Court Opinion

ID: 7817445
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:41:16.06463+00
Date Added: 2024-06-11T16:30:38.309667
License: Public Domain

John A. Fogleman, Justice, dissenting. I cannot agree with the result reached by the majority in this case. While I have no particular quarrel with the holding that the payment in advance is a condition precedent to the right to renew or extend the lease, it is my opinion that appellees have effectively waived their right to terminate for appellant’s failure to comply with the condition. Waiver occurs upon the failure to assert one’s known right. In the present case, the agreement created a lease' for the term of 16 years, with a perpetual option to renew or extend, exercisable by advance payment of the annual rental. Upon the expiration of the original 16-year lease period, it was incumbent upon appellant to pay the next year’s rent in advance in order to “continue” the lease “in full force and effect.” In such a case, failure of a lessee to make the required payment in advance would entitle a lessor to declare the lease at an end. Failure of a lessor to assert this right would amount to a waiver thereof. There no longer being any condition to the continuation of the tenancy, the lessee’s holding over and the lessors’ recognition of the lessee’s rights under the lease would operate to continue the lease. I do not feel that the case of Riverside Land Co. v. Big Rock Stone & Material Co., 183 Ark. 1061, 40 S. W. 2d 423, can be distinguished from this case. Each involves a condition precedent to the extension of the lease, the condition there being the requirement of thirty days’ written notice. While it is true, as the majority opinion indicates, that there the lessee continued to pay, and the lessor to accept, the agreed rental, the performance of this covenant was significant only insofar as it showed that the lessor did not intend to require compliance with the condition precedent, i. e., the notice requirement. Here the advance payment of rent is itself the condition precedent. Other factors must be looked to in order to determine whether waiver of this condition has occurred. Thus, it becomes important to determine the effect of holding over on such a condition. I do not agree that the case of Heyden v. Barnsdall Refining Co., 192 Ark. 789, 94 , S. W. 2d 709, is precedent for the proposition that a lessee’s holding over can never amount to an exercise of an option to renew or extend. The opinion in that case only said that the mere holding over for a few months would not constitute, as a matter of law, a renewal of the lease. The court went on to say that, on the facts, the trial court’s finding (that there had been no holding over) could not be said to be against the preponderance of the evidence. Certainly, if the facts had shown clearly that there had been a holding over, this factor could have been considered in determining whether the option had been exercised. Whether the appellant’s holding over be considered a means of exercising the option to renew or a factor in determining if waiver of the condition precedent has occurred, the result in the present case would be the same. Although the chancellor has found, as a matter of fact, that there has been no waiver of the condition precedent, this case is to be reviewed de novo. The chancellor’s determination, while not to be lightly regarded, is not binding on this court. A review of the evidence indicates clearly that the lessors, by their recognition of the tenancy after February 4, 1963, effectively waived their right to stand on the condition precedent. The record, with regard to the issue of waiver, shows the following facts which appellees either admitted or failed to deny on rebuttal: 1. That Uebe’s use of the spring has been continuous and uninterrupted from the inception of the lease contract until Bowman’s objection in the spring of 1966, which was three years after the expiration of the original 16-year period. 2. That when Uebe told Bowman that the latter owed him for the hay baler, he also mentioned to Bowman that this was to be payment on the contract. 3. That Bowman, in 1966, told a fellow worker the lease had been expired for two or three years. That he “thought he could get along with Uebe, but he didn’t know if he could get along with this board of directors that was on this cooperative.” 4. That when Bowman first approached Uebe in the spring of 1966, he intended only to determine the extent to which he (Bowman) was restricted in his use of the land surrounding the pump. 5. That Bowman helped Uebe repair his pipe line when it was damaged. 6. That the Bowmans, on separate occasions in 1965, had warned others about using the pump without the permission of Uebe. The combined effect of these undisputed facts is to show that, although lessors knew of their rights under the lease contract, they nevertheless made no objection for over three years, during which period they continued to recognize the lease to be in effect. Such recognition of the lessee’s rights under the lease, together with the failure of the lessors to assert the condition precedent and declare the lease to be at an end, clearly demonstrates that the condition has been waived. Thus, the finding of the chancellor in this regard is clearly against the preponderance of the evidence. I would like to make clear my position on this flatter by way of summary. My view is that the condition 'precedent has been waived, the condition, of course, being the required advance payment. I by no means intend to convey the idea that the Bowmans are not entitled to the agreed rental. The requirement of advance payment constitutes both the condition precedent and a covenant to pay rent. The covenant to pay rent is separate and distinct, and is not waived. But the requirement that it be made in advance was clearly waived. When the similarity between this requirement and the requirement of thirty days’ written notice in the Riverside Land Company case is noted, it seems clear that the requirement of advance payment, being a condition precedent, may be waived on a proper showing of facts. I believe that such a showing has been made. The effect of the majority opinion is to preclude a finding of waiver of a condition precedent to a lessee’s right to renew or extend in any case where the rental has not been paid. I can see no reason to attach such controlling significance to the performance of this covenant. My view is that, where there are other factors indicating that the lessor intentionally fails to assert a known right, there may be a waiver of the condition precedent, whatever it may be, even though the rental covenant is not performed.1  I would reverse and remand for entry of a decree consistent with this opinion. I am authorized to state that Harris, C. J., joins in this dissent.  For the purposes of this appeal, it is not necessary to consider the extent of the waiver or the effect of the tender of the 1967 rent by appellant.