Case ID: ohio-st_16/html/0435-01.html
Source: Caselaw Access Project
Author: {"author": "Welch, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William Stephenson and Mary Ann Read v. Ezekiel S. Haines et al.
    "Where land is conveyed in fee, subject to the payment of annual rents by the grantee to the grantor, and the deed of conveyance reserves to the grantor the right to re-enter and avoid the conveyance upon default of payment, the grantor has a lien upon the premises for the rent, superior to that of a mortgagee of the grantee.
    Error to the Superior- Court of Cincinnati.
    This case comes here from the Superior Court of Cincinnati in géneral term, upon a certificate that there is not a quorum of disinterested judges in that court to sit in the case. It is a petition in error to reverse a decree of the same court rendered in special term.
    The original case-was a petition fbr the sale of mortgaged premises, known as the Dennison House property. The mortgagor, William Dennison, held the property subject to the payment of what is called “ ground-rent,” a large amount of which was in arrear at the time of rendering the decree. The ^parties-entitled to the rent, as well as various other incumbrancers, were made defendants in the cause; and the court ordered the premises to be sold free and discharged from the rents in arrear, reserving, till tbe final hearing, the question whether the parties to whom the rents were payable, had a lien therefor upon the premises, superior to the lien of the mortgagees. Upon the final hearing, the court decided this question in the affirmative, and ordered the proceeds to be distributed—first, in payment of the rents; and next, in payment of the other incumbrances. Whether the court erred in this decision, is the only question presented by the petition in error. The plaintiffs in error are mortgagees.
    The following is a copy of one the deeds by which the so-called rent was reserved, and under which Dennison, the mortgagor, derived or held title at the date of the mortgage:
    “This indenture, made this twenty-third day of 'June, anno domini one thousand eight hundred and twenty-eight, between Thomas Dugan, late of the city of Cincinnati, by Patrick O’Reilly, his attorney in fact, of the first part, and Ephraim Carter, of the same place, of the second part, witnesseth: That the said Thomas Dugan, for and in consideration of sums of money hereinafter mentioned, and upon the terms and conditions hereinafter specified, hath granted, bargained, and sold to the said Ephraim Carter, his heirs or assigns, the following described property, to wit: Part of lot number ninety-two, in the city of Cincinnati, on Fifth street, at the corner of a lot leased or sold to Codrington Cheesebrough, Ephraim Carter, and Pentheus J. Holcomb, being seventy-three feet east of Main street; thence eastwardly, along Fifth street, thirty-two feet; thence northwardly, at right angles with Fifth street and parallel with Main street, sixty-five feet, more or less, to a part of said lot conveyed to William Dennison; thence westwardly with said line, thirty-two feet; and thence northwardly to the place of beginning. To have and to hold the said described piece of ground to the said Ephraim Carter, his heirs and assigns, forever,
    
      subject, nevertheless, to the payment and reservation of the following sums of money, to be paid on the several days hereinafter specified, to wit: The *sum of thirty-six dollars on the tenth day of July, in each and every year; the like sum of thirty-six dollars on the tenth day of October, in each and every year; the like sum of thirty-six dollars on the tenth day of January, in each and every year; and the like sum .of thirty-six dollars on the tenth day of April, in each and every year, to the said Thomas Dugan, his heirs and assigns, executors and administrators, to be paid by the said Ephraim Carter, his heirs, executors, administrators, and assigns. And the said Carter does hereby covenant for himself, his heirs, executors, administrators, and assigns, that he will pay to the said Thomas'Dugan, his heirs, executors, administrators, and assigns, the several sums of money aforesaid charged and reserved as aforesaid,-upon the several days specified in each and every year, forever, and subject to the payment by the said Carter, his heirs, executors, administrators, and assigns, of all taxes and public dues of every description and character which maybe assessed upon said piece of ground; and the said Ephraim Carter, for his heirs, executors, administrators, and assigns, covenants and agrees with the said Thomas Dugan, his heirs, executors, administrators, and assigns, that he will well and faithfully pay the said rents and charges in the. manner agreed on. And it is understood and agreed between the parties to these presents, that the grant hereby made and the estate hereby created is subject to this further condition, that if at any time the said charges of thirty-six dollars upon any one of the said several days specified shall remain due, or any part thereof shall remain so due and unpaid for the space of sixty days when the same shall become due, or if the taxes or public dues assessed upon said piece of ground shall not be duly paid as they become due, then the said Thomas Dugan, his heirs, executors, administrators, or assigns, upon serving a written notice upon the said Ephraim’ Carter, his heirs, executors, administrators, or assigns, the sajd notice to be served the next day after the expiration of the sixty days, that if said charges, taxes and public dues be not paid within twenty days from the expiration of said sixty days, the said Thomas Dugan, his heirs, executors, administrators, or assigns, will consider the estate hereby created as forfeited, and it shall and may be lawful *for him or them t.o re-enter and repossess the same, with all the appurtenances thereto belonging as of the original right, in the same manner as if the estate hereby created had never commenced. And the said Thomas Dugan, for himself and his heirs, doth covenant and agree with the said Ephraim Carter, his heirs and assigns, to warrant and forever defend the said piece of ground before described to the said Ephraim Carter, his heirs and assigns forever, against all persons lawfully claiming the same. And it is understood by and between the parties, that if at any time the said Carter, his heirs or assigns, shall pay the said Thomas Dugan, his heirs, executors, administrators, or assigns, in additions to the charges hereby accrued, the sum of twenty-four hundred dollars, then the said Ephraim Carter, his heirs and assigns, shall hold the said described piece of ground, with the appurtenances, free and discharged from all the conditions aforesaid. In testimony whereof, the said parties have hereunto set their hands and seals the day and year above written.”
    The record shows that no demand of the rents was made at the times they were payable, nor was there any re-entry made by the grantor, to avoid the deed of conveyance or repossess the premises.
    
