Court Opinion

ID: 6735102
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:17:41.228565+00
Date Added: 2024-06-11T16:01:44.769239
License: Public Domain

Bartholomew, C. J.
I fully concur in the opinion prepared by Justice Young. But deeming the question involved to be of great practical importance, and conceiving that much misapprehension prevails in the minds of the profession as well as the laity as to the exact condition of the law upon the question in this state, I wish, in concurring, to add a few thoughts to what my associate has said. A restatement of the facts is unnecessary. It is important, I think, to determine as nearly as may be the exact nature of the contract entered into between Ditton, the mortgagor, and the man Filson. If Filson was simply hired by Ditton to raise a crop upon the land, and was to receive as compensation for his labor in so doing a certain share of the crop produced, and if that be the entire scope of the contract, then, of course, Filson had no interest in the land. Ditton was the real party in possession during the year of redemption, and the plaintiff, the purchaser at the foreclosure sale, could recover nothing, as against him, as rent, as that word is used in the statute, because no rent had ever been agreed upon, and the owner, as tenant in possession, would be liable only for “the value of the use and occupation thereof,” and the purchaser could claim title to no specific property as representing such value, and this action must fail. The result will be different if the contract made Filson the tenant in possession. I am clear that such was the intent, purpose, and effect of the contract. The form of contract used in this case is quite common in this stace. It starts out by declaring: “Witnessetlx, that the party of the first part (Filson) hereby agrees to and with the party of the second part (Ditton), for the consideration hereinafter named, to well and faithfully till and farm, during the season of farming in the year 1898, commencing April xst, 1898, and ending April 1st, 1899, in a good and husbandlike manner, and according to the usual course of husbandry, the following described premises.” Then follow certain details of reciprocal obligations, and the contract continues: “And, until all the covenants and agreements to be performed by the party of the first part shall have been fulfilled, the title and possession of all hay, grain, crops, produce, stock, increase, income, and products raised, grown, or produced on said premises shall be and remain in the party of the second part, and said party of the second part has the right to take and hold enough *230of the crops, stock, increase, income, products, that would by the division belong to said party of the first part to repay any and all advances made to him by the party of the second part, and interest thereon at 8 per cent, per annum, and also to pay all indebtedness due said party of the second part by said party of the first part, if any there be.” The evident intent of this contract was to deprive the tenant of that which under an unrestricted lease would be his, i. e. the title to the crops produced by himself upon the land, and to vest such title in the landlord. The object of this is two-fold: First, it secures the rent in a state where landlords’ liens are unknown; and, second, it secures all advances which the landlord may make to the tenant for seed grain, supplies, hired help, etc. It is of great advantage to the landlord; and in Angell v. Egger, 6 N. D. 391, 71 N. W. Rep. 547, this court said that the tenant might make such a contract, and yet the instrument remain a lease, and the relations of landlord and tenant exist. If It were the intention of the parties that Filson should have the possession and use of the land, he then by the contract acquired an interest in the,land; and if the amount of the crop that should ultimately belong to Ditton, irrespective of any advances or indebtedness, was so reserved as rent, then the contract was a technical lease. It is clear to me that Filson was to possess, control, and use the land. By the contract he covenants “to commit no waste or damage on said real estate, and to suffer none to be done.” This latter covenant would be impossible of performance if he had not exclusive control. Again: “It is also agreed that, in case said party of the first part (Filson) fails to perform any of the conditions and terms of this contract on his part to be done and performed, then said party of the second part (Ditton) is hereby authorized and empowered to enter upon said premises and take full and absolute control of the same.” This is the usual' provision for re-entry by the landlord, and can have no force unless the tenant is in possession in his own right. Again: “This contract shall not be assignable or sublet by the party of the first part without the consent of the party of the second part.” It could not be “sublet” by Filson unless it had previously been “let” to him. If it had been let to him, what he paid therefor was rent, and the contract is a lease, notwithstanding the fact that some of its provisions, standing alone, might import the contrary. , Said the court in Walls v. Preston, 25 Cal. 60: “The character of the instrument must be determined upon the consideration of all its terms and provisions, and the court will give it such a construction as will carry into effect the intention of the parties, without regard to the technical terms emplo)red. Although words are used which, if disconnected from other parts of the instrument, would import a lease, the}»' will not be so construed if the evident intention was merely to make a cropping contract. Nor, on the other hand, will the instrument be so construed as to deprive the occupant of the position of a tenant of the land, if from the whole instrument it is *231apparent that the parties intended he should enjoy the .exclusive possession of the premises.” See, also, Townsend v. Isenberger, 45 Ia. 670; Chandler v. Thurston, 