Case Name: McHenry v. Carson
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1884-01
Citations: 41 Ohio St. 212
Docket Number: 
Parties: McHenry v. Carson.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 41
Pages: 212–225

Head Matter:
McHenry v. Carson.
C. and M., partners, field as joint lessees a lease of certain premises for ninety-nine years, renewable forever, with covenants for payment of rent, taxes, and assessments. The partnership was dissolved, and C. conveyed to M. all his undivided interest in the leasehold. The assignee o£ the reversion brought suit on the covenants for rent, against C. and M. jointly, for arrears of rent accrued after the dissolution of the partnership. Pending the suit, M. being in default of answer, C. filed an answer denying all liability for rent, but afterwards paid to the assignee of the reversion the sum of $500, who in consideration thereof, negotiated and executed to him 'a release from all and any liability arising on or growing out of the lease, and forever discharged him from all and any covenants therein, and from all the obligations thereof.
Meld: 1. There is not such a presumption that the above named sum was paid on accrued rent, and not in discharge of future contingent "liability on the lease, as would entitle C. to recover such sum of M., as money paid for and on his account, upon an implied promise to reimburse C. therefor.
2. The burden is not on M. to prove that such sum was not applied on the rent.
Error to the Court of Common Pleas of Hamilton County. Reserved in the District Court.
Enoch T. Carson, the defendant in error,
brought two suits before a justice of the peace, against John McHenry, the plaintiff in error, to recover in the aggregate the sum of $500, which, it was alleged, Carson had been compelled to pay for the benefit and use of McHenry, and which, it was claimed, McHenry was bound to refund. On appeal by McHenry to the court of common pleas of Hamilton county, the two suits were consolidated, and a trial by jury having been waived, the case was tried by the court; and the court being requested to find the facts and the law of the case separately, found the following facts from the evidence:
“ First — That on the 11th day of April, 1867, the executors of the last will and testament of N. Longworth, deceased, executed a perpetual lease of certain premises for a period of ninety-nine (99) years, renewable forever, with privilege of purchase, to the said plaintiff and defendant jointly, the said-executors not having the title to said premises, but were acting under a mere power granted by the will of said Longworth, the said Carson and McHenry covenanting therein that they, their heirs and assigns, would pay all taxes and assessments on the premises and a yearly ground rent of $2,500, payable -quarter-yearty, the same to be a lien prior to all others on the premises.
'■'■Second — That on the 18th day of June, 1868, the said E. T. Carson conveyed to the said John McHenry, by ordinary deed poll, with covenants of general warranty, all his undivided interest in said perpetual leasehold, and gave to the said McHenry the exclusive possession of said premises, which he has since held.
“ Third — That on the 1st day of October, 1874, the heirs of Nicholas Longworth, by virtue of the devise to them by said will of said premises, conveyed and transferred to Catharine L. Anderson said premises, the said conveyance containing the following reference to said lease .among others,'to-wit: ‘ Subject to each and all of the above recited leases, the grantee herein taking the place of the lessors therein, as to the rights and rents reserved to and the covenants entered into by them in said leases respectively, either in whole or to the extent of and in proportion to the interest hereby conveyed.’
“Fourth — That on February 7th, 1879, the said John McHenry, having from time to time paid rent to the said, executors, and afterward to the said Anderson, in full up to January 10th, 1876, but being then largely in default for rent, to-wit — in the sum of $8,125 including interest — the said Anderson brought suit against the said McHenry and Carson jointly, for said sum on the covenants to pay rent contained in said original lease, said claim having all accrued since said transfer by Carson to McHenry, and said McHenry still remaining in possession as the assignee of said lease, and said sum of $8,125 being then due from McHenry for rent under said lease.
