Garnhart v. Finney

40 Mo. 449

• Court: Supreme Court of Missouri
• Decided: March 15, 1867
• Status: Published

Opinion

Holmes, Judge,

delivered the opinion of the court.

This is an action for damages on a breach of covenant for the renewal of. a lease, at the suit of the last one of several successive assignees against the lessor. The lease provided that every failure to pay the quarterly rent reserved, or to pay the taxes, or to keep any perform any of the other covenants, agreements, or stipulations, therein set forth, should “ make and create a forfeiture of the lease,” if so determined by the lessor, by a notice in writing. The lease was not to be assigned by the lessee, under penalty of forfeiture, without the written consent of the lessor. The lessee bound himself, his heirs, executors, administrators, and assigns, to erect three good and substantial three-story brick houses, of a specific quality and description, on the lot demised, within the first two years of the term, which were to be the property of the lessor at the end of the lease and renewals. The lease was for a term of ten years, and was to be renewed for another term of ten years, “ provided the said lessee, or his legal representatives or assigns, shall punctually pay all the rents and taxes” which might be assessed and legally demanded, “ and perform all the other covenants, agreements and stipulations herein set forth.’.’ The renewed lease was to contain similar covenants, except that the rent was to be fixed upon a valuation by appraisement in the lease specially provided; and a second renewal for still another term of ten years was to be made in the same manner, and subject to like covenants, agreements, and stipulations.

There was evidence to the effect that some of the successive assignments of the lease had been made without license in writing, and some upon a written consent, which had been lost; but that the lessor had never enforced a forfeiture of the lease for this or any other reason, and had accepted rent, with full knowledge of this failure, from the several assignees in succession, down to the end of the term; that the three houses had not been built within the first two years of the term; that the time had been afterwards extended by the lessor by a writing, which had been lost, or was not produced ; and that the assignee in possession, with this knowledge and consent of the lessor, and in pursuance of an arrangement made with him, had proceeded to erect these three houses under the lease, which were still not complete within the extended time, nor to the entire satisfaction of the lessor — but that, upon certain alterations and improvements being made under the supervision of certain arbitrators, the lessor had finally consented not to insist upon forfeiting the lease, amd accepted the buildings as they were, as a performance of the covenant, and expressed himself satisfied : he continued afterwards to accept rent as before until the end of the term, and never took any steps to forfeit the lease.

At the end of the term, the lessor refused to renew the lease according to the covenant for renewal, proceeded to eject the tenants, and took possession of the property. He now takes the ground that the covenants and agreements, on which the stipulation for a renewal depended, had not been kept and performed according to the terms and conditions of the lease, and that he was not bound to renew. It is answered, on the other side, that all right of forfeiture for the reason that the lease had been assigned without the written consent of the lessor, or that the other covenants had not been kept, had been waived by the subsequent acceptance of rent, with notice of the cause of forfeiture, and that any right to refuse a renewal of the lease, on account of any breach of the building covenant, had been waived; also by his own acts, and by his acceptance of performance of the substituted agreement, that he was estopped to deny that this covenant had not been performed.

The covenant of the lessee, for himself and assigns, to build houses on the land demised, binds the assignees by express words, and the covenant runs with the land—Dumpor’s case, 1 Smith’s Lead. Cas. 102.

The acceptance of rent, after full notice or knowledge of the failure for which a forfeiture might have been claimed, was a waiver of the forfeiture, which could not afterwards be asserted—1 Smith’s Lead. Cas. 83; Goodright v. Davis, Cowp. 803; Roe v. Harrison, 2 T. R. 225; Ormsby v. Woodward, 6 Barn. & Cr. 519.

It was in evidence that the landlord elected to retain the reversion with its incidents, and continue the lease, without reentering to take the land itself. Slight acts are deemed sufficient for this purpose, and any recognition of a tenancy subsisting after the right of entry has accrued, and the lessor has notice of the forfeiture, will have the effect of a waiver—2 Platt on Leases, 468; Tay. Land. & Ten. §§ 497-8; Coon v. Brickett, 1 N. H. 163; Jackson v. Brownson, 7 J. R. 227; Jackson v. Allen, 3 Cow. 220. A man may be estopped by acceptance of rent—4 Com. Dig. (tit. Cov. A. 3) p. 79.

The principle is not confined to a forfeiture for assigning without license, or for non-payment of rent, but extends to any other ground of forfeiture which merly makes the lease voidable, unless the lessee proceeds to enforce the forfeiture by re-entry. Forfeitures are not favored in the law, and where a forfeiture is once waived, the court will not assist it—Cowp. 803. The clause in this lease which gave a right of forfeiture and re-entry for non-payment of rent and taxes, or for any failure to keep and perform the covenants, agreements and stipulations in lease, did not make the lease absolutely void, but only voidable at the election of the lessor. It may be considered as well established that where an estate in land lias been forfeited by non-performance of conditions at the day, the forfeiture will be waived by accepting performance at a subsequent period; and where a covenant has been broken already, the acceptance of performance of a new agreement substituted in place of it will have the same effect—1 Smith’s Lead. Cas. 88; Chalker v. Chalker, 1 Conn. 79; Clark v. Jones, 1 Denio, 516; Jones v. Carter, 15 Mees. & W. 718.

