the only rent involved was that accruing during the occupancy of the assignee. Therefore that decision is not authority for the proposition involved in the case at bar. The discharge of the lessee's obligation to pay rent and perform covenants of the lease, and the assumption of such covenants by an assignee, cannot be inferred merely from the lessor's knowledge of an assignment of the lease by the lessee and the acceptance of rent from the assignee. Before the lessee will be discharged under such circumstances, and the assignee held liable for such obligation, the lessor must expressly or by implication accept the assignee in lieu of the lessee, and the assignee must expressly or by implication assume the lease and the obligations therein contained. Barhydt v. Burgess, 46 Iowa, 476;Harris v. Heackman, 62 Iowa, 411, 17 N. W. 592;Brayton v. Boomer, 131 Iowa, 28, 107 N. W. 1099.
[4][5][6][7] “It may further be said that the mere fact that the landlord consents to the assignment or thereafter receives rent from the assignee will not of itself discharge the original lessee from such liability,” and bind the assignee therefor. Keeley v. Beenblossom, 183 Iowa, 861, local citation, 864, 167 N. W. 638. On the other hand, however, Keeley v. Beenblossom (183 Iowa, 861,...
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