‘•'•Fifth — That pending said suit, the said McHenry being in default for answer, and the said Carson having filed an answer denying all liability for said rent, the said Catharine L. Anderson negotiated and executed, on the 10th of June, 1879, without any arrangement with the said McHenry on her part, or between him and the said Carson in regard to his, the said McHenry’s liability, and without any request from him upon the said Carson, a release to the said Carson of all liability under or upon the covenants of said lease, for the sum of $500 by him paid, a copy of which release is as follows, to-wit: In consideration of the sum of five' hundred ($500) dollars paid by Enoch T. Carson, the receipt whereof is hereby acknowledged, we do hereby release and discharge the said Enoch T. Carson, his heirs and assigns, from all and any liability arising on or growing out of a certain perpetual lease executed on the eleventh day of April, 1869, between Joseph Longworthand Larz Anderson, as executors of the last will and testament of Nicholas Long-worth, deceased, as lessors, and John McHenry and Enoch T. Carson, as lessees; said lease being of the following described premises in the city of Cincinnati, county of Hamilton and state of Ohio, on the east side of Main street, north of Fourth street, and tying next south of the north line of lot number eighty-nine, thirty-two feet in front and running back the same width to the depth of ninety-nine feet, and we do hereby release and forever discharge the said Enoch T. Carson, his heirs and assigns, from all and any covenants in said lease, and from all the obligations thereof, this being in full and final settlement, and compromise of all claims on said lease.
“Sixth — That, thereafter before the beginning of these suits, she, the said Catharine L. Anderson, for the sum of $1,200, paid her by the said McHenry, and the surrender by him of said leasehold, with valuable improvements thereon, made by the lessees Carson and McHenry, released him from liability under or upon the covenants of said lease, or by reason of his occupancy of said premises, and accepted a surrender of said lease and dismissed said suit.
“And as a conclusion of law, the court finds that the said plaintiff is entitled to recover of the defendant the sum of $500, as money paid for and on his account, upon an implied promise to reimburse him therefor, with interest thereon, together with costs herein.”
Upon this finding of facts and law, judgment was rendered against McHenry for the amount claimed with interest, to which he excepted. The case was thereupon taken to the district court, and a reversal was sought on the ground, that the court’s conclusion of law upon the facts found was erroneous. The district court found that the case involved important and difficult questions of law, and reserved it to this court for determination.
Me Guffey Morrill, for plaintiff in error.
I. The theory on which the suits below were prosecuted, was that Carson had compromised, or paid a claim in part, for another, which he, Carson, was compellable to pay, and that therefore he was entitled to reimbursement from such other party.
I. The claim which Carson so compromised or paid was not enforceable against him in favor of Mrs. Anderson.
This presents the question whether after an unconditional assignment by the lessee of a lease for ninety-nine years, renewable forever, such lessee is liable for future rent to the assignee of the reversion, such assignee having collected rent from such assignee of the lessee and recognized him as tenant.
In Worthington v. Hewes & McCann, 19 Ohio St., 66, the negative of this proposition is clearly held, and also, it is further held, “ that after an unconditional assignment by the lessee, he is not liable for future rents,” that is, he is not liable even to the original lessor.
So far as this case implies that such an assignment defeats any action in such case by the original lessor, it is overruled by the cases of Harmony Lodge v. White et al., 30 Ohio St., 569, and Taylor v. De Bus, 31 Id., 468, but no further.
This will appear from an examination of the facts of these cases, since in neither of them was the action brought by the assignee of the reversion.
On the other hand, the action in the case cited from the 19 Ohio St., was by the assignee of the reversion, and so much of that decision as is to the effect that such assignee cannot sue, stands as the law of Ohio.
In an action by the assignee of the reversion against the lessee after an assignment of his interest no recovery can be had upon his express covenants, there being no priority either of personal contract or of estate between the parties. Taylor v. De Bus, 31 Ohio St., 473, citing Crawford v. Chapman, 17 Ohio, 449; Sutliff v. Atwood, 15 Ohio St., 186.
In the case at bar there was no privity of estate between Mrs. Anderson and Carson. Privity of estate depends upon occupancy. Taylor on L. & T., § 436. Neither was there privity of contract, for Carson, before this rent accrued, had given exclusive possession to McHenry, and the party to the covenant made by Carson, had previously transferred the reversion.
Bd. It would seem, then, that the 19 Ohio St. ease is directly against a recovery in such a case as this. And that as bearing upon the question at issue, it has not been overruled.
II. But secondly, a more serious objection to recovery is this: that the payment relied upon, was not for the benefit of McHenry, nor did it operate to reduce his liability, but was simply a payment to secure the release of Carson as security for McHenry’s rent and from contingent liability for further rent for which McHenry was not then liable and for which he might never become liable.
1st. Assuming that Carson could be held at all for this rent, after an unconditional assignment of the lease to McHenry, his relation to the latter was simply that of a surety. Sutliff v. Atwood, 15 Ohio St., 186, 194.
As to the covenants to pay rent in the future, neither was liable, until the rent accrued. This liability at the time in question was wholly contingent as to both.
