Court Opinion

ID: 8193166
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:16:17.483838+00
Date Added: 2024-06-11T16:40:40.478460
License: Public Domain

Oweñ, J.
(dissenting). The majority opinion construes the language upon which the liability of the Pabst Brewing Company is predicated as ah obligation in the-nature of an original undertaking on its part to pay the rent of Weber & Stuber from the date of the assignment of the. lease. With this construction I cannot agree.
A consideration of the setting in which this agreement is-found, the transaction of which it forms a part, the relation of the parties and their subsequent dealings, conclusively demonstrates to my mind that no such result was intended to' be accomplished. ' - !
In 1915 the plaintiff exécuted to Weber & Stuber a new lease, running for ten years, by the terms'of which the latter agreed to make certain'improvements upon the premises. It transpired tha;t these improvements would be- much-more expensive than was contemplated, and it was necessary for Weber & Stuber to make financial arrangements'iri order to comply with this provision of the lease. They appealed to the Pabst' Brezving Company. That company-agreed to advance to them in the neighborhood of $20,000'.-This sum was to be repaid in the nature of an excess charge on each barrel of beer supplied to Weber & Stuber by the Pabst Brewing Company. As a matter of security Weber & *218Stuber executed to the Pabst Brewing Company an assignment of the lease executed to them by the plaintiff, providing that upon default the Pabst Brezving Company might take possession of the premises. It was not an assignment in prcesenti. It was a conditional assignment merely, for the purposes of security, and so long as Weber & Stuber performed their contract with the Pabst Brezving■ Company that company acquired no right to the possession of the premises under the assignment. It was provided in and by the terms of the original lease that it should not be assigned without the consent of the lessor. The written assignment showed plainly upon its face that it was executed by Weber & Stuber to the Pabst Brewing Company for the purposes of security merely, and that unless a breach occurred on the part of Weber & Stuber the right of possession on the part of the Pabst Brezving Company would never arise. This assignment executed by Weber & Stuber was taken to the plaintiff with a request that it consent thereto. As a condition to its consent the plaintiff required the Pabst Brezving Company to sign an agreement at the foot of Weber & Stuber’s signature, in the following language: “The said Pabst Brezving Company hereby agrees to perform all- the terms, covenants, conditions, and agreements of said lease to be performed by the said lessees therein.” Thereupon it appended its written consent to the assignment of the lease at the foot of such agreement.
The question is, What was the nature of the obligation assumed by the Pabst Brewing Company under said agreement? The lower court, and the majority opinion here, holds that the Pabst Brezving Company obligated itself to pay all rent arising under the terms of the lease from that date. That such was the intention of the parties is rendered doubtful by the fact that Weber & Stuber continued in the possession of the premises and continued to be liable to the plaintiff under the terms of the original lease signed by them. Plainly it was not the intention of the parties to sub*219stitute the Pabst Brewing Company for Weber & Stuber as the primary obligors upon the lease. They not only continued in possession, but the plaintiff continued to look to them for the payment of the rent. If the construction of the court be correct, we have the very novel and extraordinary circumstance of two parties being primarily liable in the absence of any joint, or joint and several, undertaking. It is not intended to intimate that such a circumstance could not arise, but the very extraordinary character of the situation is in and of itself a strong circumstance to negative such an intent on the part of the parties.
The majority opinion suggests that while the plaintiff relied upon the financial responsibility of Weber & Stuber in making the lease, the fact that they found it necessary to make financial arrangements in order to raise the money for the improvements might have shaken the confidence of the plaintiff in their'financial responsibility, and when presented with the written assignment of the lease it seized the opportunity to obtain security for the payment of the rent. If this were the intention of the parties, it is submitted that the language employed was poorly adapted for the accomplishment of such purpose and not such language as is ordinarily used under such circumstances. If it were the intention of the parties that Weber & Stuber should continue in the possession of the premises, retain their contractual obligations with the plaintiff, and it should look to them primarily for the payment of the rent, resorting to the Pabst Brezving Company therefor only upon default of Weber & Stuber, then the intention of the parties was that the Pabst Brezving Company should become guarantor of the rent, and this agreement, ordinarily, would have been expressed in the usual and ordinary terms of a guaranty, and the liability of the Pabst Brezving Company would be but secondary, so to speak. It is conceded, however, on the part of every one that the liability of the Pabst Brezving Company is primary and not secondary. The fact that the agreement was not *220in the form of a guaranty; to my mind conclusively negatives the idea-that it was the intention of the parties, or any of them, that the Pabst Brewing.Company should become ■liable for Wéber & Stuber’s rent, or that it assumed any liability whatever under the terms of the lease' so long as Weber & Stuber remained in the possession of the premises.
