Case ID: us-ct-cl_5/html/0395-01.html
Source: Caselaw Access Project
Author: {"author": "Casey, Ch. J., \n      Nott, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HICKEY’S CASE. P. J. Hickey vs. The United States.
    
      On the Proofs.
    
    
      The defendants rent from one Fldridge four warehouses al San Francisco, at the monthly rental of $1,500 each. The lease is for ten years. It is stipulated that the $1,500 rent per month shall continue two years ; aflqr that, and for each succeeding two years, the rent is to he determined hy referees, “if tlie Secretary of ifieTreasury shall require it.” The defendants occupy the warehouses without change of rent until February, 1856, when they sub-lease them to the claimant for $500 per month, subject after the lsí May, 1856, to reassessment, as provided in the original lease, and with a provision that $250per month“is hereby saved and reserved ” to the lessee “ during the term of the afore- ' said lease, ‘asa bonus’ for leasing said -warehouse, to be paid at the expiration of each month.” There is a clause of reentry for nonpayment of rent, and a covenant by the defendants that the lessee shall quietly hold the premises without “ suit, trouble, or hinderance ” from any persons tvhomsoever. The claimant enters into possession and pays rent xvp to the 1st May, 1856, to 
      
      the collector of the port. An effort is then made to reassess the rent, hut the referees do not agree, and no umpire is chosen. The claimant remains in possession hut pays no rent. On the 13th April, 1857, Eldridge releases the defendants from further liability, and they assign to him their lease to the claimant with all rents due to them; Eldridge brings proceedings to recover possession; the claimant notifies the collector and the district attorney that the defendants may appear and defend. The district attorney appears, procures adjournments, and allows judgment of restitution to go by default. The claimant is then dispossessed. Se seelcs to recover the monthly bonus reserved from the 1st May, 1856, to the end of the term. There is also a claim for the storage of goods.
    
    Where a sub-lease from a tenant to an under-tenant provides that the sum of $250 ppr month “ is hereby saved and reserved to the said party of the second part, ‘ during the term,’ as abonusio thesaidparty ‘forleasing saidwarehouse,’ to ‘ be paid at the expiration of each month,”’ it is merely a reservation out of, and deduction from, the rent, and continues only while the lease is in force.
    
      Mr. William Lilley for tbe claimant:
    On tbe twenty-eighth day of July, A. D. 1851, Thomas Cor-win, then Secretary of tbe Treasury, entered into an agreement with James Eldridge, of tbe State of New York, stipulating for tbe payment of $6,000 per month for tbe rent of a block of buildings to be erected by tbe said Eldridge in tbe city of San Francisco, in tbe State of California. This agreement was to remain in force ten years.
    Tbe sixth article is as follows:
    
      “ Article 6. It is understood, covenanted, and agreed that tbe United States shall have tbe privilege, if tbe Secretary of tbe Treasury shall require it, at tbe end of two years from tbe commencement of tbe term, and so on from two years to two years during tbe term, to have an assessment of what shall be fair, proper, and reasonable rent for tbe said bouses for tbe then next ensuing two years, payable monthly, at the end of each and every calendar month, in San Francisco — such assessment to be made by two disinterested, impartial men of good repute, one to be chosen by tbe Secretary of tbe Treasury of tbe United States and tbe other by James Eldridge, and in case of disagreement, the said assessors so chosen to call to their aid an umpire; and the rents so assessed and fixed by them sha.ll be the rents demand-able and payable for the next then ensuing two years, monthly, and every calendar month, for each and every one of tbe bouses, and so on from two years to two years, during tbe term.”
    