2d. If the payment was made simply to release Carson, it cannot be applied to the rent. Peer v. Keen, 14 Mich., 354.
In such event, it could not be treated as payment of rent for the use of McHenry.
Again, if paid to release McHenry’s as well as Carson’s contingent liability for future rent, certainly McHenry cannot be compelled to reimburse Carson, for nothing was due from McHenry in this behalf. And, moreover, any payment made by Carson for the release of his own future liability was purely voluntary; he not being compellable to such payment, until there was a default. Pond v. Warner, 2 Vt., 532.
3d. The only condition of things, then, under which this judgment can stand, is that this $500 was paid exclusively on account of the accrued rent in question.
Eor if any part of it was in* consideration of the release of future liability, then the judgment for the whole sum is erroneous, since as we have seen anything so paid was not for the use of McHenry.
But certainly, the facts as found do not show that the parties to this release, intended that this sum should apply exclusively to that rent.
Indeed we think they show the contrary. According to the sixth finding, the release was negotiated by Mrs. Anderson, without any arrangement with the said McHenry on her part, or between him and the said Carson in regard to his, the said McHenry’s liabilities, and without any request from him on the said Carson.
Again, no mention is made of the rent, or the suit therefor, in the instrument of pelease, and the gist of the instrument is the “ release and discharge forever ” of said Carson from the covenants of said lease, seeming to have exclusive reference to his individual liability. He alone was contesting the liability for rent set up in the suit, the other party being in default for answer, and we submit that the last clause of the instrument of release to the effect, that this is “in full and final settlement and compromise of all claims on said lease,” taken in connection with the whole instrument, shows that it had no reference to the liquidation of the rent, and that the parties studiously avoided all reference to the rent or to Mr. McHenry, in order that his liability for the entire rent might remain unimpaired in favor of Mrs. Anderson.
Matthews & Shoemaker, for defendant in error.
Is McHenry liable to Carson ?
If one pays a debt for which he is liable, but which as between him and another also liable, the latter ought to pay, he may.recover from the latter. Pownal v. Ferrand, 6 Bar. & Cr., 439; Exall v. Partridge, 8 Term. R., 308; Leake on. Contracts, 77-83 inc.; Burnett v. Lynch, 5 Bar. & Cr., 589; Willson v. Leonard, 3 Beav., 373; Moule v. Garrett, L. R. 7, Ex., 101; Johnson v. St. Packet Co. Id. 3 C. P., p. 45 ; Wharton on Contracts, §§ 759 to 771 inc.
This principle has been based on several grounds.
1st. Because the party paying, was, in the eye of the law, authorized to act for the party for whom the payment was made.
2d. When the plaintiff is compelled to pay the defendant’s debt in consequence of his omission to do so, the law infers that he requested the plaintiff to make the payment for him. Hogg v. Longstreth, 97 Pa. State, 255; England v. Marsden, L. R. 1 C. P., 529; Sapsford v. Fletcher, 4 Term R., 511; Leake on Contracts, 82; Platt on Leases, 428; Farrington v. Kimball, 126 Moss., 313.
The consideration for the payment of the $500 by Carson to Mrs. Anderson was the “ release and discharge of said Carson from all and any liability arising on or growing out of a certain lease,” etc. The only liability at that time arising on or growing out of said lease was the past due rent. Mr. Carson was called upon to pay this by reason of the failure of McHenry to pay it. As a separate matter, by said document Carson was released from the obligations of said lease.
It is claimed, that, because Carson was released the payment was made for that purpose alone, and therefore was not the payment of any part of McHenry’s debt, and hence Carson cannot recover in these actions. In other words, if Mr. Carson had paid $8,125, and declined to be released, then he could recover, but not if he paid $500 and accepted a release. But the record shows a different state of facts. It shows that the money was paid for discharge from an existing liability, in other words, a part payment of the rent due. Within a few days thereafter McHenry paid only $1,200, and was also discharged.
The mistake made by counsel for plaintiff in error is in supposing that we must necessarily ground our right to recover on the payment of McHenry’s debt. I contend that Carson did pay a part of his debt, but even if that is not so, he is entitled to recover his damages that arose from McHenry’s wrongful act or breach of contract, by whatever name it may be designated. Leake on Contracts, 74.
