Estate of McElroy v. Brooke

104 Ill. App. 220, 1902 Ill. App. LEXIS 790

• Court: Appellate Court of Illinois
• Decided: November 28, 1902
• Status: Published

Opinion

Mr. Justice Freeman

delivered the opinion of the court.

Counsel for plaintiff in error (hereinafter referred to as the guarantor) assert in the first place that inasmuch as the personal property assigned by the lessee to the lessor as security for rent was not removed from the leased premises by defendant in error, “ the taking possession of the same by the landlord in order to retain possession of his lien upon the personal property, and exercising, as he did, acts of ownership over the premises and property, was such a change in the contract relations between the lessor and the lessee, as discharged the guarantor, and constituted in law a surrender; ” and that “ if the defendant in error took and retained possession of the premises or any portion thereof by agreement of the lessee during the term, there was a surrender in law.”

The guarantor introduced no evidence, and the testimony in behalf of defendant in error (hereinafter called lessor or landlord) is uncontradicted. It must be accepted for what it tends to prove. The facts being undisputed, was there anything done by the lessor which justifies the guarantor’s claim that he, the landlord, took possession of the demised premises or exercised acts of ownership thereon during the term?

It appears that when the assignment of November 30, 1894, conveying the personal property then on the demised premises as security for the rent, Avas executed and delivered to the landlord, the latter requested the tenant, as symbolic of the transfer, to deliver one of the keys of the premises, and this was done. The intention in so doing Avas, the witness states, “ to rather fix my security for the lien; we supposed it Avould increase the v^lue of the lien.” He states, however, that he “ took no possession at all of the building at that time,” never went into it before the appointment of the receiver, and “ never used the key.” In this he is in no way contradicted. The statement of plaintiff’s attorneys that “ Brooke immediately took possession of the personal property by taking possession of the leased premises,” is not warranted by the evidence, unless the acceptance of the key as symbolic of the delivery of the personal property can be construed as a delivery and surrender of the possession of the leased premises and an acceptance of the same by the landlord. The general rule is that “ when the keys of a warehouse are delivered to a purchaser of goods locked up there, with a view of effecting a delivery of such goods, the delivery is complete.” Bouvier’s Law Die., title “ Iiev.” It would not be contended, however, we imagine, that the delivery of one of several keys for such a purpose constituted a delivery of the warehouse itself. The -delivery of a key under such circumstances and with such intention is regarded as a symbolic delivery of the goods. Where goods are ponderous and incapable of being handed over from one to another, the transfer may be made by the delivery of the key of a warehouse in which the goods are lodged, or the delivery of other, mdioia of the property. Benj. on Sales, 6th Ed., Sec. 696; Bouvier’s ’ Law Dic., title “ Symbolic Delivery,” and cases there cited.

The question in the case before us is not as to the effectiveness of this symbolic delivery of the goods, but whether the delivery of the key for such a purpose and with such intention constituted a delivery of the premises containing the goods. That such was not the intention of the parties is the undisputed testimony and is shown by their conduct. The lessee’s secretary and treasurer by whom the assignment of November 30, 1894, was executed, and who was afterward receiver for the lessee, testified that the lessee corporation had possession of the premises under the lease until he “ was appointed receiver, March 16,1895.” It is evident that he so regarded the situation, for if the lessee had not continued in possession it is not probable he would have felt called upon as receiver to notify the landlord that he, as receiver, had then elected to throw up the lease and abandon the premises. He states, it is true, that “ it was pretty hard to say up to what time our company was in actual possession of those premises; they had not been doing business there for over a year; ” and again, “ v e paid rent several months when we did not use the building except for storage, but all the time we were trying to find a tenant for it.” It is needless to say that the mere shutting up by the lessee of a building which he is not using and for which he is trying to find a sub-tenant is not by any means a surrender of rights under the lease. There is, however, evidence tending to show affirmatively that the company’s employes continued to go in and out of the building from time to time, taking on and carrying off such of the personal property as they desired to use in the company’s business, notwithstanding the assignment, and without objection from the lessor, thus using both the premises and the goods. The receiver states that he does not say that he “ had surrendered possession; ” that he is “ not prepared to say just when we legally surrendered possession; ” and in another connection he testifies, “ When I tried to take possession of it (the assigned personal property) it was understood that the rent would be paid up to the time of the receivership.” Whereas, it appears on the other hand that neither the landlord nor any agent of his entered the premises or exercised control overthem after the assignment until after he had been formally notified by the receiver of his election to abandon the lease as an asset of the insolvent estate and to give up the leased premises. That it was not the intention to surrender possession of the premises by delivery of a key is further evident from the assignment itself. Why did it provide for payment of rent “ hereafter accruing” on the lease, and for cancellation and surrender of the assignment whenever the past due rent should be paid up, if it was intended to give up the leased premises to the landlord at that time ?