      Iii the latter part of the year 1855, the United States finding they had no further use for these warehouses, the Secretary of the Treasury forwarded to the collector of the port of San Francisco the follo wing instructions:
    “TREASURY DEPARTMENT, November 17, 1855.
    “M. S. Latham, Esq., Collector, &c., San Francisco ;
    
    “ Sir : Enclosed please find the opinion of Attorney General Gushing, that there is nothing in the law, nor in the lease from Eldridge, that prohibits the underletting the warehouses. You will, therefore, proceed to underlet them according to the instructions to your predecessor; but you may retain one of them for storage, and, if you deem it to the interest of the government, you may allow these stores to become bonded warehouses of class No. 3, if the underlessors desire it, so that they may be used for storage. I think the whole had better be un-derlet, so that we may see the annual loss the government sustains on them. The rent, according to the lease, will have to be valued again in May next. You may make it one of the terms of the underletting that the underlessors shall pay to Eldridge all the rent that shall accrue under the lease after the revaluation in May next, and stimulate the United States shall pay the rent to that time; and, if you can make such an under-letting, you are authorized to underlet for the balance of the time. Indeed, the .Department, to get clear of the lease, toould agree to pay a bonus of $3,000 per year toward the rent during the remaining six years after May next, besides paying the rent to that time, which you will consider within the discretion confided to you. In disposing of this lease, you will use your own discretion whether the lease be disposed of by private contract or at public outcry.
    “ I am, very respectfully,
    “JAMES GUTHRIE,
    “ Secretary of the Treasury.'1'1
    
    On receipt of the above directions, to wit, December 31, 1855, the collector caused to be inserted in the “ Alta Californian ” newspaper the following advertisement:
    ‘“Collector’s Oeeice, San Francisco,
    
      December 31, 1855.
    “Notice is hereby given that three oí the four government warehouses situated at northwest comes. Union and Battery streets, commonly known as tlie ‘ Eldridge warehouses/ will be rented upon reasonable .terms. This property is now held by the government under a lease which will not expire before May 1,18G2. The buildings may be used by the party letting-them as United States bonded warehouses, of class No. 3, for storage of merchandise. Sealed proposals will be received up to the 15th of January next. Persons desiring to see the lease,, or further information, are requested to call at this office.
    “MILTON S. LATHAM,
    “ Collector of Customs.”
    On the iirst day of February, A. D. 1856, the United States sublet the above-named property to the claimant in this suit.
    The lease from Eldridge was made part of the agreement thus entered into.
    The fourth paragraph of this sub-lease is in the following-words, with the important proviso attached, which conveys to Hickey his right to the bonus now claimed:
    “ That whereas the said party of the first part has sub-leased,, as lessees aforesaid, said above described buildings to the said party of the second part, from the date aforesaid to the termination of the lease, hereto annexed, made and entered into between the party of the first part and James Eldridge, for the following consideration: the said party of the second part paying to the party of the first part the sum of five hundred dollars per calendar month until the first day of May, in the year of our Lord one thousand eight hundred and fifty-six, at the expiration of which time an appraisement is to be made as per terms of the annexed lease; when the said party of the second part covenants and agrees to pay to the said party of the first part the sum awarded to he due to James JUldridge hy the said arbitrators for the two following years — from the said first day of May, in the year of our Lord one thousand eight hundred and fifty-six, to the first day of May, in the year of our Lord one thousand eight hundred and fifty-eight; and after the first day of May, A. D. 1858, the said party of the second part covenants and agrees to pay the sum that they may be awarded for the following years, and so on until the annexed instrument made between the party of the first part and James Eldridge may be fully complete and ended :
    
    
      “ Provided, nevertheless, that the sum of two hundred and fifty dollars per calendar month is hereby saved and reserved to the said party of the second part, by the said party of the first part, during the term of the aforesaid lease, as a bonus to the said party of the second part for leasing said warehouses, said amount of two hundred and fifty dollars to be paid at the expiration of each month after the execution of this instrument, and to continue-monthly until the completion of the same.”
    
