Court Opinion

ID: 6814553
Source: CourtListenerOpinion
Date Created: 2022-07-23 18:59:01.012381+00
Date Added: 2024-06-11T16:03:48.279417
License: Public Domain

Sims, J.,
dissenting:
In the case of Toupin v. Peabody, 162 Mass. 473, 39 N. E. 280, referred to in the majority opinion, the unrecorded lease was in writing for a term of five years, with a covenant therein that the “lessee is to have the privilege of renewing this lease upon the same terms for a further period of five years.” Before the first term expired, the lessor conveyed the premises to a bona fide purchaser without notice of the written lease. The suit was by the lessee, by bill in equity, *662against the purchaser to compel specific performance of the covenant for renewal in the lease.
The statute involved, so far as material, was as follows: “A conveyance of a,n estate in fee simple, fee tail, or for life, or a lease for more than seven years from the making' thereof, shall not be valid as against any person other than the grantor or lessor and his heirs and devisees, and persons having actual notice of it, unless it is recorded * * etc.
The relief sought in that case would, if granted, have given the lessee tenant for years a longer holding than seven years fro.m the making of the lease, to-wit, a holding of ten years. The case does not involve the question whether a lease for a less term than seven years, with the privilege to the lessee of yearly renewals thereafter, extending on beyond the seven years, would or would not be valid for terms which, together, would not exceed the period of seven years from the making of it.
In the opinion of the court in that case, this is said: “The intention of the particular clause in question is that a bona fide purchaser without actual notice may rely with certainty upon the fact that no instrument which does not appear of record, and of which he does not have actual notice, can give a tenant for years the right to any longer term than for seven years from the making of the instrument. • * * *
“The general intention of the section in which the clause is found is that no instrument operating to create an interest in land greater than an estate for seven years shall, unless duly recorded, be valid as against any person other than one who makes it or his heirs or devisees, unless such person has actual notice of the instrument. * * * In fixing upon seven years for the making of a, lease as the length of a term which might be valid as against a bona fide purchaser without actual notice, the legislature intended that to be the utmost which a lessee for years under an un*663recorded instrument could claim as against such a purchaser, whether the instrument demised directly a longer term or provided for its indirect creation by an agreement for renewal at the lessee’s option.”
However, as above indicated, that case does not involve the question which is involved in the instant case, namely, whether a lease for a, less time than the statutory period, with the privilege given the lessee of yearly renewals for successive terms of one year during a certain number of years, the extreme limit of which exceeds" the statutory period, is good for those terms which do not in the aggregate exceed the statutory period against a purchase for valuable consideration without notice, although unrecorded; and the case referred to does not decide that question, as indeed the court takes care to expressly state, in effect, in the .opinion in such case. The following is there said on this subject: ' “We do not decide whether an instrument which makes a present demise for a term of seven years or less, and which provides for a further term which, with the present demise, will exceed seven years from the making of the instrument, either by way of a new lesse * * * or by the effect of the lessee’s mere continuance in possession after the expiration of the first term, if not recorded, is wholly void as to a bona fide purchaser without notice, or whether it may be good for the first term of seven years or less. It is enough for the purposes of this case to hold that as to any extension, or second term, or agreement for renewal, which will carry the possession of the lessee to more than seven years from the making of the instrument, every instrument which confers an estate for years is within the meaning of the statute.”
Now, in the instant case, the “second term” covered by the agreement for renewal only is involved. That term added to the first term demised by the lease would “carry the possession of the lessee” to less than the statutory pe*664riod in Virginia of five years. So that the Massachusetts case just referred to is no authority for the holding that the instant case, in so far as the tenancy of ,the lessee drawn in question therein is concerned, is within the Virginia statute; and it seems plain from what is said in the opinion in the Massachusetts case aforesaid that such court would not so hold.
Coming then to the question aforesaid involved in the instant case, the following considerations lead, as I think, to the conclusion that the provision of the contract here involved is not within the Virginia, statute.
As stated in the majority opinion, the statutes involved in the case before us, when read together, provide as follows: “Every contract in writing for the conveyance or sale of real estate, or a term therein of more than five years. shall be void both at law and in equity as to purchasers for valuable consideration without notice, unless and except from the time that it is duly admitted to record.” (Italics supplied.) The contract under consideration, therefore, falls under the condemnation of the statutes only to the extent that it was made for a holding of the premises by the lessee for “more than five years” from the making of the contract.