      Charles Fox, for plaintiffs in error, argued;
    1. If a grant is made in fee, reserving rent simply, without providing any means of enforcing payment, the rent becomes a simple debt to be recovered by action.
    2. The deed of lease may contain such reservations, either of right of entry—clause of distress in England—retaining a lien on the property and improvements.
    3. The landlord must rely on the sufficiency of the provisions contained in the deed to secure the payment of the rent. The court can not add to these provisions.
    4. The law does not recognize a landlord’s claim for rent due-as any thing better than any other just claim.
    Add cited: 11 Ohio, 367; 18 Vt. 462 ; 29 Vt. 465 ; 39 Penn. St. 163: Shoenberger v. Mount, 1 Sup. Ct. 567; 1 Dutch. 285; Coke Litt. secs. 217, 218-143b. 144a; *24 Barb. 336; Boyd v. Talbert, 12 Ohio, 213; 19 N. Y. 76; 3 Kent’s Com.461, 462, and notes; 2 Bro. C. 0. 338, 518.
    5. Under the language contained in this deed there is no lien created on the land for the payment of the ground-rent. The words rents and charges are used as synonymous.
    
      
      Alexander Todd, for defendants in error,
    argued that they should be paid out of the proceeds of the sale, what is due on the quarterly installments of rent, because they have a lien on the land for their payment, as shown :
    1. By the situation of the parties, and the nature of the transaction, which is, in effect, a sale of land for so much money, with interest thereon, payable quarterly until the principal sum is paid, and both the principal and interest are charged on the land.
    ■2. By the very language of the conveyance itself, which is made subject to them, and call them charges on the land whenever it speaks of them. See Coe v. C., P. & I. R. R. Co., 10 Ohio St. 374, 405, 406.
    3. By the force and effect, and true construction of the clause of redemption ; and by the nature of the clause of re-entry, as construed in equity.
    The clause of redemption provides that if the grantee, his heirs, etc, shall at any time pay to the grantor, his heirs, etc., “in addition to the charges hereby reserved,” the sum of, etc., then the said grantee, his heirs, etc., shall hold the said piece of ground “free and discharged from all the conditions aforesaid.” But if these quarterly payments are not a charge, a lien on the land, why require them to be paid before the land shall be free and discharged?
    In the clause of re-entry, the quarterly payment is denominated “ the .said charge.” In the clause of redemption, these payments are still called “ charges.” In the second covenant of Carter, the grantee, they are called “ rents and charges.”
    
    Thus, we have Carter, the party through whom the plaintiffs in error claim, acknowledging all through this deed that these payments are charged on this land. Eor Carter joins in the execution of the deed herein, the covenants are his, and the expressions in them are his also.
    *See Bantleon v. Smith, 2 Binn. 146, 151; Gordon v. Coney, 5 Binn. 552; Pancoast’s Appeal, 8 Watts & Serg. 381; Dougherty’s Estate, 9 Watts & Serg. 189 ; Ter Hover v. Kerns, 2 Penn. St. 96; Wood’s Appeal, 30 Penn. St. 274; Cupit v. Jackson, 13 Price (Exch.), 72; French v. Morgan, 12 E. Ch. (2 Malloy,) 574; Manley v. Hawkes, 2 Drury & Walsh, 363 ; 1 Bro. C. C. 423 ; Matthew v. Bowler, 31 E. Ch. (6 Hare,) 110; Neas’ Appeal, 31 Penn. St. 293.
    
