Hughes v. Donlon

149 Tenn. 506
CourtTennessee Supreme Court
DecidedApril 15, 1923
StatusPublished
Cited by6 cases

This text of 149 Tenn. 506 (Hughes v. Donlon) is published on Counsel Stack Legal Research, covering Tennessee Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hughes v. Donlon, 149 Tenn. 506 (Tenn. 1923).

Opinion

Me. Thomas H. Malone, Special Judge,

delivered the opinion of the Court.

The question in this case which counsel have debated on petition for certiorari with learning and ability is whether a certain clause contained in a lease is a condition, or conditional limitation, or a covenant.

The case was tried below on bill and .demurrer, and the material allegations of the bill are as follows:

It is alleged by the complainant, Walter Hughes: That on June 9, 1920, he entered into a lease contract with the defendant, Frank Donlon, for the rental of certain premises in the city of Memphis, Tenn., for a term of three years, the consideration being $6,840, evidenced by 36 notes of $190 each. That these notes were, on their face, negotiable notes, and did not show the consideration for which they were given.

That the lease contained the following clause:

“It is understood and agreed that the above Walter Hughes is to be given the-first right to buy at an agreed price, which is to' be made at a later date, said price to be made by Frank Donlon, which is to be given in writing and said Walter Hughes is to have ten days to comply. Tenant agrees to vacate in ninety days in the event of the sale to any other party.”

That thereafter the property was offered by Donlon to Hughes at a certain price,'which Hughes refused to accept, and that Donlon thereupon sold the property to the defendant Mrs. M. W. McBee, “on the-day of-1921.”

That on September 5, 1921, complainant, Hughes, having learned of this sale, and of the fact that the lease [509]*509and part of the rent notes had been assigned and delivered to the defendant Mrs. McBee, wrote a letter to John H. McBee, who was the agent of and who was acting for the defendant Mrs. M. W. McBee, “notiying him that, pursuant to the terms of the lease, he would vacate the property on October 1, 1921, .this being within 90 days of the date of sale, and demanding from the said McBee the cancellation of the lease and the delivering up to him, the said Walter Hughes, of the remainder of the rent notes above referred to, maturing on October 1, 1921, and subsequent thereto.”

That in answer to said letter “the defendant Mrs. M. W. McBee did on September 8, 1921, reply that he did not agree with complainant as to his right to vacate said lease, and stated that he had bought the property leáse together with the notes signed by the complainant without ever having seen the lease contract, and that he did not know what it contained, but, upon receipt of complainant’s letter, he had secured a copy of it, and that he contended and would contend that the complainant’s construction thereof was not correct, but, on the other hand, that the clause referred to in said lease was written for the benefit of the owner entirely and not of the lessee, and that he, as the owner, refused to cancel the lease and deliver up the notes to the complainant.”

It is further stated in the bill:

“Complainant is willing to admit the facts as stated in defendant McBee’s letter of September 8, 1921, are true, to wit: That at the time the defendant McBee bought the property from the said Frank Donlon, and also the notes signed by the complainant, without ever having seen [510]*510the lease contract, and at that time he had no actual knowledge as to its contents with respect to the agreement ahoye referred to. Complainant avers, however, that, although the notes on their face do not show that they were rent notes, but were plain negotiable notes, the defendant knew that they were rent notes, and was bound by the terms of the written lease as fully as though he had seen said lease. Neither Donlon nor McBee have at any time demanded possession of said premises, but, on the contrary, contend that said lease cannot be terminated except by their consent, which they have not given, however the complainant vacated said property and notified defendants thereof.” '

It is then alleged:

“That, as above stated, there are now outstanding and in the hands of the defendants 21 promissory notes of $190 each, which are negotiable on their face, and which, if placed in the hands of an innocent purchaser, would be a just and valid indebtedness against complainant, against which he would have no defense, in the event this court should hold that, under the terms of said written lease, he had the right to vacate said property within 90 days, and requiring the delivering up to him of the balance of said rent notes.”

The prayer of the bill is for an injunction preventing the defendants from negotiating or transferring the notes; that the lease be canceled and declared void as of October 1, 1921; that the defendants be required to deliver up to the complainant the rent notes mentioned; and for general relief.

The defendant Frank Donlon demurred to the bill on two grounds:

[511]*511(a) For want of equity.

(b) Because the provision in the lease above quoted with regard to sale of the leased premises merely gave the lessor the right, at his option, to cancel, in event of a sale.

The defendant Mrs. McBee demurs to the bill:

(a) For want of equity.

(b) Because of the provision as to sale hereinabove quoted does not entitle complainant to a cancellation of the lease, being merely a covenant and not a condition.

(c) Because the provision above mentioned was inserted in the contract for the benefit of the lessor, and is not a limitation upon the term of the lease, but a covenant that the lessee would vacate the premises in the event of a sale, when notified so to do by the lessor.

The chancellor sustained the demurrers of the respective defendants, and dismissed the bill, and the case was appealed to the court of civil appeals, which in turn sustained and affirmed the decree of the chancellor.

In his petition for certiorari} the complainant, Hughes, makes two contentions:

(a) That the clause already quoted creates a, conditional limitation, and that upon the happening of the contingency provided for, viz. the sale of the property, the lease terminated ipso facto.

(b) That, if the provision should be construed to be a covenant, the result would be the -same, so far as the tenant is concerned, unless the court should, by construction, extend the language, the contention being that the language would in any event constitute a special limitation upon the term of the lease.

[512]*512On bebalf of the respondents, it is insisted. .

(a) That the bill shows that the defendant Mrs. Mc-Bee was an innocent purchaser for value of the notes in question.

(b) That the present case is ruled by our own case of Sloan v. Cantrell, 5 Cold. 571.

(c) That irrespective of this case the words quoted must be construed merely as a covenant on the part of the lessee; and as conferring a waivable option on the lessor.

1. It may be stated at the outset that the respondents can hardly succeed in their contention that the defendant Mrs. McBee was an innocent purchaser of notes. The case stands here on demurrer, and we have already quoted the language of the bill which charges that “the defendant knew that they were rent notes,” etc.

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149 Tenn. 506, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hughes-v-donlon-tenn-1923.