Carson was in one sense a surety, but as to the lessor he was an original debtor. Between him and McHenry he was a surety. When Carson, the surety, pays to Anderson, the original creditor, money which McHenry, the principal debtor ought to have paid, then Carson, the surety, can recover the amount which McHenry’s default has compelled him to pay. Pownal v. Ferrand, supra.
McHenry’s implied indemnity extended to the covenants of the lease. What right has he to complain that Carson obtained a release when that was only another way of accomplishing what McHenry had agreed should be accomplished when he accepted the conveyance from Carson, to wit: that the person who occupied and enjoyed the property should perform the covenants ? And even if McHenry could shift the burden by assigning over he never could shift it back to Carson, but would have to shift it on to somebody else who would be his own grantee, and would have'to in like manner indemnify Carson through McHenry. Of course, if McHenry had kept his covenants, whether Carson could charge him with the price of a mere release is another question, but when an immense sum of $8,125 has been piled up against, Carson, it would be strange if he could not protect himself from McHenry’s gross breach' of contract, and accept a release from an obligation which bid fair by reason of such breach to ruin him. Mrs. Anderson was suing for rent, the payment was in compromise of that suit, and accordingly when Carson paid $500 and McHenry $1,200 a few days afterwards, the suit was dismissed.

Opinion:
Dickman, J.
The assignment by a lessee of all his rights and interests in the premises, without his lessor's consent, will not thereby discharge him from his express obligations, and he will therefore remain liable upon his original contract after his assignment. But, as his liability thus remains, he is entitled to be indemnified by his assignee, against the payment of rent during the continuance of such assignee's term. While in the possession of the estate, and enjoying the benefit of the lease, there is an implied promise on the part of the assignee that he will also take the burden from his assignor and indemnify him against the claims of the lessor, while he holds under the assignment. Patten v. Deshon, 1 Gray, 330 ; Farrington v. Kimball, 126 Mass., 313; Moule v. Garrett, L. R. 5 Exch., 132 (S. C. L. R. 7 Exch. Ch., 101;) Burnett v. Lynch, 5 Bar. & Cr., 589. Nor is this principle inapplicable where one of two joint lessees assigns to the other all his interest in the lease. It is stated by Mr. Justice Willes, in Moule v. Garrett, supra, 7 Exch. Ch., 104, in expressing his concurrence in the decision on an appeal in that case, that where á party is liable at law by immediate privity of contract, which contract also confers a benefit, and the obligation of the contract is common to him and to the defendant, but the whole benefit of the contract is taken by the defendant, the former is entitled to be indemnified by the latter in respect of the performance of the obligation.
The record shows, that in June, 1868, Carson conveyed to McHenry all his undivided interest in the perpetual leasehold, and gave to him the exclusive possession of the premises. McHenry paid in full, from time to time, up to January, 1876, all the rent accruing after such conveyance, but in February, 1879, being in default of rent then due, to wit, in the sum of $8125, including interest, the assignee of the reversion, Mrs. Anderson, brought suit for that sum against McHenry and Carson jointty, on the covenants for rent contained in the original lease.
Carson did not cease to be an original debtor to the lessors, for rent that had accrued after his making the conveyance to his joint lessee. But, as between himself and McHenry, he was a surety, and upon payment to the lessors of any portion of such rent, he had his remedy over against McHenry as principal, to be reimbursed. Wolveridge v. Steward, 1 Cr. & M., 644, 660. See also the opinion of Baron Parke in Humble v. Langston, 7 M. & W., 517, 530.
If however in the suit brought by Mrs. Anderson, any sum of money was paid her by Carson — not to be released from the claim for rent already due, the only matter in litigation, but to be discharged from a future contingent liability for rent under the lease — no action would be maintainable by Carson against McHenry to recover that sum so paid by him. Apart from the rent which had accrued, there was then no indebtedness from McHenry to the assignee of the reversión, nor was Carson indebted to her, or under any legal obligation to pay her anything under the lease. When a surety pays the creditor's claim, he must be legally bound for it, to enable him to recover the amount paid, of the principal. And it must also appear, that at the time of the payment, the principal himself was under a legal obligation to pay. The surety cannot, by a voluntary payment, when not legally bound, place himself in a better position towards the principal, than that of one not a surety, who voluntarily pays money in the discharge of the debt of another person; and cannot by such voluntary payment, impose upon the principal an obligation which he was not under at the time of the payment. Hollinsbee v. Ritchey, 49 Ind., 261.
