Court Opinion

ID: 7968443
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:52:51.641336+00
Date Added: 2024-06-11T16:34:39.630678
License: Public Domain

Canty, J.,
(dissenting.) I agree with the majority of the court that, in this case, covenants which run with the land will not run with the rent alone. Whether such covenants will run with rent alone is a mooted question. See Wood, Landl. & Ten. § 310. In the cases in which it has been held that such covenants will run with the rent alone, the assignment of the rent gave the assignee as complete control during the term for which the rent was assigned as the assignor could give him. It put the assignee in the shoes of the landlord as completely as possible without a conveyance of the reversion. But the assignment of the rents to come due on the waterpower leases in this case did not do so. It was an assignment of rent issuing out of a mere easement, an incorporeal chattel interest in other respects like an incorporeal hereditament, while the lessor himself'still remained in the possession of the estate out of which the incorporeal interest issued. The lessor, remaining in exclusive possession of such estate, was alone in position to maintain the dam and head race, and keep them in repair, as he covenanted to do in the water-power leases.
But I dissent from the opinion of the majority that a mortgagee in possession is not liable on such covenants.. While the deed from Thompson to Sprague, and the two contracts between them, constituted a mortgage, and gave Thompson the right to possession as long as he performed the contract on his part, on his default it gave Sprague the right to take possession; and there is sufficient evidence in this case to make it a question for the jury whether or not Sprague did subsequently take possession with Thompson’s consent. The position of the majority seems to be that the assignment from the lessor which will create privity of estate between his tenant and his *550assignee must be a transfer of all tbe landlord’s legal title; that what may be termed a “sublandlord,” like a “subtenant,” is not an assignee, and therefore not liable on covenants which run with the land. It is well settled that this is not the law. A transfer of the landlord’s interest for the time, or part of the time, the lease runs, is sufficient. “A concurrent lease is one granted for a term which is to commence before the expiration or other determination of a previous lease of the same premises, made to another person, or, in other words, an assignment of a part of the reversion, entitling the lessee to all the rents accruing upon the previous lease after the date of his lease, and all the remedies against the tenant under the prior lease, which his lessor would have had, except for the assignment. But, unless under seal, it does not have this effect, because it does not come within the provisions of St. 32 Hen. VIII. ch. 34.” Wood, Landl. & Ten. (1st Ed.) § 232. In the note to Spencer’s Case, 1 Smith, Lead. Cas. 77 (page 1st, 8th Ed.), it is said: “It is also well settled that an assignee of part of the reversion, e. g. for years, is within the act [citing authorities]; and so, also, is the assignee of the reversion in a part of the land.”
Prior to said statute of 32 Hen. VIII. ch. 34, few covenants which ran with the land ran with the reversion, and the assignee or grantee of the landlord could neither sue the tenant, nor be sued by him; and whether a mortgagee in possession is in privity of estate with the tenant, so that he may sue or be sued on the covenants in the lease made by the mortgagor depends on the proper interpretation of that statute. In all of those states in which the mortgagee does not take the legal title, and has but a lien, a mortgagee not in possession is not an assignee under this statute, and cannot sue upon, or be sued upon, such covenants. The possessory right or estate of such a mortgagee in possession is somewhat anomalous. He has a legal right or estate, as distinguished from a mere equitable one, and his estate is a complete defense to an action of ejectment, and he can only be deprived of his possession by an action to redeem in a court of equity. Pace v. Chadderdon, 4 Minn. 499 (Gil. 390); Jones v. Rigby, 41 Minn. 530, (43 N. W. 390.) His possessory estate partakes somewhat of the nature of a leasehold estate, but is certainly of a higher character than any lease for years. It is more than a lease to the mortgagee, to terminate on payment of the *551mortgage debt It is a surrender to the mortgagee, which gives him rights of a higher character than a mere possessory lien, one of which rights is the right to claim adversely to the mortgagor, and thereby set in motion a process of strict foreclosure, which will ripen into full title. Rogers v. Benton, 39 Minn. 39, (38 N. W. 765.) In fact, there is not much difference between the substantial rights of n mortgagee in possession under such a mortgage, and of a mortgagee in possession under a mortgage conveying the legal title. The «difference between the two is almost wholly technical, and each holds a legal estate, — one which a court of law will recognize. But it is well settled that the holder of a mere lien secured by possession is •an assignee under the statute, and has privity of estate which gives him the benefit, and makes him liable for the burdens, of covenants in leases. In the great leading case on the interpretation of this statute (Spencer’s Case, 5 Coke, 16), the fifth resolution, after naming several ways in which the interest, or a paid of the interest, of a party to the lease may be transferred to another, who thereby comes into privity of estate, lays it down, “The same law is of tenant by statute merchant or statute staple or elegit of a term.” In each of these cases the creditor merely held possession of the land, with the right to satisfy his debt out of the rents and profits. He held no higher estate.
Since the case of Williams v. Bosanquet, 1 Brod. & B. 238, it has generally been held in England that a mortgagee taking the legal title is liable on the covenants in a lease, whether he takes possession or not. Tliis case was decided after much consideration, and after taking the opinion of all the judges. It goes very extensively into the question of the rights and liabilities of a mortgagee in such a case, and reviews the English authorities, and the distinctions made by the different cases. While it overrules Eaton v. Jaques, 2 Doug. 460, it also attempts to distinguish that case in the following language (page 260): “Eaton v. Jaques will stand on its own pe«culiar ground, which is that an assignment of a lease, taken by way of pledge or security, differs in this respect from an absolute assignment, so that entry and possession are necessary.” It seems to me that is exactly in point here.. In Williams v. Bosanquet it is conceded that possession, either actual or constructive, is necessary to bring the assignee within the statute; but it holds that in cases *552where the instrument itself gives the assignee constructive possession, so that neither livery of seisin or formal entry on his part is necessary, but the instrument of transfer carries to him the constructive possession, actual possession is not necessary.
In that case there was a default in the mortgage and the mortgagee was entitled to the immediate possession. It seems to me that on the authority of these cases a mortgagee in possession not having the legal title but a mere lien and the right to possession, is an assignee within the statute of 32 Hen. VIII. ch. 34 and should be held liable on covenants running with the land.
(Opinion published 59 N. W. 638.)