Case ID: ohio-st_63/html/0001-01.html
Source: Caselaw Access Project
Author: {"author": "Davis, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Crowe v. Riley.
    
      Lease is assignable, when — Covenant in lease with restriction as to sale of liquor on premises runs with land — Breach by sub-tenant of assignee- worhs breach as between assignee and original lessor — Record of sale of property, competent evidence, when.
    
    1. A lease to a person and his heirs, executors and administrators, and containing no restriction against assignment thereof, is assignable.
    2. A covenant in a lease that if liquor shall be sold on the demised premises, the business shall be conducted strictly according to law, is a covenant running with the land; and a breach of this covenant by a sub-tenant of an assignee of the lease, is as between the assignee and the original lessor, a breach by the assignee.
    
      3. Upon the trial of an action by the lessor against the assignee, for a breach of such covenant, in which the plaintiff alleged a breach of such covenant by the assignee, through his subtenant, and that in an action founded thereon, for the sale of the demised premises to satisfy a judgment for the sale of liquors contrary to law, the assignee being a party thereto, and being served with summons, and not answering therein, the said premises were so sold, the record of the action in. which such sale was made is competent evidence.
    (Decided May 22, 1900.)
    Error to the Circuit Court of Trumbull county.
    In the court of common pleas the jury was instructed to render a verdict for the defendant which was done, and this, with tbe refusal of the court to admit record evidence offered by the plaintiff, was alleged as error in the circuit court. The circuit court reversed the judgment of the common pleas for those errors. The facts are sufficiently stated in the opinion.
    
      E. B. Taylor; T. E. Gillmer and W. E. Smiley, for plaintiff in error.
    The judgment against Walsh was a lien on Walsh’s real estate if he had any, but not on Riley’s. Bellinger v. Griffith et al., 23 Ohio St., 619. But by statute the premises on which the class of wrongs under consideration is done, are liable to be subjected to any judgment recovered on account of the wrong, and this action of Whittaker v. Riley et al., was brought solely to fix this liability, and incidentally to adjust the priority of liens.
    This liability does not depend upon the knowledge ' of the owner of the premises that intoxicating liquors are sold by the lessee in violation of law, or upon the owner’s knowledge that such liquors are sold. Mullen v. Peck et al., 49 Ohio St., 447.
    
      How then does the record of Whittaker v. Riley et al., become competent evidence against Crowe in the suit of Riley against him. If admitted it would furnish proof that Crowe had no lien on said premises, no interest in them; that a judgment existed in favor of Whittaker v. Walsh which was charged upon Mary Riley’s land, and that said land was sold by the sheriff to satisfy the judgment.
    All this, however, was admitted by the answer of plaintiff in error.
    There was then no error in refusing to receive that record, even though it might have been competent for certain limited purposes, had the pleadings presented different issues — that is, had the answer denied the existence of the judgment and so forth.
    It seems to us that under the evidence submitted the plaintiff had no case, and the direction given the jury by the court to return a verdict for the defendant below was entirely correct, and the court’s duty would have been the same had said rejected record been admitted. No evidence was given in support of plaintiff’s averments that Walsh sold intoxicating liquors to Whittaker, lawfully or unlawfully, or that Crowe permitted Walsh to sell in violation of law, or that Crowe knew that Walsh did so, nor in support of any essential allegation of the petition upon which this ease was tried below, if indeed there are essential allegations in it, which we most seriously doubt.
    There is at common law no such privity of estate between owner and tenant as would make the owner liable for a wrong done a third party by the tenant, or for civil obligations assumed by the tenant. The section of the statute, 4364, which is invoked by the plaintiff below is powerless in the premises. It gives no rights and creates no liabilities, beyond its terms and purpose. Aside from the innovations it expressly defines, it made no changes in existing law.
    By that section of the statute real estate may be made subject to the payment of judicially ascertained damages resulting from the unlawful sale of intoxicating liquor, whether such sale is made by owner, or by the first or subsequent lessees. It goes ño further. It makes no change in the law of evidence. In no other respect does it enlarge the effect of a judgment.
    The plaintiff in error, Crowe, was not a party to the judgment or to the action of Whittaker v. Walsh. That judgment is a finality as to Walsh, but not as to Crowe. It may have been obtained by collusion or misapprehension of facts. Crowe is entitled to his day in court, and has the right to contest any allegation of fact that does or may affect him.
    
      Charles Fillius and J. Y. Coioclery, for defendant in error.
    The plaintiff in order to establish her claim to relief must show that by some act of her tenant, Crowe, she lost her property in the manner stated in her petition. To do this, she must show that Walsh, tenant of Crowe, sold liquor unlawfully to Mrs. Whittaker’s husband, for which a judgment was recovered. It became unnecessary to offer the record of this judgment, for it was admitted. By Crowe’s acts, for his tenant’s act was his act, such consequences followed that not only was Crowe’s estate in said premises sold, but Mrs. Riley’s also. Whatever was sufficient to subject Crowe’s interest in the premises was equally sufficient to divest Mrs. Riley of her estate therein. The record of this proceeding was competent therefore to establish itself as a fact and its legal consequences, and how the premises came to be sold. 3. Cow and Hills Notes, pages 817, 821.
    