Whether .the landlord did or did not obtain a validj lien on the personal property assigned to him as security for rent from and after such assignment, as against creditors or purchasers for value, we need not inquire. The statute relating to,chattel mortgages was not complied with. (R. S., Chap. 95, Sec. 1.) But as between the lessor and lessee there is no reason for regarding the transfer as an idle ceremony in any event. It seems to have enabled the landlord subsequently to make his lien good by taking possession of the property after the abandonment of the premises by the receiver. It is enough in the present case that it clearly appears it was not the intention of either party when the key was delivered to change the status of the leased premises or to affect the terms of the lease; that the landlord did not in fact enter or assume control over the leased premises or do anything indicative of an intention so to do; to which may be added that the lessee continued to use and even to dispose of some of the assigned personal property without objection by the landlord, the assignee thereof, and continued to make such use as it desired of the premises, entering and re-entering as before the assignment.

Authorities are referred to by guarantor’s counsel to the effect that “ surrender by operation of law results from acts which imply mutual consent to the surrender independently of the intention of the parties that their acts shall have that effect, and by way of estoppel.” 2 McAdam, Landlord & Tenant, p. 1270. The same author quotes from Talbot v. Whipple, 14 Allen, 177, that “ any acts which are equivalent to an agreement on the part of the tenant to abandon, and on the part of the landlord to resume possession of the demised premises, amounts to a surrender by operation of law.” The acts of the parties under consideration did not “ imply mutual consent ” nor were they ‘‘ equivalent to an agreement ” to surrender the lease. They imply the contrary.

It is argued that the receiver had not in fact vacated and abandoned the premises at the time the lessor took possession, although he had notified the landlord of his election to “ renounce said lease as an asset” of the lessee, and to surrender “ the lease and the premises therein described.” It is said he was still in possession because the property assigned to the landlord as security remained on the premises. It is apparent, however, that the lessee’s officers knew that it had no right to remove this property without payment of the over-due rent, and it was abandoned for that reason. It had been transferred to the landlord as security, he was entitled to have possession of it, and both parties acted accordingly. The receiver and former secretary and treasurer of the lessee testifies, “ I didn’t try to take it out on account of this assignment, but it was put in the hands of the court, and the court decided that Mr. Brooke could hold it.”

After notice of the abandonment of the premises by the receiver, the lessor undertook to relet in accordance with the seventh clause of the lease. He had notified the receiver in writing that he would not consent to a surrender, but as the lessee had “abandoned and vacated said premises” he would try to relet them, but should hold the lessee, the receiver and the guarantor liable “under the terms of £he lease.” Complaint is made that to protect his lien the lessor afterward put a padlock on the barn, which then contained the personal property held by him as security for rent. In what way the rights of the lessee or the guarantor were thereby affected we are not advised. The tenant and the receiver having abandoned and vacated the premises, we discover no reason why the lessor was obliged to leave the doors unfastened and the property unprotected, or to allow the receiver to carry off for creditors the goods upon which the landlord’s lien was unsatisfied.