    At the proper time the appraisers were appointed in accordance with the terms of the Eldridge lease, but they failed to-agree upon an award.
    On the 13th day of April, A. D. 1857, the United States-entered into a second agreement with the said Eldridge. The-seventh paragraph of this agreement is in the words following:
    “ In consideration of the transfer above provided for, and of the payment of the one hundred and ten thousand dollars-hereinbefore agreed to be made to the said Eldridge by the United States, the said Eldridge agrees, covenants, and promises that he will and accordingly he does by these presents, release, discharge, and acquit the United States from all claim and demand for any further rent now due or hereafter to accrue under the lease from Eldridge to the United States as fully and entirely as if the said lease had never been made. And it is further agreed and covenanted that the United States are not liable for any act or thing done or omitted to be done by them, their officers, or agents in, ábout, or concerning either of the leases herein recited, or about the property leased, or any transaction with any tenant thereof, but the said JEJldridge shall indemnify and save the United States from all claims or demands which may be made against them for or on account of any promises or covenants made by the United States or either of said leases, or on account of any acts or omissions of officers or agents of the United States concerning said property, leaving* the United States entirely free from all obligations arising out of said leases in any way whatever. But the said Bldridge covenants that he will faithfully fulfill all the obligations of the United States to said Jliclcey, and will not himself demand, nor suffer any other person to demand of the United States any compensation for non-fulfillment of those obligations, whether it be that the said Eldridge can not or will not fulfill them.”
    While Hickey held, possession of this property, he stored goods belonging to tbe Ligbt-house Board. Tbe amount of tbis item is one thousand three hundred and seventy dollars and seventy-five cents. Tbe items are correct, and 'the bill is unpaid.
    The foregoing extracts from the papers clearly show that ITickey was to pay five hundred dollars per month from the commencement of his lease until May 1, 1856. After that date lie agreed to pay such rent — large or small — as might he assessed hy the appraisers. As a consideration of these covenants, Hickey was to receive $3,000 per annum, and to enjoy peaceable possession of the said “premises, without any manner of let, suit, trouble, or hinderance, of or from the said party of the first part, or any other person or persons whomsoever.” It will be observed that Hickey had no choice in the selection of these appraisers'— that power the United States did not delegate to him. He could not, therefore, be held responsible for .their non-agreement, nor could he be asked to appoint others in their stead. Hickey’s covenant was to pay such rent as they might assess. Until this event took place, no rent ivas payable or demandahle. The assessment was a condition precedent to the payment of rent.
    Did the non-agreement of the appraisers first appointed give • to the United States the right to take the law into their own hands, and disregard their covenants to Hickey? And why' were not others appointed? What evidence have we that, if two other gentlemen had been selected, they would not have agreed on a rent? But suppose they had disagreed. That could not destroy' our rights. Having no choice in the selection, we cannot be held responsible for the acts of the appraisers. ,
    But the bonus of two hundred and fifty dollars per month, stipulated to be paid by the United States to Hickey, depended ■on no condition except the taking of the lease. In the language of the proviso to the fourth paragraph of the lease, it was a bonus for leasing said warehouses. It became a debt against the United States the moment the lease was executed.
    It is not sufficient to say the United States sold their interest back to Eldridge. This they could not do without the consent of Hickey.
    Nor was this all the United States stipulated to perform. The United States guaranteed peaceable xmssession against all comers.
    
      Hence, when tbe suit was commenced to dispossess Hickey, be, relying' on tbe good faith and tbe guarantee of tbe United States, contented himself with notifying them, that a suit had been commenced by the party to whom tbe United States bad sold their interest.
    If it be agreed between A and B that B shall liquidate a particular debt due to 0, such an arrangement can in no way prejudice tbe right of C to sue A for its recovery.
    That in order to relieve a party liable on a specialty, there must be an express agreement to that effect. An executed contract cannot be discharged except by release, or by performance of tbe obligation. Hence it is held as a rule that an obligation is not made void but by a release.
    
      Mr. Assistant Attorney General Talbot for tbe defendants:
    This lease went into effect, tbe claimant entering upon the premises and paying the monthly rent of $500, less a monthly deduction of $250, tbe agreed bonus, until May 1, 1856, after which the rent, under condition, was to be rated by an appraisal. Such appraisal, the petitioner avers, never was made, so that, upon his hypothesis, he was under no obligation to pay any rent accruing after May 1,1856.
    Further examination of the contract of lease shows, however, that the appraisal was to be made only “ if the Secretary of the Treasury shall require it.”
    That the Secretary of the Treasury did require this appraisal is not shown.
    There was in this lease a further covenant of the party of the first part, for the peaceful and quiet enjoyment of the leased premises by the party of the second part, “without any manner of let, suit, trouble, liinderance of or from the said party of the first part, or any other person or persons whomsoever.”
    On April 13,1857, the United States, by their Secretary of the Treasury, assigned to one James Eldridge all their interest in and to the above lease; Eldridge covenanting “ that he wall faithfully fulfil all the obligations of the United States to said Hickey, and will not himself demand, nor suffer any other person to demand, from the United States any compensation for non-fulfillment of those obligations, whether it be that the said Eldridge cannot or will not fulfil them.”
    