      Lincoln, Smith & Warnock, for defendants in error, argued:
    
      There was no error in the action of the Superior Court:
    ■ 1. These indentures originated in Philadelphia, from which city Mr. Dugan came. They were a species of conveyance well known and understood there, and in reference to which the rights of the parties in this regard were well understood and defined. The courts of that state have on many different, occasions held that these conveyances did create a preferred lien in favor of the holder of the grantor. See among other cases, Bantleon v. Smith, 2 Binn. 146; Pancoast’s Appeal, 8 Watts & Serg. 381; Dougherty’s Estate, 9 Watts & Serg. 189; Wood’s Appeal, 30 Penn. St. 274; Mather v. Michael, 13 Penn. St. 302; Ter Hover v. Kerns. 2 Barr, 96; Spangler’s Appeal, 30 Penn. 277.
    2. The same view of the law is taken in New York and Louisiana. Robinson v. Ryan, 25 N. Y. 327; Succession of Canoge, 1 La. An. 211.
    3. The clause of re-entry carries notice to all the world, and as between the grantor and grantee, and those claiming under them, binds the estate for the performance of the covenant to pay rent. Clearly, it is intended as a security for these rents to the grantor. It is his means of enforcing the payment of rent out of the property. Whenever it is cut off by a sale, as to the back rents, the grantor must have his equivalent, or his remedy in the proceeds of such sale.
    4. This right of re-entry runs with the land. It binds the land. It is transferred to the grantee when the land is conveyed to him, not as a separate chose in action, but as a covenant attached to the estate, and forming part of it, and of which all must take notice. It inheres in the land, and is so *for the very purpose of securing the rent. It binds the estate to which it is attached, in whose-soever hands it may be. Masury v. Southworth, 9 Ohio St. 347; Van Rensselaer v. Hoyt, 19 N. Y. 95-97; Harbaugh v. Zetmeyer, 2 Rawle, 160; Kerr v. Day, 14 Penn. St. 116 ; Scott v. Lunt, 7 Pet. 606; Banteleon v. Smith, 2 Binn. 148 ; Brewster v. Redgell, 1 Mod. 3; 1 Story’s Eq. Jur., sec. 687; Ingersoll v. Sargent, 1 Wheat. 350.
    5. This rule seems to follow also from the common maxim in equity, “ that equity looks upon that done which ought to be done.”
    6. What is this payment of rent but the purchase money of the estate, falling due in perpetual quarterly installments, with the estate as a security. Now, that it is such, and that all parties dealing with the grantee are bound to know that it is so, and whether paid or not, seems very clear.
    
      7. By the very terms of this lease, the rent is an equitable lien upon the estate. It reads, “ Eor and in consideration of the sums of money hereafter mentioned, and upon the terms and conditions hereinafter specified, hath granted, etc., . . . subject nevertheless to the payment and reservation of the following sums of money, to be paid upon the several days hereinafter specified.”
    These rents are also, spoken of as “ charged ” upon the estate. Then there is this clause: “ And it is understood and agreed that the estate hereby created is subject to the further condition, that if at any time the said charges of rent, etc., are not paid',” then the right of forfeiture and re-entry arises.
    Now, the terms of this conveyance are peculiar. They make the payment of these rents a condition of the grant. They make the “ estate granted ” “ subject to ” them, and provide as a remedy reentry. They speak of the rents as rents “ charged ” upon the estate. We claim that the terms of the grant in these indentures secure all that we require. See Easter v. L. M. R. R. Co., 14 Ohio St. 53, and cases cited.
    Then look again at the clause for the final extinguishment of the ground-rents at the close of the deed. It is not Carter and his heirs that are to be held “ free and discharged ” from the conditions, among which the chief was the payment of *rent, but the ground and its appurtenances. This clause also shows that these rents were attached to and a lien upon it.
    See also, Neas’ Appeal, 31 Penn St. 294; Bear v. Whistler, 7 Watts, 148; Dewalt’s Appeal, 20 Penn St. 239; Mohler’s Appeal, 5 Penn. St. 420; Matthew v. Bowler, 6 Hare, 110.
    8. The estate granted by these indentures has sometimes been denominated a base-fee, or rather a fee which is subject to another fee, to wit, the perpetual payment of rent in quarterly installments. The estate granted can not be separated from it, or released from it, because it is granted upon that express condition, and “ subject ” thereto. The - fee is not absolute and unconditional. Taylor on Landlord and Tenant, 372 ; Wolveridge v. Stewart, 30 E. C. L. 315; Same v. Same, 1 Crompt. & Mees. 654; Walker v. Physic, 5 Barr, 204, 204; 2 Bla. Com. 109.
    And these rents reserved are somewhat like those denominated fee-farm rents. De Royster v. Michael, 2 Seld. 497; Scott v. Lunt, 7 Pet. 606.
    