      Crowe was bound by the judgment in the case of Whittaker v. Walsh to the same extent that Mrs. Peck was bound by the judgment of Mrs. Mullens against George Clements. Mullen v. Peck, 49 Ohio St., 447.
    Much more then also should he be concluded as to every fact necessary to be found in order to the validity of the judgment in the case of Whittaker v. Riley et al., for he was a party to it. He it was who sold the liquor, for it was done by his tenant and. therefore the same as is done by himself. Taylor, Landlord and Tenant, Sec. 444, page 345; Canaan v. Greenwoods Turnpike Co., 1 Conn., 7; Coit v. Tracy, 8 Conn., 268; Southern Pac. Ry., Co. v. United States, 168 U. S., 1.
    If it were necessary to do so in order to sustain the* claim of the compentency of this record, appeal might be made to the well established rule that the record: of the judgment in a case where a purchaser of real' estate has been evicted therefrom by the owner of the paramount title, is always competent in a proceeding afterwards instituted by the person evicted: against his grantor upon the covenants of warranty-in the deed.
    So, too, the sureties on the bond of guardians and! administrators are concluded by their settlements and! will not be heard, in the absence of fraud and collusion, to question their correctness or to demand a rehearing of the accounts. Braiden v. Mercer, 44 Ohio St., 339.
    Scott had the right to sell and assign the lease from Mrs. Riley, though the word “assigns” was not used in the lease, there being in the lease no express prohibition against its transfer. Murray v. Harway, 56 N. Y., 3337; Sutliff v. Atwood, 15 Ohio St., 186; Esty v. Baker, 48 Me., 495; Taylor, Landlord & Tenant, Sec. 108; Cockson v. Cock, Croke, J., 125; Verplanck v. Wright, 23 Wend., 506.
    In this case, it is evident, from the manner in which the lease was drawn, its terms and its erasures, that the parties to it intended the lease might he assigned. It is a general principle applicable to all instruments that whatever may be fairly implied from the terms or language of an instrument is, in judgment of law, contained in it. Rogers v. Kneeland, 10 Wend., 219.
    The fact that this lease was assigned by Scott to Crowe in the first instance for the purpose of securing a debt, does not differentiate it from an absolute assignment; for upon default of payment of the debt, it has the same effect, possession being taken, as an absolute assignment. Engles v. McKinley, 5 Cal., 153; 12 Am. & Eng. C., 717 note.
    A lease, which does not run to the lessee and his assigns, may, nevertheless as shown above, be assigned ; and when it is, the assignee of the lessee takes it subject to perform all those covenants contained in it which run with the land. 5 Coke Rep., Vol. 3, page 24; Armstrong v. Wheeler, 9 Con., 88; Patten v. Deshon, 1 Gray 329; Stewart v. R. R. Co., 102 N. Y., 601; Taylor, Landlord & Tenant, Sec. 449; Minshall v. Oaks, 2 H. & N., 793; Masury v. Southworth, 9 Ohio St., 340; Taylor L. & T., Sec. 109; Norman v. Wells, 17 Wend., 149.
    It then becomes necessary to inquire what is a covenant running with the land, in order to ascertain what, if any, covenants in this lease do so run with the land as to bind Crowe the assignee thereof. Taylor, L. & T., Sec. 260; Williams, Real Property, 379; Tiedeman, Real Property, Sec. 190; 19 Am. & Eng. Ency. Law, 988; 2 Washburn, Real Property, 4 Ed., 286, 287; 19 Am. & Eng. Ency. Law, 974.
    
      It is obvious that the use of the word “land” in these definitions arises from the fact that it but follows the use of the same word in the thing defined. That it refers all the while, nevertheless, to the nature, character, extent, limitations and burdens upon the estate that one has in the land, is obvious from the fact that among the more usual covenants which run with the land are those against “waste,” for “quiet enjoyment,” “payment of taxes,” “renewal of lease,” “leaving possession peaceably,” “the kind of business that may be carried on on the premises,” “payment of rent,” etc. Tiedeman on Real Property, Sec. 190.
    A covenant not to do an unlawful thing may be one running with the land. Clement v. Burtis, 121 N. Y., 708.
    In the case last cited, the covenant Avas not to carry on any business which shall or may cause or become a nuisance to other OAvners of land contiguous thereto.
    The books are full of cases where covenants not to do a particular business upon the demised premises, are covenants running with the land. 1 Smith’s Leading Case, 136; Mayor of Coughton v. Patterson, 10 East, 136; Taylor L. & T., Sec. 262; 4 Am. & Eng. Ency. Law, 489 and Note; Barrow v. Richards, 8 Paige’s Ch., 351, 353; Post v. Weil, 115 N. Y., 361, Hall v. Sreom, L. R., 37 Ch. D., 74.
    A covenant by a grantee not to sell liquor on the premises extends to his assignee, though not named. In re Snyder’s License, Am. Digest 1894, pg. 1082; 11 Am. & Eng. Ency. Law, 653.
    Thus it appears that Covenant runs with the land when it concerns the estate; when it relates to its preservation; when it enters into the consideration for which the lease was made; when its violation might, as in this case, disinherit the reversioner.
    