As the contract stood when entered into (November 24, 1917), it might have been fully performed within two years and one month and six days, as the first term provided for began December 1, 1917, and ended on the last day of December, 1919. It was only in the event that the lessee exercised one of four options given by the contract of “four successive renewals of this lease” that the contract would not have been fully performed within that time. Before the first term expired, the lessee exercised one of his options of renewal of the contract, but expressly limited such renewal to an additional period of one year, which will be referred to as the second term. The action in the instant' *665case was instituted by the purchaser on January 12, 1920. to recover from the lessee the possession of the premises. There is involved in this action, therefore, the validity of the contract, as against the purchaser, only in so far as it is vouched by the lessee as his authority for holding the premises for the said second term, covering the year 1920. And as the contract stood at the time the action was brought, it might have been fully performed and terminated at the end of the year 1920, only three years and one month and six days from the time of the making of the contract. At the time of the action the lessee was not obligated by the contract to renew the lease further, and he did not assert any right then existing to hold the premises for a term or aggregate term of years in excess of five years, but only for the first and second terms, aggregating three years, one month and six days. As stated in the majority opinion itself, “It is only when the lessee using that demise,” referring to the demise for the first term) “and the provision for renewals in conjunction, asserts a right to a term of years in the premises in excess of five years, that his contract is required to be recorded to be effective against a purchaser for value. If not recorded, then with respect only to his claim for a term greater than five years should the contract be considered as avoided as to such a purchaser.” Since the lessee in the case before us did not assert, and his right to hold the premises at the time the action was instituted did not depend upon his right to assert “a right to a term of years in the premises in excess of five years,” it clearly follows, as I think, that with respect to the claim of the lessee involved in this case, the contract cannot be considered as avoided by the statute. Further—
The statutory provision under consideration, in so far as concerns the language having reference to terms in real estate of “more than five years,” is similar in its scope to *666the provision of the statute of frauds (sec. 2840, Code '1904), embracing “any agreement that is not to be performed within a year.” Hence, in accordance with the well-settled rules of construction of the statute of frauds (see Seddon v. Rosenbaum, 85 Va. 928, 9 S. E. 326, 3 L. R. A. 337, 1 Va. Law Reg. 553, et seq.), and also with the principle on which the decision of the Massachusetts casé above referred to is based, I think that so much of the contract involved in the instant case as could be performed within the period of five years from the making of it, which certainly included the second term aforesaid, is not within the Virginia statute, and is therefore valid as against the purchaser, the defendant in error.
Such, indeed, it would seem, would have been the opinion of the learned trial judge if he had thought the contract severable with respect to the second term aforesaid. In the opinion, of such judge in the record before us, this is said:
“It is further urged on behalf of the defendant that as the term is for only two years and one month and the contract for renewal provides for successive terms of one year each, it is valid until the term is reached which would carry it beyond the five-year period.
“This would be true if these were separate or separable contracts for each renewal, but the lease contains but one clause of renewal, and the law is well settled that where a contract is entire and relates in part to a matter which requires it to be in writing, the whole provision is void. Engleby v. Harvey, 93 Va. 440, 25 S. E. 225; Noyes v. Humphrey, 11 Gratt. (52 Va.) 636.”
The entire contracts involved in the two cases cited in the quotation just made were verbal contracts of a party to pay both for work done and to be done for another. Such contracts are not analogous to that involved in the instant case. And the fact that there is but one writing and but *667one renewal clause in that writing is, as I think, immaterial. The material question is, might that portion of the contract which is involved in the case before us, as aforesaid, have been fully performed without any obligation on the lessee thereunder for any further period? If so, the contract was clearly severable in that respect and is not within the statute. That it was thus capable of performance and thus severable seems to me to be obvious from the provisions of the contract, which, as aforesaid, did not obligate the lessee as a tenant bey'ond the first term as the case stood when the contract was executed, and did not obligate him beyond the second term, as the case stood when this action was instituted. The circumstance that the lessor was obligated by the contract for a longer time than the statutory period is not aloné the true criterion of the length of the contract obligation. Although one of the parties tó a contract is thereby bound for á certain period longer than the statutory period in question, if the . other party thereto is given thereby an option to terminate the contract at a time within the statutory period, the contract will be construed as one which may be 'performed within the statutory period, and hence as not within the statute. In Seddon v. Rosenbaum, 85 Va. 928, 9 S. E. 326, 3 L. R. A. 337, the contract bound the defendant “to buy 250 shares R. & D. at eighty-nine and sell the same to T. Seddon” (the plaintiff) “at the end of three years at ninety-six.” But it contained the further provision that “stock may be called at ninety-six at any time before expiration of two years.” And it was held that the contract might have been performed within one year, and hence was not within the statute of frauds.
For the reasons stated, I feel constrained to dissent from the majority opinion.