10 Pick. 205; Walker v. Fitts, 24 Pick. 191. In 12 Am. & Eng. Enc. L. 977, it is said: “No particular form of expression or technical words are necessary to constitute a lease, but whatever expressions explain the intention of the parties to be that one shall devest himself of the possession of his property, and the other shall take it, for a certain space of time, are sufficient, and will amount to a lease for years, as effectually as if the most proper and permanent form of words had been made use of for that purpose.” I am aware that some courts, while not holding that contracts of this character are not leases, have yet preferred to designate them as contracts of adventure. Taylor v. Bradley, 39 N. Y. 129; Bowers v. Graves (S. D.) 66 N. W. Rep. 931. But see the remarks of Woodruff,. J., in Taylor v. Bradley, as to what would be the holding in New York were the question new there, as it is here. In all cases of leasing of realty for farming or commercial purposes, it is a contract of adventure, so far as the lessee is concerned. In this case there is the added uncertainty as to the value of what is to be paid for rent. But that always happens when the rent is payable in kind. When the cases speak of certainty as to the rent, they mean simply that the contract must determine what the rent is to be, and not its value. If to be paid in a share of the crop, the contract must determine what share. I do not think that the fact that the owner of the land was in this case to hold the title to the crop destroys the contract as a lease. Rather, to my mind, it has the opposite effect. The express provision was inserted because the parties understood that if it was not inserted the title would be in the lessee, and, as stated, it was inserted as security, and to that extent the provision is in the nature of a mortgage. But it is certain that the owner intended by the contract to dispossess himself and place the tenant in possession, and that, too, not merely for the time necessary to produce a crop, but for a year certain; and during the entire term, if the tenant performed his covenants, any interference with his possession by the owner would have been a trespass. Among the results that follow at common law if the contract be considered as a lease is the fact that a conveyance of the reversion carries with it all rents under the lease which have not already become due, and ripened into a right of action for money in the hands of the lessor. In Wood, Landl. & Ten. 722, it is said: “A sale of the reversion carries with it, unless expressly reserved, all rents and rights under a lease previously granted that subsequently became due, and the grantee may recover them in an action in his own name. Upon such conveyance the grantee takes the place and assumes the rights and liabilities of the original landlord. In other words, he becomes landlord as fully as though the lease had been made by himself, whether he knew all the terms of the lease or not.” In Townsend v. Isenberger, supra, *232it is said, “Rent reserved by lease, and not accrued, passes by a conveyance of land to the grantee;” citing Abercrombie v. Redpath, 1 Ia. III, and Van Driel v. Rosierz, 26 Ia. 575. Again: “A purchaser under an execution sale is entitled to the rent accruing or falling due after the execution of the sheriff’s deedciting Bank v. Wise, 3 Watts, 394; Martin v. Martin, 7 Md. 368. Where rent is payable at stated periods, as quarterly or yearly, it will not be apportioned, in the absence of an express reservation. The party holding the reversion when the rent falls due is entitled to the whole thereof. In Bank v. Wise, supra, the premises were rented for an annual rental of $425, payable half-yearly. Fourteen days before a half year’s rent becamé payable, the premises were sold under execution. The court said: “The idea of apportioning the rent that becomes payable after the purchaser of the reversionary interest in fee at a sheriff’s sale has paid the purchase money and received-his deed of conveyance for it, between him and the defendant in the execution, as whose estate it was sold, is unknown to the law, and cannot be reconciled with any of its analogous and fixed principles.” And in a contest between the landlord and the purchaser the latter was allowed to recover the entire half year’s rent, although he purchased the property only 14 days prior to the expiration of the half year. This case was. expressly approved in Burns v. Cooper, 31 Pa. St. 426. This was also a case of judicial sale, where the rent was a share of the crop, and the court said: “The rent (i. e. one-half of the grain) was not payable until the crop should ripen and be harvested. If the reversion did not pass to Cooper until the 1st of April, 1856, it still passed before the rent became payable; and the principle is that rent is incident to the reversion until it becomes both debitum et solvendum. Until then it passes with the land to the heir, devisee, or purchaser, and not until then does it become personal and go to the executor. Until then it is no debt.” Dixon v. Niccolls, 39 Ill. 372, was a case where farm lands were leased for a share of the crop, to be delivered when the crop was threshed. The farm was sold without reservation on October 1st of the year for which the farm was leased. At that time the crop was cut and stacked on the premises. It was threshed on October 24th. The court held the purchaser entitled^ to the entire rent. See, also, Montague v. Gay, 17 Mass. 439. To the several California cases cited in the main opinion as holding that the foreclosure sale operates as a conveyance to the purchaser at such sale of the entire beneficial interest of the owner, save the right of redemption, and the bare right of possession during the redemption period, the following cases may be added: Harris v. Reynolds, 13 Cal. 515; Shores v. River Co., 21 Cal. 135; Henry v. Everts, 30 Cal. 425; Robinson v. Thornton, 102 Cal. 680, 34 Pac. Rep. 120; Duff v. Randall, 48 Pac. Rep. 66.