      All of the covenants in the lease are such as ordinarily and usually run with the land and are therefore binding, as appears from the above authorities, upon the assignee of the lease, Crowe. He, himself, violated every one of these several covenants, the performance of every one of which was intended to secure the preservation of the estate and necessary to its preservation. The lease did not expressly prohibit the use of the premises for the sale of intoxicating liquors. The assignee, Crowe, had the right to use the premises for any lawful purpose and Mrs. Riley was powerless to prevent him from so using them, and among these lawful uses was that of their use for the sale of intoxicating liquors thereon. Goodall v. Gerke Brewing Co., 56 Ohio St., 257. Weitzel v. Slavin et al., 7 C. D., 155.
    Again, the particular use to which Crowe put these premises by which they were sold and lost as stated* was waste. There is a particular covenant against waste in this lease; but if it should be said that the words used in the lease do not amount to an express covenant against waste, then we contend that every lease, if there is no express covenant in it against waste, contains such a covenant by implication. U. S. v. Bostwick, 94 U. S. 53.
    And “There is no difference between express and implied covenants with respect to their running with the land.” Taylor, L. & T., 26.1, page 201; Rapalge Law Diet. Title, “Waste.”
    Again it has been further defined to be “the disherison of the remainderman or reversioner.” Livingstone v. Reynolds, 26 Wend., 122.
    Disherison is defined to be “Disinheriting and depriving or putting out of an inheritance.” Burrill's Law Diet. Wade v. Malloy, 16 Hun., 229; Taylor, L. & T., Sec. 444, page 345; Cook v. Transportation Co., 1 Denio, 104.
   Davis, J.

The defendant in error made a lease for certain premises to one Scott “and his heirs, executors and administrators.” The lease contained no restriction against assignment thereof, and it was, therefore, assignable. The lessee assigned the lease to the plaintiff in error as security for a debt, with a condition that if the debt should not be paid in six months the assignment should become absolute. The debt was. not so paid and the plaintiff in error took possession of the premises under the assignment, and thereby became the tenant of the defendant in error, and as such paid to her the rent for the leased premises. The plaintiff in error sublet to one Walsh the premises described in the lease, which lease had been assigned to the plaintiff, with a condition that no liquor should be sold on the premises in violation of law. There being no privity of estate or of contract between Walsh and the original lessor, the defendant in error, the latter could maintain no action against him upon the covenants in the original lease. Her right of action, if any, was solely against the assignee, that is, the plaintiff in error. Taylor, Landlord and Tenant (8th ed.), Section 16.

The lease contained a covenant as follows: “That if liquor shall be sold therein the business shall he conducted strictly according to law, and all taxes paid.” This stipulation is an essential condition of the original contract, and the burden of it was consequently imposed upon the assignee with the estate which he acquired by the assignment of the lease. In other words, it is a covenant running with the land. Therefore, when Walsh, the subtenant of the plaintiff in error, violated this covenant, it was a violation by the plaintiff in error, as between him and the original lessor; and the latter had a good cause of action against the plaintiff in error.

On the trial of this case in the court of common pleas, every essential fact charged in the amended petition was admitted by the defendant, except the allegations that Walsh sold intoxicating liquors in violation of law to Whittaker, and “all allegations in relation to such sale in said amended petition contained” were expressly denied. It was, in substance, alleged in the amended petition that while Walsh was in possession of the demised premises, as the tenant of the plaintiff in error, he sold liquors to Whittaker in violation of law; that Whittaker’s wife obtained a judgment therefor, and afterwards brought an action in the court of common pleas, against the defendant in error as the owner of the premises where the liquors were sold, the plaintiff in error as the assignee of the lease, and certain lienholders, alleging said judgment and praying for the sale of said premises to satisfy the same; and that the same were accordingly sold under order of the court in that case. These állegations were put in issue; for they were all “allegations in relation to such sale,” and as such were denied by the answer. On the issue thus made there could be no better, nor more conclusive, evidence, than the record which was offered by the defendant in error, and which showed, among other things, that the plaintiff in error had been served with summons and had appeared in the action by an answer which was withdrawn by leave of the court, and that the case had been submitted to the court, the plaintiff in error being in default for answer. The common pleas court committed an error in rejecting this evidence, which would have completed the proof of the plaintiff’s case, and therefore erred in giving judgment for the defendant when it ouglit to have rendered judgment for the plaintiff.

It may be added that the plaintiff in error could not defend himself in this action by alleging a want of that knowledge which he was bound to have by the conditions of his title; Mullen v. Peck et al., 49 Ohio St., 447, 459; nor by alleging knowledge, by the defendant in error, of Walsh’s violation of the law. As we have said, there was no privity between Walsh and the defendant in error. She had no authority over him, could not control his acts and could only look to the plaintiff in error for indemnity. The judgment of the circuit court is

Affirmed.