It is urged that the surrender of the lease and premises by the receiver did not constitute an abandonment of the premises, under the seventh clause of the lease, by the company. It is said that the receiver did not represent the company, but was an officer of the court. (Citing Heffron v. Gage, 149 Ill. 182-193.) It appears, however, that the order appointing the receiver in the case at bar directed him to take possession of all assets, and “the defendant company and each' and all of its officers, agents and employes are hereby required and directed to make such transfer, and to execute, acknowledge and deliver all such papers as may be called for by the receiver as may be deemed necessary to place the said receiver in full possession and control of said property.” The receiver in the case before us was not “a mere custodian pending litigation” as in the case of Heffron v. Gage, referred to. The lease was an asset, and the right to it as such asset passed to the receiver by the order of court, directing the execution of such papers as might be necessary to give him full possession and control. There was, therefore, a “transfer by operation of law of the interest in the premises acquired under the lease.” It is to be presumed that an assignment of the lease and other property was made to the receiver in obedience to the order. The receiver acted accordingly, and treating the lease as an asset of which he had control, he formally elected “to renounce said lease as an asset of the said Waukesha Hygeia Mineral Springs Co., and elects to surrender said premises * * * therein described.” If there was such an assignment made in obedience to the order of court, then there certainly was, in this case, “upon the execution of the assignment, an abandonment of the premises by the lessee.” (See Smith v. Goodman, 149 Ill. 75-85.) In any event we are of opinion that there was such an abandonment by the lessee, as was contemplated by the lease, when by operation of law under the order of court referred to, the right of possession and control of the leased premises and the lease itself passed to the receiver, in accordance with that order directing an assignment to him, and that under the seventh clause of the lease the lessor might at once, upon the refusal of the receiver to retain the lease as an asset, relet the premises for the term and charge the lessee with the deficiency, as was done. The parties covenanted that such an abandonment and vacation should not work a release of the lessee from the obligation to pay the stipulated rent for the rest of the term. “This was a contract which violated no principle of law, and which the parties were clearly competent to make, and no reason is apparent why it- should not be enforced.” Heims Brewing Co. v. Flannery, 137 Ill. 309-318.

It is contended that in this proceeding there was no liability on the part of the guarantor for installments of rent becoming due after filing the original claim in the Probate Court, because, as it is claimed, as to such rent the claim is merely contingent. In considering this objection it is well to bear in mind certain dates. The terms of the lease expired April 30, 1898. The original claim was filed in the Probate Court July 15, 1896. This claim was amended December 14, 1900, to cover only the deficiency remaining on account of unpaid rent, which at that time was exactly ascertained and fully due. The original claim was filed under section 67, chapter 3, E. S., entitled “Administration of Estates,” which authorizes a creditor whose debt is not due to present his claim for allowance and settlement, against an estate. It has been held that this applies only to unconditional contracts for payment of money. Robison v. Harrington, 61 Ill. App. 543-545 (but see Miskimen v. Culbertson, 162 Ill. 236, involving the same fabts). See also Dunnigan v. Stevens, 122 Ill. 396, in which the indorsee of notes not then due was allowed to file his claim thereon against the estate of the indorser. Attention is called to provisions of the lease in controversy which it is said render the claim for rent not due merely oontingent, viz., the clause which in case of default by the lessee permits the lessor to declare the term ended, and a clause which provides that in case of destruction of the premises by fire the term created by the lease shall cease and determine. The contract of the lessee, however, is unconditional to pay the rent for the whole term. The fact that upon certain contingencies the term might be shortened does not relieve the lessee from his promise so to pay. If a party enters into a contract with another, the performance of which would not be possible by any one except himself, the fact that the contingency of his death would render performance impossible would not make the contract conditional. In the case of Miskimen v. Culbertson, supra. the Appellate Court had held that a contract which provided that a failure to make any one of the monthly payments at the time due would, at the option of the payee, work a forfeiture, was not a conditional contract;' but the Supreme Court held that if the right in that case rested solely on section 67, chapter 3 of the statute, supra, and there was no other statute bearing on that question, “we would have no hesitation in holding that he was entitled to have his claim allowed against the estate.” In the case before us, there is no other statute bearing on the question we are considering. In Dunnigan v. Stevens, supra, it is said: “We think the indorser here undertook that these notes should be paid at maturity; that there was a binding obligation on his part for their payment; that there was no condition or contingency as to the obligation itself, but that it was absolute and positive, and constituted a claim against the estate of the indorser,” and “that it was properly filed as such against the estate.” So in the present case there was no condition or contingency as to the obligation itself. The premises had been vacated and abandoned by the lessee before the original claim against the estate was filed, and the judgment now complained of was not rendered until after the term of 'the lease was ended, and there was no uncertainty as to the amount to be paid under the lease. It was rendered upon the amended claim, which was reduced by credits obtained from reletting the premises for the unexpired term after the vacation and abandonment by the lessee, so that- it was less than the amount of the original claim.

We deem it unnecessary to extend this opinion to discuss in detail objections which, although not specifically considered, are practically disposed of by what we have said. Finding no reversible error in the record, the judgment of the Circuit Court must be affirmed.

Mr. Presiding Justice Waterman took no part.