I cite the foregoing authorities, not to establish the elementary principle that a voluntary conveyance of leased premises operates *233as an assignment of the lease, and conveys to the purchaser full right to collect rent thereunder, but to show that such conveyance assigns to the purchaser the right and title to all rents not then due by the terms of the lease, however much they may be earned, and to show that the same principles apply to judicial or foreclosure sales. True, many of the cases speak of the payment of the purchase money and receipt of sheriff’s deed as entitling the purchaser to the rents, but those cases were sales where no provision was made for redemption. The California cases deal with sheriff’s certificates, and apply the same rule as in cases of deeds. Certainly nothing less can be insisted upon under our statute. Section 5538, Rev. Codes, declares, “Upon a sale of real property the purchaser is substituted to and acquires all the right, title, interest and claim of the judgment debtor thereto,” subject, as has been said, to the debtor’s right of redemption, and his bare right of possession during the redemption period. With this limitation, every right, title, interest, and claim of the debtor is sold, and passes to the purchaser, in all respects, to the same extent that it would pass by a voluntary conveyance. All title to crops that was by the lease reserved in the landlord is transferred by the sale to the purchaser, and all the rights of the landlord under his lease to enforce the payment of rent inure to the benefit of the purchaser. And upon what is the underlying principle that gives to the purchaser all rents not yet due, however much they may be earned, based? ■ It is simply that they constitute a part of the estate that is bought and paid for. They enhance the value of the estate just as certainly as would a growing crop, and just as certainly they form a part of that for which the consideration is paid. I have not seen this more clearly stated anywhere than by Kennedy, J., in Bank v. Wise, 3 Watts, 397: “But then to say that the lessee, even at the expiration of the half year, shall be bound to pay the rent for the last three months thereof to the purchaser, and for the first three to the defendant in the execution, would be to split up a demand into.two, which, by the terms of the contract giving rise to it, was one and entire, and would subject the lessee to two actions instead of one, contrary to his agreement, and contrary to a well-known rule of the common law. As the lessee, however, has had the full enjoyment of the leased premises, there can be no good reason for his not paying the whole of the half }rear’s rent, as soon as it shall become payable by his lease, to the party entitled to receive it. Then, seeing the. purchaser has succeeded to the rights of the landlord, why shall he not receive the whole rent? The only reason, of the least plausibility, that can be alleged for apportioning the rent according to time between the defendant in the execution and the purchaser at sheriff’s sale, by giving one-half of it, on account of the first three months of the half year, to the defendant in the execution, and the other half, for the last three months, to the purchaser at sheriff’s sale, would be to say that it did not properly and truly form any part of *234the subject-matter or estate sold by the sheriff; that the defendant in the execution had received no consideration, and the purchaser had paid none for it. But, by inquiring into and ascertaining what was really sold and bought at the sheriff’s sale, it will be seen that there is no ground whatever for such a suggestion, and that it is a great misapprehension of the matter to suppose it; for we shall find that the purchaser at sheriff’s sale not only purchased, but must be considered as having paid for, and as being invested with, a right to demand and receive all the rents which shall become payable, according to the terms of the lease, after the time that his title to his purchase became perfect, by his payment of the purchase money, and receipt of the sheriff’s deed. A right to demand and receive all such rents formed the very heart and essence of his purchase, seeing it was merely a reversionary interest.” Nor does this work any hardship upon the execution or mortgage debtor. He gets the full benefit of this enhanced value. It goes to pay his debt, or is returned to him by way of surplus. I find nothing in our statute that conflicts with these well-settled principles. It says that the purchaser from the time of his purchase until a redemption is entitled to receive from the tenant, in possession the rents. But the rents he is to recover for that time are the rents accruing during the period. The fact that in case of redemption all rents received must be credited upon the debt does not change the relative conditions. Redemption can. be made only by paying the amount of the purchase price, with interest, as provided by statute; and the purchaser, being only required to credit the amount of rent actually received, would still have his original purchase price, with the interest. The application of these principles to the case at bar makes it clear that if, under the contract in question, the title to the crop remained in Ditton, by the purchase that interest was transferred to this plaintiff, and after the crop had been divided under the lease, and the one-half that was to be kept by the landlord as rent had been placed by itself, then plaintiff’s title to such half, and to every part thereof, became absolute; and if then a third party, without plaintiff’s knowledge or consent, conveyed it to a point where it had an increased value, and the defendants there unlawfully detained it, plaintiff might recover the grain or its value at that point. The judgment is properly reversed. I am-authorized to say that Young, J., fully concurs in these views.