      A fee-farm rent is said to be a rent charge issuing out of an estate in fee. 2 Bla. Com. 43.
    We do not claim that they are a technical rent charge, for-that was a species of rent to which a distraint of personal property on the land was attached.
    It is also spoken of as a rent service. Ingersoll v. Sergeant, 1 Wheat. 337. They are, in every essential feature, like an annuity charged upon the land. Cupit v. Jackson, 13 Price, 733 ; Manby v. Hanks, 2 Drury & Walsh, 323; French v. Morgan, 2 Molloy, 293.
    But the common designation which they have received both here and in Philadelphia, from which place they came, is ground-rents, a peculiar expression in use to describe these perpetual rents fastened upon the ground.
   Welch, J.

The whole case is a question of the construction and effect of this instrument. Does it reserve or create a lien upon the premises for the sums of money therein denominated “ rents and charges?” We have no hesitation in holding that it does. Such, we think, is its plain legal import, ^whether regarded as a deed of conveyance, or, as counsel for plaintiffs claim it to be, a mere “ lease.”

Both on reason and authority, a lien for the rent always exists where the lease provides for a right of re-entry—that is, the right, upon non-payment of rent, to avoid the lease, and repossess the premises demised. The greater right, to take the whole estate, ought to be held to include the less right, to take enough of it to pay the rents.

Properly speaking, however, this is no “ lease.” A term of years, and a reversion, seem indispensable to the idea of a lease. If this is a lease, it is also much more. It is a deed of conveyance in fee, subject to-a condition of defeasance. Its legal effect is to pass to the grantee an estate in fee simple, subject to be defeated by the nonpayment of annuities, denominated in the instrument “ rents and charges.” The truth is—and it is impossible to shut our eyes to the fact—that the real transaction was a sale of the premises for $2,400, with a right to defer the payment of the principal sum, so long as the interest thereon should be paid quarter-yearly; and a conveyance of the premises upon condition to be void in case of non-payment. In other words, the transaction was equivalent to a sale and conveyance, with a mortgage to secure the payment of the purchase-money, thereby creating a twofold lien in favor of the vendor— the equitable lien for the purchase money, and the lien by virtue of the reservation in the deed.

But it is quite immaterial in which aspect we consider the deed. Yiewed in either of these characters—as a lease, with power to reenter for non-payment of rent; as a deed of conveyance, subject to the payment of money charges; or as a sale and conveyence, avoidable by the vendor upon non-payment of the purchase money—so far as the question of lien is concerned, the instrument has all the elements of a mortgage. It only differs from a mortgage in the fact, that the estate pledged for the debt is reserved, instead-of being conveyed, and in the consequent further fact, that it is wow-payment, instead of payment, which is to defeat the conveyance. In both, there is a condition in the nature of a forfeiture, which at law casts the whole estate upon the creditor,'whenever *it is broken. In both, there exists the equitable right to be x’elieved against the fox’feiture, by payment of the amount due, called the equity of redemption ; and iix both, there is the correlative right of the creditor to waive the forfeiture, go himself at once into equity, and subject the estate to the payment of his debt. Iix other words, the creditor has a lien on the thing pledged, just a pawnbroker or a carrier has a lien. This is the weakest form of the creditor’s right. It is his right in equity. At law, his x-ight is to hold the thiixg absolutely, in lieu of the debt. In equity, he can not do this, but he can hold it till payment is made. That is to say, he can hold it liable for the debt, which is nothing more or less than holdixxg a lien upon it.

And it is no answer to this equitable claim for a lien, to say that the forfeiture was not insisted upon at the time of default; that is, that no demand of payment was made, or re-entry effected. That is a good answer to the forfeiture, but it is no answer to the equitable lien. The law abhors forfeitures, and will never, therefore, deprive a party of his rights in equity because he waives a forfeiture. If good conscience require its waiver at all, the sooner it is waived the better. The failure to make demand and entry in this case, ixo more destroys the grantor’s right to subject the land to the payment of his just debt, than does the failure of a mortgagee to bring ejectment, when the mortgage has become absolute, destroy his right to foreclose the mortgage.

We see no error in the judgment of the court below, and it will therefore be affirmed.

Scott, C. J., and Day, White and Brinkerhoee, JJ., concurred.