The release executed bj" Mrs. Anderson shows, that in consideration of the sum paid by Carson, she designed to discharge him, not simply from existing liability, but from all liability that might arise in the future under the lease. It evidently was not intended, that the consideration of the release should extend merely to the rent past due, while the release from all future liability was to be treated as a distinct matter, supported by no consideration whatever. The releasor in unequivocal language says, " In consideration of the sum of five hundred dollars paid by Enoch T. Carson, we do hereby release and discharge said Carson, his heirs and assigns, from all and any liablity arising on or growing out of a certain perpetual lease, etc., and we do hereby release and forever discharge the said Carson, his heirs and assigns, from all and any covenants in said lease, and from all the obligations thereof, this being in full and final settlement, and compromise of all claims on said lease." Though the releasor "negotiated and executed the release pending the suit," it is quite evident, that the consideration of the release refers, not merely to the subject-matter of the action — an existing liability — but also to all possible claims, that might thereafter be made upon Carson, under the covenants of the lease.
What portion of the five hundred dollars paid by Carson, may have been designed by Mrs. Anderson, to be applied in reduction of the large arrears of rent which had been allowed to accumulate, does not appear; nor, have we any basis upon which we can apportion that amount, to the discharge of present and future contingent liability. It would seem to have been deemed all important to Carson,-in his negotiation for a release, to rid himself of the heavy burden of future liability under his covenants, as the rent which had already accrued might be considered as provided for without recourse to him, by reason of its having been made a lien, prior to all others, on the valuable improvements placed on the premises by the lessees.
As to McHenry, we fail to discover, that in his settlement with Mrs. Anderson, he ever got any benefit from Carson's payment of the five hundred dollars. We find no evidence that the sum paid to her by Carson ever entered into the estimate, in fixing the amount that was paid by McHenry, upon her dismissing her suit and receiving a surrender of the leasehold. The court below found the fact to be, that she executed the release to Carson without any arrangement on her part with McHenry, or between him and Carson in regard to his, McHenry's, liability, and without any request from him upon Carson. McHenry being in default of answer. in the suit instituted by Mrs. Anderson, her dealings with Carson, from aught that appears, bore no reference to his co-defendant. The subsequent arrangement with McHenry, by which, for the sum of $1,200 paid by him and his surrender of the leasehold, he was released from liability under the covenants of the lease, and the pending suit dismissed, is not shown to have been influenced by the previous transaction with Carson.
The judgment rendered in favor of Carson was doubtless upon the ground that the entire sum of $500 was paid by him to Mrs. Anderson, and by her applied in discharge of a claim for rent that had already fallen due, and which it devolved upon McHenry to pay after the assignment to him of the lease. In our view of the special finding of facts by the court, they do not furnish such a presumption, that the above-named sum was paid and applied on accrued 'rent alone and not in discharge of future liability under the lease, as would entitle Carson to recover such sum of McHenry, as money paid on his account, upon an implied promise to reimburse Carson therefor. Nor, do we think, that the burden rests upon McHenry to prove that such sum was not applied on the rent.
The special finding of facts by the court of common pleas is not before us for review, it not appearing from the record that a motion for a new trial was made on the ground that the finding of the court was against the evidence and that such motion was overruled. Westfall v. Dungan, 14 Ohio St., 276. But such motion for a new trial is not necessary in order that conclusions of law arising upon the facts, may be made subject to review on error. Lockwood v. Krum, 34 Ohio St., 1. The case at bar is not one in which the record discloses that certain evidence was found tending to prove facts, without any finding upon the facts themselves; but there was a special finding of facts from the evidence, which raised a question of law as to the judgment to be rendered. Leach v. Church, 10 Ohio St., 148. The record does not contain the evidence, and as said by Okey, J., in Springer v. Avondale, 35 Ohio St., 624, " There is a presumption that no evidence was offered, from which any other material fact could be found than those set forth in such finding."
There having been no exception to the finding of facts, the only question for determination is as to the sufficiency of the facts found to warrant the legal deduction therefrom in favor of the defendant in error. The parties by their action having acquiesced in the facts as found, a question of law only is left for decision; and, we are of opinion, that as a conclusion of law from the special finding of facts, the plaintiff in error, McHemy, was not bound by an implied promise to reimburse Carson the sum paid by him to Mrs. Anderson. The judgment rendered by the court of common pleas is not sustained, we think, by the facts found, and should be reversed, with judgment for the plaintiff in error.
Judgment accordingly.