Court Opinion

ID: 8195973
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:19:17.39112+00
Date Added: 2024-06-11T16:40:46.243523
License: Public Domain

DoerfleR, J.
On a motion for a rehearing in this court it is argued by plaintiff’s counsel that the court erred in denying plaintiff’s right of recovery against the defendants, upon the ground that the omnibus provision contained in the lease, set forth at the foot of paragraph Eleventh (see original opinion, p. 477), which provision starts with the words “Provided always, and these presents are made upon the express condition,” etc., authorizes a recovery for rents accruing subsequent to the forfeiture; in other words, it is argued that the liability on the part of the defendants survives the forfeiture of the lease which resulted from the giving of the three days’ notice to quit and the failure of the tenant to pay the rent within such period. The provision above referred to expressly provides that where default occurs in the payment of the rent reserved it shall be lawful for the lessor, if he so elects, to re-enter the demised premises, either with or without process of law and without notice, and to expel the lessee and to. repossess such premises and enjoy the same as before the demise.
It is argued by defendants’ counsel that this language immediately preceding denotes merely the common-law remedy and does not include summary proceedings such as are provided for by the unlawful detainer statute of this state. If the provision ended there, the position of defendants’ counsel would be unquestionably correct, but the lease continues: “Without prejudice to any remedies which might otherwise *483be used for arrears of rent or preceding breach of covenant; ...” Such language, if it means anything, would indicate that the landlord is not confined to the common-law remedy, but might pursue any remedy which is authorized by law, whether common-law or statutory.
Subsequent to the semicolon which succeeds the word “covenant,” the following language is employed:
“And such expulsion or removal, whether by direct act of said lessor, its agents or employees, or through the medium of legal proceedings instituted for that purpose, shall not affect the liability of said lessee for the past rent due or future rent to accrue under this lease.”
It will be observed that by the expression “or through the medium of legal proceedings instituted for that purpose,” it was the intention of the parties not to confine the lessor, in the event of breach, to the common-law remedy of ejectment, but, on the contrary, legal proceedings are authorized. The legal proceedings may be proceedings under the statute as well as under the common law. The lease, therefore, is sufficiently explicit to authorize summary proceedings under the unlawful detainer statute of this state, and if this.is so (and we are now convinced that it is), then the liability for rents accruing during the term and after the forfeiture-survives:
There can be no dispute that, when the notice to quit in the instant case was served, the lessee’s estate thereby became forfeited, and from this forfeiture the tenant could only relieve itself by the payment of the rent within the three-day period, and such páyment so made would have reinstated it in all respects to its former estate, as though no default with respect to payment of rent had occurred. When such forfeiture thus became effected the relationship of landlord and tenant ceased. The lessee, however, expressly covenanted in the lease that it would pay the rent for the entire term in accordance with the provisions of the lease, forfeiture or no forfeiture; so that, while the relationship of landlord and *484tenant ceased with the forfeiture, the contract relation between these parties continued. Therefore, the acceptance of the premises by the plaintiff, as is fully explained in the original opinion, manifested a termination of the landlord and tenant relationship, but had no effect whatsoever upon the liability of the lessee for subsequently accruing rents.
In 36 Corp. Jur. p. 336, it is said:
“The tenant may continue liable to the landlord after the termination of the tenancy because of the inclusion in the lease of provisions imposing liability for rent, damages, or the deficiency arising in the case of the reletting.”
The text so quoted from Corpus Juris is supported by a long list of authorities, both federal and state, and the rule as so pronounced is the prevailing law in this country, according to the overwhelming weight of authority. This is persuasive of the error of the court in its original decision.
