Court Opinion

ID: 9551341
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:51:49.758858+00
Date Added: 2024-06-11T15:23:35.475077
License: Public Domain

ELLETT, Justice
(dissenting) :
I dissent. The first case cited in the main opinion (Geo. Benz & Sons v. Willar, 198 Minn. 311, 269 N.W. 840, 109 A.L.R. 443) held that foreclosure of a mortgage terminated the lease of defendants (who held as tenants under the mortgagor) and that “Defendants thereafter remaining in possession were trespassers, or, at best, tenants at will or at sufferance and could have been ejected.” In the instant case if the defendant is a trespasser, he has no rights whatsoever; and if he is a tenant at will or at sufferance, his lease with his landlord (the conditional purchaser) is not to be converted into any instrument of validity binding on the true owner who has heretofore terminated any and all rights which the conditional purchaser may have had in the property. Until this defendant enters into some valid contract with the plaintiffs, the relationship continues to be that of trespasser, or, as said above, tenant at will or at sufferance.
In the contract of sale, Berry promised that he would not lease the property without the consent of the plaintiffs. He did lease to Conley without any consent ever being had from plaintiffs, either orally or in writing. This is but another reason why Conley has no standing to assert a five-year lease against the plaintiffs.
The main opinion cites 3 Thompson on Real Property (1959 Replacement) § 1078, pp. 285-286, but does not underscore the lines that seem important to me, to wit: “The mortgagee may treat a lessee holding under a lease from the mortgagor as a trespasser, and eject him; * * *” The fact that the mortgagee cannot distrain or bring an action for rent is immaterial.
The main opinion seems to indicate that by demanding payment of rent due, the plaintiffs recognized the existence of the long-term lease.
The general law is set forth in 36 Am. Jur., Mortgages, § 283- as follows:
A mortgagee entitled to the possession of the mortgaged premises may elect to recognize a lessee, under a lease made by the mortgagor subsequent to the mortgage, as his tenant. The question whether there has been a recognition by the mortgagee of the lessee as his tenant is one of fact for the jury on evidence of the conduct of the mortgagee. The single act of demanding rent of the lessee is apparently not sufficient for that purpose; something further clearly indicative of an intention to establish the relation of landlord and tenant is *209required. Generally, the effect of the recognition when established is not to confirm the lease granted by the mortgagor, but to create a new tenancy from year to year between the mortgagee and the lessee. A special agreement would ordinarily be required to make valid and to effectuate the extension of a lease executed by the mortgagor, although a different rule might obtain under particular circumstances operating as an es-toppel of the mortgagee from contesting the rights of the lessee under the lease. [Emphasis added.]
The main opinion also hints that there may be an estoppel by reason of the plaintiffs’ allowing the defendant to cover the land with a thick coating of asphalt or other similar paving material. However, there can be no estoppel unless the plaintiffs did something to induce the defendant to expend money which he otherwise would not have done or unless they failed to speak up when they had a duty to speak. As was said in the case of Utah Savings and Loan Association v. Mecham, 12 Utah 2d 335, 366 P.2d 598, 15 A.L.R.3d 63:
However, in order to establish an es-toppel against a mortgagee, the lien claimant must show some concealment, misrepresentation, act, or declaration by the mortgagee upon which the lienholder properly relied and by which he was induced to act differently than he would otherwise have acted.
In the instant case, the plaintiffs had sold the land to one Berry and his wife, and the contract so far as the record reveals was in good standing at the time the ground was paved. The plaintiffs owed no duty to the defendant to tell him that in case Mr. Berry failed to make payments, the expenditure being made by the defendant might go for naught. In fact, it was none of plaintiffs’ business unless the so-called improvement might be considered as damaging to the possible reversionary interests of plaintiffs. In such case the plaintiffs might be estopped to claim damages if they knew what was going on and failed to object thereto at the time. However, plaintiffs make no claim for any damages in that regard, and so there is no basis for thinking that any estoppel exists. Besides this, estoppel is a defense which must be set forth affirmatively in the pleadings in order to be availed of. Rule 8(c), U.R.C.P. The defense was not raised by the pleadings, and it is not proper for us to consider it here.
The defendant does not claim that he is a tenant at will of the plaintiffs, but he insists that his five-year lease with Berry is binding upon these plaintiffs. I think the trial court was correct in holding that the interest of the defendant was terminated when the interest of his landlord, Berry, was terminated, and under no theory of the law and the facts as set forth before the court in the motion for summary judgment *210'could Conley’s lease be foisted upon the .plaintiffs.
In his affidavit Conley says that he was told “in effect” that his lease would be honored if he paid his rent. He does not say that he was told by the plaintiffs nor, in fact, by whom he was told. Even if he had been told by the plaintiffs, this at best would only make him a tenant at will.
I would affirm the judgment, with costs to the plaintiffs.
CROCKETT, C. J., concurs in the dissenting opinion of Mr. Justice EELETT.