      The petitioner avers this agreement between the United States and Eldridge to have been made without his knowledge or consent, and to be invalid in affecting his rights.
    He farther sets forth as the gravamen of his claim, to which the xireceding statements are mere inducement, that, on August 19,1857, Eldridge commenced an action to dispossess the petitioner of the aforenamed premises. Thereupon the claimant “contented himself with notifying the collector of the port of San Francisco, and G-. De la Torre, the United States attorney for that district, that proceedings had been instituted to dispossess him.”
    Mr. Dela Torre, .he goes on to state, appeared in the case, “and postponed the trial from time to time till the 5th day of September, 1857, when judgment was rendered for the plaintiff, the defendant not appearing.”
    
    To any action resting upon an alleged breach, by the eviction set forth, of that covenant, the answer is, that the defendant in the action for restoration is not entitled to any remedy in this case against his covenantor, because—
    I. He did not defend in that action, but allowed judgment by default, he not appearing.
    II. This allegation the record of the court decreeing the eviction finds to be true, the defendant (this claimant) confessing its truth by his non-appearamce to contest it. Thus appears a state of facts, under which the United States never covenanted to maintain his peaceable enjoyment, namely, non-payment of rent. An eviction lawfully arising out of the tenant’s own default gives no right against his warrantor. (Kelly vs. Dutch ■Church of Schenectady, 2 Hill, N. Y., 105.) The United States themselves might have procured an eviction for this cause. (Paiten vs. Deshon, 1 G-ray, 325; 4 Kent, 473; Taylor’s Landlord and Tenant, sections 295, 636.) Nor does the validity of this ground of eviction rest merely upon the default of the defendant. It appears, upon an inspection of the papers, that non-appraisal whs not a valid excuse for non-payment of rent accruing after May 1, 1856. Appraisal was to be made only if the Secretary of the Treasury shall require it, and no evidence is offered to show' that the Secretary of the Treasury did so require it.
    TIT. The good defence to that action which the claimant now alleges in this court, namely, that he was excused (by non-appraisal) from tbe payment of rent accruing after May 1, 1856, be made no use of whatever in tbe action where, if good as now maintained, it would have prevailed to prevent his eviction. (Curtis vs.' Peering, 12 Maine, 501.)
    IY. Another ground of defense to that action, now set forth, was also neglected by the claimant. . He now maintains that the agreement between the United States and Eldridge gave Eldridge no rights as against him. This would have been good defence in the action for eviction, where the claimant did not use it.
    Y. It was the duty of this lessee to notify his lessor of the grounds of the action brought against him., and of all matters of defence thereto within the lessee’s knowledge; and this notification the claimant did not give to the United States in this case. (Paul vs. Witman, 3 Watts and Sergeant, 409.)
    VI. No notice whatever was given to the United States of the pendency of this action, or of any matter relating thereto.
    YII. There is no evidence that any such loss accrued as is claimed, from the breaking up of any warehousing business of the claimant.
    VIII. For eighteen months, (May 1, 1856, to November. 1, 1857,) during which he was in undisturbed occupation of the premises in question, the claimant is now indebted to the United States for rent at the rate of $500 per month, for which the United States have filed an account in set-off, upon which they now claim judgment against the petitioner, in accordance with law.
    IX. The bonus in this case was,' in fact, a mere allowance of deduction from monthly rent, and cannot be recovered when no rent is paid.
   Casey, Ch. J.,

delivered the opinion of the court:

On the 28 th July, 1851, James Eldridge entered into articles of agreement with Thomas Corwin, the Secretary of the Treasury, for the erection and lease to the United States of four certain warehouses, in the city of San Francisco, California, the rent not to exceed $1,500 per month each ; the lease was for ten years. '

By the terms of the lease, the stipulated rent of $1,500 per month for each of said warehouses was to continue for two years, and after that, at the end of each two years, there were to be referees chosen by the parties to rearrange and determine the rent for the two succeeding years.