This covenant for a renewal depended only upon the condition that the lessee or his assigns should pay the rent and taxes, and perform the other covenants ; and the lease was conditioned to be forfeited at the option of the lessor, on notice in writing, upon any failure to keep and perform these same covenants. No forfeiture was enforced during the term. The rents were accepted to the end of the term with knowledge of all causes of forfeiture. The failure to perform the building covenant was certainly well known to him, and the evidence tended strongly to prove that he .had granted an extension of the time; that he was fully aware of the progress and completion of the work; that he complained, negotiated, and arbitrated, concerning it; that, upon urgent solicitation, he had forborne to take any stops to forfeit the lease; and that when the work was finished, though not done exactly according to the new agreement or the provisions of the building covenant, he not only accepted it as a performance and expressed himself satisfied, but certainly forbore ever afterwards to claim any forfeiture on account of a failure to keep and perform that covenant or any other. He stood by and saw the work go on, and encouraged the assignee to expend his money in the completion of valuable buildings, which were to become his property at the termination of the lease and renewals. He knew that the work was done under a full persuasion that it would be accepted as a performance, or in place of a performance, of this covenant. The work was done within about four years of the end of the term; and now, after such acceptance, he insists upon a breach of this covenant as a justification for his refusal to renew the lease, and claims that it had been irrevocably broken before the work began.

It is not to be supposed that the assignee had any expectation that his lease was to end in four years after the erection of these houses, nor that the lessor was not fully aware that he relied upon a renewal of the lease according to its tenor, and depended upon his acceptance as a waiver of all cause of forfeiture and a performance of the covenant. It may as well be said of this waiver as of a waiver of an assignment without license, that to hold otherwise would be “productive of great injustice, and enable a landlord to eject a tenant after he had given him reason to suppose that the forfeiture was waived, and after the latter had, on this supposition, expended his money in improving the premises”—Ormsby v. Woodward, 6 Barn. & Cr. 519; 2 Platt on Leases, 469.

If a man be estopped by the acceptance of rent, and if such acceptance, with knowledge of the previous causes of forfeiture, implies a still subsisting lease, and precludes a forfeiture afterwards for the same causes, why may not the acceptance of performance of this building covenant, or rather of the agreement substituted in the place of it, together with the continued acceptance of rent, be deemed an irrevocable waiver of this cause of forfeiture ?

If the lessor intended to refuse a renewal, why did he not so inform the tenant before he began to build ? or why did he allow him to proceed with the expenditure of his money ? Not to hold that this was not a complete waiver, would be a great hardship upon the plaintiff: and viewing the matters with reference to the whole conduct of the defendant, it would certainly have all the effect, if it did not wear the aspect, of an intentional fraud. When a man by his words or conduct knowingly causes another to believe in the existence of a certain state of things, and induces him to act upon that belief so as injuriously to alter his previous position, the former will be concluded from averring, as against the latter, a different state of things as existing at that time; or asserts a fact upon the faith of which another acts, and will receive damage if the fact be not true, he shall be estopped from contradicting it.—Brown v. Wheeler, 17 Conn. 353. We think the case comes within the doctrine both of waiver and estoppel—1 Greenl. Ev. § 207; Dezell v. Odell, 3 Hill, 215; Townsend v. Empire Stone-dressing Co., 6 Duer, 208.

The defendant cannot now be heard to say that the covenants of this lease had not been fully performed. It matters not that the building covenant had been broken and the term elapsed. The substitution of a new arrangement, even by parol, which was acted upon by both parties and executed to the satisfaction of the defendant, was enough. It is insisted that the proof of this satisfaction was not clear. We do not lay the whole stress upon this admission that he was satisfied. The facts themselves, the acts of the parties, the forbearance to claim a forfeiture, the acceptance of rent, the confiscation of the buildings, speak louder than his express admissions, and are even more satisfactory.

The first instruction given for the plaintiff placed the issue of a waiver by acceptance substantially before the jury on all the evidence bearing upon the question ; and ‘this issue was decisive of the case.

The instructions refused for the defendant proceeded upon a theory of the law which cannot be sustained.

As to damages, the general rule was correctly laid down by the court. It is insisted that the plaintiff was not entitled to recover for the expense of repairs made upon the premises shortly before the end of the first term. This may be so in some cases ; but here it was proper for the jury to consider-as well the value of the improvements made during this first term as the future value of the leasehold in estimating the actual damage sustained by the plaintiff in the breach of the covenant to renew. The evidence tended to prove that the value of the future leasehold with the renewals was about twenty thousand dollars. The expense of re. pairs would seem to have been deducted in the verdict, which was for some sixteen thousand dollars only. We see no reason to think the verdict was excessive.

Judgment affirmed.

The other judges concur.