Court Opinion

ID: 9827149
Source: CourtListenerOpinion
Date Created: 2023-09-01 17:13:39.351312+00
Date Added: 2024-06-11T07:42:24.766580
License: Public Domain

On Motion for Kehearing.
Appellant strongly assails our conclusions in this case, particularly as to the second proposition discussed in the opinion. His position thereon is, in substance, that under the terms of the contract notice of election to continue the contract is required at the expiration of the three-year period, and that the analogy between this contract and the provisions in lease contracts for extensions of leases cannot be applied because in the landlord and tenant cases the tenant is in actual possession of the premises leased, so that this continued occupancy is notice, while in this case there was no possession or other overt act at the time of the expiration of the lease that would convey notice of election at the time required by the contract. The only questionable assertion in this proposition is in the first postulate; if that is correct, we would accept the proposition as proven. We cannot accept this postulate, however, without question. The authorities, as we understand them, regard a lease, providing for an extension, not as an offer to enter into a contract, but as conferring a right on the part of the lessee, subject to the conditions of the contract, to continue the enjoyment of a right already granted and being enjoyed. It is said in Tiffany’s Landlord and Tenant, § 218, that:
“Such a lease for a certain term, giving the lessee a right of extension for another term named, may be regarded in either one of two ways: (1) As creating a leasehold estate in the lessee of a duration measured by the sum of the two terms, with an option in the lessee to terminate it at the end of the first-named term, either by relinquishing possession, or failing to give notice of a desire to continue possession, or otherwise, according as the language conferring the privilege may provide; or (2) as creating two estates in the lessee, one to commence upon the termination of the other, provided all conditions precedent as to election and notice are satisfied.”
It is generally stated by the authorities that unless it is required by a term in the lease contract, no notice of the election by the lessee to have the term continued is required, this holding being on the assumption that such a contract contemplates that the only thing the lessee is required to do as a condition or as evidencing his election to continue the contract is to continue in possession of the premises. Montgomery v. Hamilton County, 76 Ind. 362, 40 Am. Rep. 250; Heffron v. Treber, 21 S. D. 194, 110 N. W. 781, 130 Am. St. Rep. 711; Chandler v. McGinning, 8 Kan. App. 421, 55 Pac. 103; Sheppard v. Rosenkrans, 109 Wis. 58, 85 N. W. 199, 83 Am. St. Rep. 886; Quinn v. Valiquette, 80 *230Vt. 434, 68 Atl. 515, 14 L. R. A. (N. S.) 965; 16 R. C. L. 885. Possession is thus not considered as satisfying a condition of notice, but as evidence of the prolongation of the term of the lease. If the exercise of the right consists in something other than possession, we see no reason why the doing of such acts after the termination of the first term in the same manner as before does not by the terms of the contract constitute the means of the indication by the grantee of his election to continue the contract for the additional term. A contract for renewal of a lease is ordinarily regarded differently. It is an option to contract, and notice of its acceptance is required, and many authorities assert that retention of possession in such case is not notice. Andrews v. Marshall Creamery Co., 118 Iowa, 595, 92 N. W. 706, 60 L. R. A. 399, 96 Am. St. Rep. 412, as well as authorities already referred to. This distinction we think destroys in a large measure the force as authority of the case of Wright v. Kaynor, 150 Mich. 7, 113 N. W. 781, referred to by appellant in his argument on motion for rehearing. The case of Falley v. Giles, 29 Ind. 115, also cited by appellant, is not on its facts in point, though some of the expressions in the opinion support appellant’s position.
While the conclusion may not be free from doubt, we adhere to our construction of the contract as announced in the original opinion, and the motion for rehearing will be overruled.