The Avarehouses were finished and ready for occupation on the 1st May, 1852. The United States entered into possession and paid the rent until the 1st May, 1854. Then referees were chosen, and a new assessment of the rents for the next two years was made at the same rate. In February, 1856, under instructions from Mr. Guthrie, then Secretary of the Treasury, Milton S. Latham, collector of the port of San Francisco, sub-leased these warehouses to P. J. Hickey, the claimant in this case, for the rent of $500 per month for the warehouses, subject, after the 1st May, 1856, to the reassessment of the rent by the referees, as provided in the lease from Eldridge to the United States. This lease contained the following clause:

“ Provided, nevertheless, that the sum of two hundred and fifty dollars per calendar month is hereby saved and reserved to the said party of the second part, by the said party of the first xiart, during the term of the aforesaid lease, as a bonus to the said party of the second part for leasing said warehouses, said amount of two hundred and fifty dollars to be paid at the expiration of each month after the execution of this instrument, and to continue monthly until the completion of the same.”

It also contained a clause of reentry by the United States for non-payment of rent. Hickey entered into possession under this lease, and paid the rent for the months of February, March, and April, 1856, as stipulated, to Mr. Latham, the collector of the port, he making out the bills for the rent at $500 per month, and deducting the $250 bonus or credit, which the Government allowed to Hickey on his lease. An effort was then made to have a reassessment of the rent, according to the original lease between Eldridge and the United States, but the referees chosen for that purpose failed to agree. No umpire was chosen, and matters remained in this situation, the claimant being in possession but paying no rent subsequent to 1st May, 1856, until the 13th April, 1857. On that day the United States made a compromise with Eldridge, paying him $110,000, he releasing them from further liability for rent, and they assigning' to him the lease with the claimant, and all rents then due upon the same, or to become due thereafter.

In August, 1857, Eldridge instituted proceedings before a justice of tbe peace in San Francisco, tinder tbe landlord and tenant laws of California, to.recover possession of tbe premises. The claimant notified tbe collector of tbe port and tbe district attorney of tbe pendency of these proceedings. On tbe 5th September, 1857, judgment of restitution of tbe premises was rendered against the claimant and execution awarded, and be evicted and Eldridge put into possession. The Lighthouse Board bad certain materials and supplies stored in these warehouses while in possession of tbe claimant. Tbe bill was regularly made out and certified by tbe proper officers, and amounted to tbe sum of $1,370 75.

The claimant seeks to recover tbe monthly bonus reserved of $250, for each month from tbe 1st May, 1856, until tbe 1st May, 1862, being six years, and amounting to $18,000, and thfe account for storage already mentioned.

By tbe express terms of tbe lease between Hickey and tbe United States, what is called in tbe lease a bonus is to be a mere reservation out of and deduction from tbe rent to be paid, and continued only while tbe lease was in force, and no longer. When tbe lease was at an end this payment stopped. As the sub-lessee of tbe United States, Hickey, as against Eldridge, acceded to all tbe rights which they held under tbe first lease from him, and it was bis duty, as well as interest, to have tbe proper assessment of the rent made, and if Eldridge failed, to compel it by proper legal proceedings. This be did not do or attempt. ■ Instead of that be occupied from tbe 1st of May, 1856, until tbe time of bis eviction in September, 1857, without tbe payment of any rent whatever. For bis default be was evicted by due process of law. This determined tbe lease, and all his rights in it ceased as of that time. Tbe lease from tbe United States to claimant and all tbe rent due on it was assigned to Eldridge. Tbe bonus that accrued prior to the eviction Hickey may set off against any demand for rent which Eldridge might prefer against him. He can recover against no one for any bonus after bis eviction for bis own default.

For tbe amount of tbe account, as above stated, the claimant is entitled to recover.

Judgment is to be entered for claimant in tbe sum of $1,370 75.

