Yuen Suey v. Fleshman

• Decision Date: 08 July 1913
• Parties: YUEN SUEY v. FLESHMAN.
• Court: Oregon Supreme Court

133 P. 803

65 Or. 606

YUEN SUEY v. FLESHMAN.

Supreme Court of Oregon

July 8, 1913

Department 1.

Appeal from Circuit Court, Multnomah County; Henry E. McGinn, Judge.

Action by Yuen Suey against A. Fleshman. From a judgment for plaintiff, defendant appeals. Affirmed.

This action was begun by the plaintiff against the defendant to recover $2,732.30 for money had and received. Judgment for the full amount was rendered in the court below for the plaintiff.

The facts are stated in the opinion of the court.

Bernstein & Cohen, of Portland, for appellant.

Wm Reid and Martin Watrous, both of Portland, for respondent.

RAMSEY J.

This is an action to recover $2,732.30 and interest, based on the following facts:

On the 29th day of April, 1908, the appellant and respondent entered into a contract of lease, whereby the appellant demised to the respondent a three-story brick building which he erected for the respondent on lots 1 and 4, in block 38, of Couch's addition to the city of Portland. The lease was made for a term of 20 years. The building was intended to be used by Chinese tenants. The respondent took possession of the building on May 1, 1908. He covenanted to pay a monthly rental of $775 in advance on the first day of each calendar month.

The following is a copy of the material part of said lease "All of said monthly payments to be paid in advance on the 1st day of each month, and the lessee agrees to deposit with the United States National Bank, upon the signing of this agreement, the sum of five thousand dollars ($5,000) in United States gold coin, or in approved certificates of deposit, to be held by said bank pending the completion of said building, and when said building is completed, and possession thereof is delivered to the lessee as herein provided, the said bank shall pay and deliver over said sum of money to the lessor as security for the rent hereunder and for the performance of each and every one of the obligations of the lease hereunder, and for the faithful performance of all the requirements upon the lessee under this lease during its entire term, the said sum to be credited as rent paid for the last period of occupancy under this lease, which said amount of five thousand dollars ($5,000) will cover, if all the terms hereof are properly fulfilled. And if, at any time during the term of this lease, after such deposit of five thousand dollars ($5,000), any installment of rent herein stipulated shall at any time be in arrears for the term of ten (10) days, from and after the 1st day of the calendar month for which the same shall be due, or if the lessee does or shall fail or neglect to perform or observe any or either of the covenants, conditions, or agreements herein contained, which on his part are to be kept performed, or observed, then and in either of the said cases the lessor, or his agent, or those claiming under him, may immediately, or at any time thereafter, and while such neglect or default continues, and without prejudice to any other rights or remedies available to the lessor at law, or in equity, or otherwise, notify the lessee that he, the lessor, elects to declare the covenants, conditions and agreements of the lease herein broken, and this instrument and the lease hereby granted canceled, determined, and forfeited, and thereupon said lease shall forthwith be determined and at an end, and, in that event and at any time thereafter, the lessor shall have the right to draw upon said fund to make good any arrears whatsoever of rent due hereunder, and also any and all loss, damage, injury, expense, or liability, caused by reason of any failure on the part of the lessee to perform on his part any of the conditions, covenants, and agreements herein contained. Provided, however, that in case this lease should he declared forfeited for nonpayment of rent under the conditions thereof, then the said five thousand dollars ($5,000) is to be forfeited, and become the property of the lessor."

The respondent paid the rents under said lease until April 1, 1909, but failed to pay the rents for the months of April and May, 1909. The appellant elected, under the terms of the lease, to terminate the lease for nonpayment of rent, and he at once began against the appellant and some of his tenants an action of ejectment to recover possession of said building and damages for its withholding. He recovered possession of the building and $4,050 damages and $46.30 costs.

While said action of ejectment was pending, the appellant caused a receiver to be appointed, who took possession of the building and collected the rents. The receiver turned over, after deducting $250 for his services and attorney fees, the money by him collected which was credited on the said judgment for damages, leaving unpaid thereon, after making said credit, the sum of $2,267.30. Of the $5,000 belonging to the respondent, which the appellant held as security under the terms of said lease, he applied $2,267.30 thereof in payment of the said balance due on said judgment for damages, leaving still in his hands $2,732.30 of the said deposit of $5,000. This action was brought to recover said balance of $2,732.30.

The appellant, by his answer, claims that the deposit left by the respondent with him, as security that the respondent would perform the conditions of said lease on his part, was forfeited to him and became his property, as liquidated damages for the nonperformance of the conditions of said lease by the respondent. He claims that the court should hold that said deposit should be treated as liquidated damages, and not as a penalty, for the special reason that the damages that might accrue for a breach of the conditions of said lease by the respondent were uncertain and difficult to prove, owing to the fact that the leased building was built for Chinese tenants, and not for white tenants, etc.

The appellant claims, by his answer, also, that he expended for attorney fees in sad action of ejectment the sum of $500, which he claims should be allowed him in this suit, as a counterclaim. He claims, also, $2,000 as damages, which he asserts he sustained by having to repair the building by reason of injuries to it, caused by the respondent and his tenants. This suit was tried by the court below without a jury, and its findings of fact stand as the verdict of a jury.

By the terms of the lease, the respondent, as lessee, agreed to pay in advance on the first day of each calendar month $775 as rent of said premises, and he deposited with the appellant as lessor $5,000, to secure the payment of said rent and the performance of every other covenant and condition of said lease on his part. The lease shows that the intention in making this deposit was to secure the performance of the lessee's covenants. The lease provides that if the lessee should fail, for the period of 10 days, after an installment of rent should become due, to pay it, the lessor should have the power, at his election, to declare the covenants and conditions of the lease broken, and the lease canceled, terminated, and forfeited. In case of the termination of the lease, at the election of the lessor, that instrument gave him power to "draw upon" said deposit of $5,000, to make good arrears of rent and any costs, damages, injuries, expense, or liability, caused by reason of any failure of the lessee to perform any of the conditions, covenants, and agreements contained in said lease on his part.

The lease contains this further provision: "Provided however, that in case this lease should be declared forfeited for nonpayment of rent, under the conditions thereof, then the said five thousand dollars ($5,000 is to be forfeited and become the property of the lessor." The respondent paid the rent until April 1, 1909. On that day the rent for the month of April became due, and, under the terms of the lease, on the 11th day of April the lessor had power to terminate the lease for nonpayment of rent, and, by the terms of the provision quoted, supra, the whole of the $5,000 deposited would be forfeited and become the property of the appellant. In other words, for the failure to pay $775 for 10 days after it became due, the appellant had the power, by the terms of the lease, to...