But the question persists, What was the purpose of the agreement?. It is- submitted that the agreement is one which ordinary care and prudence would prompt the plaint- ' iff -to demand if the assignment were to take immediate effect, for the reason that it is well settled that the assignee of a lease assumes only such, liabilities and responsibilities as .arise from the privity of estate growing out of possession. 24 Cyc. 982; Bell v. American Protective League, 163 Mass. 558, 40 N. E. 857; Consolidated Coal Co. v. Peers, 166 Ill. 361, 46 N. E. 1105; Durand v. Curtis, 57 N. Y. 7, 11; Consumers’ Ice Co. v. William H. H. Bixler & Co. 84 Md. 437, 35 Atl. 1086; Washington N. G. Co. v. Johnson, 123 Pa. St. 576, 16 Atl. 799; Peck v. Christman, 94 Ill. App. 435; Kribbs v. Alford, 120 N. Y. 519, 24 N. E. 811; Dolph v. White, 12 N. Y. 296. For instance, the as-signee of a lease whose liability is that arising from a mere privity of estate may assign the lease to a beggar and thereby escape further liability for the payment of rent. There are numerou’s covenants in the lease from the Camp Company to Weber & Stuber which are clearly personal covenants and do not run with 'the land. For example,' the covenant prohibiting gambling on the premises or their use for other illicit or illegal purposes, or for purposes which would make the premises extrahazardous in the opinion of the superintendent of the Milwaukee board of fire underwriters ; the covenants in regard to .cleaning streets, alleys, and sidewalks in front of and around the premises, and to obey any and all lawful orders, rules, and regulations of any state or municipal officers, boards, or commissions having authority in the premises affecting the demised prop*221erty; that no unsightly signs and no. advertising matter shall be placed by them (the lessees) on the outside, of the demised premises, as well as the covenant that the lessees will •not sublet said premises or assign the lease for any purposes .whatsoever without the consent of the lessor in writing. These are all personal covenants. None of them run .with the land, and in order to create a;duty on the part of the as-signee of the lease to comply with these terms therein, just such a provisiop as was signed by the Brezving Company was necessary. As above stated, it is just such a provision as care and prudence would require if the assignment of the lease were to take effect immediately, to .the end .that the assignee of the lease would be bound by each and every provision thereof.
Is there- any reason to believe that the parties had any other or different purpose in mind simply because the assignment was given by Weber & Stuber to the .Brezving Company as security for the performance of a collateral contract and the resulting fact that the Brezving Company might :never come into possession of the premises? I am frank to say that I can see no reason for such a conclusion, when we concede, as it seems to me must .be conceded,, that the .agreement upon which the liability of the Brezving Company is predicated is a natural and prudent condition to the consent of the assignment of the lease under any form. To my mind the conclusion is inevitable that the liability assumed by the Brezving Company was one to arise when and only when it came into possession of the demised premises under and by virtue of the assignment of the lease, and ' that until then there was no liability on the part of the Brezving Company whatever. • The subsequent dealings of .the parties are consistent with this view. The Camp Company continued to collect rent from Weber & Stuber and said nothing to the Brezving Company with reference thereto, except upon one occasion, when Weber & Stuber were in default for the payment of taxes for thirty days and'were *222in arrears for two months’ rent. The Camp Company then (March 2, 1916) wrote to the Brewing Company calling its attention to the arrearages. While it may be inferred from the letter of the Camp Company that it looked to the Brezv-ing Company for the payment of these arrearages by virtue •of the agreement under consideration, the Brewing Company certainly did nothing that can be construed as assenting to such view. On March 11th the Brezving Company replied to the letter, saying they had had an interview with Weber .& Stuber and had agreed to assist them in installing a bookkeeping system and that Weber & Stuber had agreed to make arrangements for the payment of the taxes and back rent and trusted that the Camp Company would be able to make a satisfactory adjustment with them. There is nothing in this letter which acknowledges responsibility on the part of the Brezving Company for the rent or taxes then due. The interest of the Pabst Brewing Company in the ■matter is not at all surprising. It was interested in Weber & Stuber to the amount of $20,000 and was interested in their continuance as a going concern. It was but natural that it should exercise its good offices in urging Weber & Stuber to continue .the lease. Its conduct at that time amounted to nothing more than that of a friendly, though perhaps interested, mediator, and fell far short of a recognition of its liability under the terms of the agreement.
If it had been the purpose of the parties to impose an immediate liability upon the Brewing Company, such liability could have been made to appear in much less equivocal language. The agreement was phrased by an able practitioner in this court, from whom we do not expect such ambiguity of expression as will conceal its real purpose from all but a bare majority of the members of this court. I submit that the language in the setting in which it is found, inserted under the* circumstances as they existed, was appropriate to impose upon the Brewing Company the liability herein ascribed to it, but that it is extraordinary and inappropriate *223language to create the liability imposed by the majority opinion.
I j*m authorized to state that Mr. Justice Siebecker and Mr. Justice Esci-iweiler concur in the foregoing dissenting opinion.
. A motion for a rehearing was denied, with $25 costs, on September 25, 1920.