Nott, J.,

concurring:

I regard all of tbe evidence produced by tbe claimant, save that certified'by tbe Secretary of tbe Treasury, as utterly incompetent. Thus, exhibit H is an ex parte certificate given by one who, the petition alleges, was chosen to reappraise tbe rent. Thus, exhibit L is proved by an ex parte affidavit made many years before tbis suit was brought. Thus, exhibit K is proved by the informal, undated, unattested certificate of a justice of the peace.

Assuming the facts discussed to be facts proven, the claimant has established a good cause of action, but has shown no damages whatever.

The lease under which the defendants acquired the demised premises reserved a certain rent of $1,500 a month. But, so says the lease, “it is understood, covenanted, and agreed that the United States shall have the privilege, if the Secretary of the Treasury shall require it, at the end of two years from the commencement of the term, and so on from two years to two years during the term, to have an assessment of what shall be a fair, proper, and'reasonable rent for the said houses for the then next ensuing two years.” This assessment was not a fixed condition ; it was a “privilege” of the United, States ; it was to be only “ if the Secretary of the Treasury shall require it.”

The lease from the United States to Hickey contained two agreements on the part of the defendants: 1st, that at the expiration of the two years they were to cause an appraisement of the rent to be made, as provided by the terms of the preceding lease under which they held; 2d, a covenant that the claimant should at all times during the term “ peacefully and quietly have, hold, and enjoy the said demised premises without any manner of let, suit, trouble, or hinderanee of or from the said party of the first part or any other person or persons whomsoever

The defendants broke both of these agreements. The claimant agreed to pay the fixed rent up to the expiration of the two years, and he did so. As between himself and the defendants there was then nothing for him to pay till the appraisement should determine the amount. The claimant kept his agreement and was guilty of no default whatever. He was evicted because the defendants did not keep theirs.

It is'argued that the proceedings for restitution of the premises before a justice of tlie peace bound tbe claimant and now bars bim from questioning tbe rightfulness of the eviction. There are several answers to tbe argument. 1st. Tbe claimant was not bound to resist. He might suffer the eviction, and then bring bis action under the covenant that be should not be molested by “suit.” 2d. The judgment for restitution went by default. Hence tbe fact involved of rent being due cannot be set up as an estoppel. 3d. Tbe defendants here were notified to defend that suit, and appeared for and on behalf of tbe claimant by their district attorney. They suffered the suit to go by default and without notice to the claimant of their withdrawal. The United States are not bound by the wrongful acts of their agents, nor can they take advantage of them. It was this law officer, acting as such, who suffered the default, and from it they can reap no advantage. 4th. If, as the defendants claim, the proceedings of restitution were instituted by Eldridge, not as landlord and owner on the original lease under which the United States held, but merely as assignee of Hickey’s lease and successor of the United States, then the United States were neither parties nor inlvies to the proceeding. They would not have been bound by it if it had gone contrariwise, nor can they bind their covenantee with it when it went against him. 5th. It may be that there was rent due to Eldridge, and that the eviction (as between Eldridge and Hickey) was lawful and just ; but if so, it was because the United States violated their agreement in neglecting to have the rent reappraised. But notwithstanding the justice of the case, no damages can be awarded, for none are shown. The claimant is mistaken in supposing the so-called ubonus” to be the measure of his damages. It was but a deduction from the rent.

As to the second cause of action it falls within the letter of the statute of limitations. It is not a claim which “ accrued six years before the passage” of the act 3d March, 1863, (12 Stat. L., pp. 763, § 10;) yet, is a claim wdiich accrued before the passage of the act. It is one of that anomalous class of cases where, if the statute be construed literally, a claimant may have been left with but a single day wherein to bring suit. The claim accrued in October, 1857; the act passed in March, 1863; the six years from the time the claim accrued expired in October, 1863; the time wherein suit might have been brought extended but from the 3d March to the 1st October. But the literal meaning is against the spirit of tbe act, which, manifestly intended that there should be at least three years allowed to every claim. The statute, however, is not pleaded here; it would be unjust to allow it to be. Judgment upon the merits should be rendered for the claimant.