Court Opinion

ID: 7811337
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:13:12.276145+00
Date Added: 2024-06-11T16:30:28.772338
License: Public Domain

Hart, J. (after stating the facts.) Counsel for the defendants asked the icourt to instruct the jury that under the .evidence in the case the defendants were evicted from the demised premises by paramount title, but the court refused to give the instructions, and gave instead instruction No. 11, which is ns follows: “I charge you that, although you may find from the evidence that the mortgages held by the first National Bank of Paris, Texas, and the First National Bank of Eureka Springs, on the Basin Park Hotel property, were duly foreclosed by decree of the Federal court at Harrison, and that the purchaser at the foreclosure sale took said property free of the lease of the defendants, yet, if you further find that the terms of said mortgages and said decree provided that the purchaser at said sale had the option to consider the defendants as his tenants and affirm said lease in all of its provisions and collect rent from them or disaffirm said lease and take immediate possession of said- hotel premises, then, before there would be an eviction in this case, the defendants must show by a preponderance of the evidence that the purchaser at said sale elected to disaffirm said lease or declined to affirm the- terms of the lease as it was originally executed between plaintiffs and defendants.” The court erred in giving instruction No. 11. The undisputed evidence shows that the lessees were evicted by paramount title and were entitled to recover the damages resulting therefrom. The bank had a valid mortgage on the land which was executed prior to the lease. Upon default being made in the payment of the mortgage according to its terms, the mortgagee brought suit to foreclose its mortgage, and the lessees were made defendants to the action together with the mortgagor. There was a judgment in favor of the mortgagee for the mortgage indebtedness and a decree of foreclosure. The mortgagee became the purchaser of the property at the foreclosure sale. Prior to the sale it had notified the lessees that it would not recognize the lease unless the lessees would waive their claim for expenditures made under the terms of the lease and agree to pay the bank rent for the future. The decree of foreclosure fixed the rights of the parties. It specifically provided that the purchaser at the foreclosure sale should take the premises free from any claim by the lessees or any lease on the property. The mortgagee was given the option to dis-affirm the lease and take immediate possession of the property so purchased. It disaffirmed the lease by notifying the lessees that it would not recognize the lease unless the lessees waived their claim for expenditures against the lessor under the lease and paid the bank the rent in the future. This was equivalent to an eviction under paramount title. It was a hostile assertion of the paramount title by the bank, and the lessees had a right to leave the premises without waiting for a writ of assistance and actual physical ouster. The lessees ’ rights were fixed by the terms of the lease, and they were not required to waive their rights thereunder. Morrison v. Weinstein, 151 Ark. 255. It would have been a vain and useless thing for the lessees to have waited for the process of the court to put them off the premises when the mortgagee had a valid decree of foreclosure in which it was recited that the purchaser at the sale should take the premises free of the lease. It is true that the mortgagee had the option to continue the lease and offered to allow the lessees to re-remain there a few days after the sale. The mortgagee, however, refused to allow the lessees to remain during the term of the lease unless they waived their claim against the lessor for damages and paid it the rent. Under the decree the mortgagee had a right to expel the lessees from the premises, and its action was equivalent to a threat to do so. The threat to turn out the tenant unless he promised to pay the rent to the mortgagee and waive his claim for damages amounted to a complete ouster or eviction. Smith v. Shepard, 15 Pick. 147, 25 Am. Dec. 432. It follows that the court erred in giving instruction No. 11. It is next insisted that the court erred in modifying instruction No. 7 asked by the defendants, which is as follows: “If you believe from the evidence in this case that the defendants were evicted from the demised premises by paramount title, then the court tells you that the defendants are entitled to recover on their counterclaim the difference between the rent agreed upon and the rental value of the premises for the unexpired portion of the term, as shown by the evidence; also for the value of the option to renew the lease, as shown by the evidence; also the amount expended by defendants, if any, for repairs and improvements which could be used onlv moon the premises, regardless of whether such repairs or improvements were authorized by the plaintiff, or were of any value to plaintiff, also whatever amount the evidence shows the defendants spent for dishes, linens, supplies, repairs or improvements authorized by plaintiff.” The court modified the instruction by striking out the item of damages based upon the defendants’ expenditures for repairs and improvements which could only be used upon the premises. Under the evidence adduced for the defendants, they have expended several hundred dollars in painting the hotel and in making several other necessary repairs upon it. In Byers v. Moore, 110 Ark. 504, the court held that where a tenant is unlawfully evicted by the landlord before the expiration of the lease, he may recover the money expended by him in the repair of the building and fixtures, which would have enabled him to occupy it more profitably; and this would be true, even though the repairs were not of value to the landlord. See also Reeves v. Romines, 132 Ark. 599, and Morrison v. Weinstein, 151 Ark. 255. It follows that the court erred in modifying instruction No. 7 requested by the defendants. For .the errors indicated in the opinion the judgment must be reversed, and the cause will be remanded for a new trial.