The lessee expressly covenanted in the lease to pay the annual rental for each year during the term in monthlv instalments, in advance, each instalment to be paid on the first day of each and every month. The guaranty clause under the lease reads as follows :
“For value received, the undersigned, Emelie L. Bai-reuther and Leo James Lentzen, hereby guarantee that the lessee named in the within lease will promptly pay the rent and other charges herein reserved when due, and perform all the covenants and conditions of said lease, and in case default is made in the payment of rent and other charges or performance of the covenants and conditions of said lease, the undersigned hereby agree to become and be jointly and severally liable with the lessee for each and every separate default.”
It is plausibly argued by counsel for the defendants that the guarantors bound themselves solely for the prompt payment of the monthly instalments of rent as they fall due; that the guaranty does not contain a provision for the payment of'damages; and that if it had been in contemplation of the parties that the guarantors would be held liable for *485the damages ensuing by reason of the fact that after the forfeiture the lessor resumed possession of the demised premises and attempted again to lease the same, for the purpose of minimizing the damages (which damages would consist of the difference between the rent reserved' and the amount of rent actually obtained), the lease should have contained an' express provision for the recovery of such damages against the guarantors. It is also argued that the contract of guaranty must be strictly construed in favor of the guarantors.
Here it must be noted that the guarantors did not only guarantee the prompt payment of the rent reserved, when due, but they also agreed to perform all the covenants and conditions of said lease, and among the covenants and conditions of said lease are the foregoing covenants, which in substance provide that in case of a forfeiture the lessor might again take possession of the leasehold estate and hold the lessee liable for all rents, including future rents which have not yet accrued. The point made by counsel that there is a vital distinction between rents and damages as applicable to the instant case is rather technical, to say the least. The damages consist of unpaid rents. They are based upon the rents, and upon nothing else. In the instant case it is clear that the lessor elected to relet the premises and to minimize the damages. It is clear that there are authorities which hold that a lessor need not relet the premises but can charge the lessee with all of the rent reserved. Matter of General Assignment of one William G. Hevenor for the Benefit of Creditors, 144 N. Y. 271, 274, 39 N. E. 393. The better rule, in our opinion, is the one which requires the landlord to use reasonable diligence to obtain a new tenant or tenants, so that the damages may be minimized.
The rule is properly stated in Galbraith v. Wood, 124 Minn. 210, 144 N. W. 945, 948, where it is said:
“It is the law that, upon the assertion of a forfeiture by the landlord, he is still entitled to rent which had previously *486become due, but not entitled to recover rent subsequently to become due. Indeed, such a forfeiture terminates the relation of landlord and tenant, and no rent can subsequently become due. 1 Tiffany, Landl. & T. 1174; 18 Am. & Eng. Ency. of Law, 392; Stees v. Kranz, 32 Minn. 313, 20 N. W. 241. This is clearly the settled doctrine where there is no express stipulation in the lease giving the landlord the right to recover the rent for the balance of the term. Where there is such a stipulation the tendency of the decisions is to hold it valid, and to continue the liability of the tenant in spite of the termination of the lease. Such liability is for any deficiency in the amount of rent obtained on a lease to another. 1 Tiffany, Landl. & T. 1175 et seq., and cases cited. This is not strictly a liability for rent but a contractual liability based upon the agreement in the case.”
See, also, Central Inv. Co. v. Melick, 267 Ill. 564, 108 N. E. 681; Halpern v. Manhattan Ave. Theater Corp. 173 App. Div. 610, 160 N. Y. Supp. 616, affirmed 220 N. Y. 655, 115 N. E. 718; Strauss v. Turck, post, p. 586, 222 N. W. 811, decided herewith.
When the lessor accepted the premises after the lessee’s default, it did not accept the same as an ultimate surrender so as to release the defendants from further liability, but under authority granted in the lease, pursuant to which the defendants would still be liable for future rents until the end of the term.
By the Court. — The original opinion is withdrawn, and the judgment of the lower court is reversed and the cause is remanded with directions that the plaintiff file a supplemental complaint so as to include all of the damages, if any, up to the end of the term, the entire term having in the meantime elapsed, and that further proceedings be had in accordance with law.