Miller v. Pond

183 N.W. 24, 214 Mich. 186, 17 A.L.R. 179, 1921 Mich. LEXIS 639
CourtMichigan Supreme Court
DecidedJune 6, 1921
DocketDocket No. 85
StatusPublished
Cited by12 cases

This text of 183 N.W. 24 (Miller v. Pond) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Miller v. Pond, 183 N.W. 24, 214 Mich. 186, 17 A.L.R. 179, 1921 Mich. LEXIS 639 (Mich. 1921).

Opinion

Steere, C. J.

Plaintiff instituted summary pro[188]*188ceedings before a circuit court commissioner of Genesee county to recover possession of certain leasehold premises known as No. 527 South Saginaw street in the city of Flint. The case was re-tried on appeal to the circuit court of Genesee county before the court without a jury on stipulated facts, and judgment rendered for defendant. So far as material to the question raised, it was shown that prior to January 6, 1920, plaintiff was owner by assignment from the lessor of a written lease given by Sarah E. Burr of Flint to Charles E. Ische and Will Ische dated January 10, 1911, running for five years with the privilege of renewal for an additional five years from January 10, 1916. They were partners when the lease was made and thereafter in possession of the leased premises operating a shoe store under the firm name of Ische Brothers. The lease runs to “Ische Brothers, Will Ci Ische and Charles E. Ische, copartners.” The property leased is described as “The first floor and north half of the basement of store building at number 527 S. Saginaw street, second ward of Flint,” the same “to be occupied for a general shoe store” at a rental of “one thousand dollars each year, payable monthly in advance,” and in case the provided privilege of re-lease for five years more is exercised the rental is specified as “the sum of six thousand dollars, payable twelve hundred dollars each year, payable monthly in advance.” The lessees are required to keep the premises in repair, etc. 'The instrument also provides :

“Said parties of the second part further covenant that they will not assign nor transfer this lease or sublet said premises, or any part thereof, without the written assent of said party of the first part.” * * *

It further contains the customary provision that in case rent is not paid when due—

[189]*189“Or if default shall be made in any of the covenants herein contained, then it shall be lawful for said party of the first part, her certain attorney, heirs, representatives and assigns to re-enter into, re-possess the said premises, and the said parties of the second part, and each and every other occupant to remove and put out.”

On January 6, 1920, the Ische' Brothers sold to defendant Elwyn Pond a two-thirds interest in their stock of goods, for which bill of sale was given, and took him into partnership with them. By the papers which they executed the shoe business was to be continued under the firm name of Ische Brothers at 527 South Saginaw street for the term of one year and four, days, Pond to act as manager, for which he was to draw $25 per week, and the Ische Brothers were to “act only in an advisory capacity” in the management of the business. No mention was made of the lease in the papers which they executed between them. On learning of the agreement between Ische Brothers and defendant Pond plaintiff gave notice of forfeiture of the lease “for breach of the covenant against subletting and assigning,” and demanded possession of the premises from the three partners. On their failing to surrender possession the summary proceedings involved here were instituted.

The trial court filed an opinion holding that while inferable Pond “was given an interest in the lease,” he was not shown to be an assignee of the lease, and under the facts stipulated his joint occupation of the premises with the Ische Brothers as a partner for conduct of the business carried on there did not render him guilty of unlawful possession of the premises. Plaintiff’s right to review was preserved by requests, objections and exceptions timely made.

The question involved and argued by counsel is whether taking Pond into partnership, selling him an interest in the stock with a proportionate share in the profits and committing to him management of the [190]*190business then being conducted on the leased premises with the other members of the firm yet acting in an advisory capacity, violated the covenant in the lease against assigning or transferring the same or subletting the premises, or any part thereof, without written consent of the lessor.

Appellant’s contention is squarely planted in the brief of his counsel upon the proposition that “taking in a partner to a lease violates the covenant against assignment,” which it is asserted all authority holds, that whether it violates a covenant against subletting is not involved and cases cited to that point do not apply. While counsel for defendant insists the adjudicated cases hold that under a similar covenant to that found in the lease under consideration taking a partner into a business, or trading firm, as done here, does not violate a covenant against either assigning or subletting.

In approaching the subject we are confronted with the general rule that forfeitures are not favored in law, especially when they divest estates, and restrictions in leases against assignments or subleases, as also other conditions in contracts providing for disabilities and forfeitures, are to- be given a strict construction against those-for whose benefit they are introduced when of questionable import or in any wise open to construction. Upon that point, and for illustration covering the question before us, it is said in White v. Huber Drug Co., 190 Mich. 212:

“It has been said, however, that covenants against assignment or underletting are not favorably regarded by the courts and are liberally construed in favor of the lessees. But this means only that the scope of the term ‘assignment’ will not be enlarged by the courts, and that the covenant. will not be considered as violated by any technical transfer that is not fairly and substantially an assignment j as where a tenant without license from his landlord takes a third party into [191]*191partnership and lets such party into joint possession with him.”

Counsel for plaintiff urges that this recognition of the rule defendant contends for was irrelevant to the issue in that case and mere dictum, necessarily no stronger than Roosevelt v. Hopkins, 38 N. Y. 81, cited as authority for the doctrine, which it is argued does not go that far but was decided on the ground that the prohibition against assignment was not intended to interdict transactions between partners.

In the White Case the charged violation of a restriction in the lease under consideration was an assignment by one corporation to another, and it may be conceded what was said as to partners was only illustrative. It is, however, the interpretation of the Roosevelt Case sustained by recognized authority as follows:

“Where the lessee is a firm a mere change in partners which compose it, or the taking in of a new partner is not a breach of a condition against an assignment. Nor is such conduct on the part of the lessee a subletting.” 2 Underhill on Landlord and Tenant, p. 1050.
“The covenant (not to assign) is not broken by associating others with the lessee in the enjoyment of the term; as by changing the membership of a firm.” 1 McAdam on Landlord and Tenant (3d. Ed.), §141.
“A condition against subletting or assignment is not broken where the tenant takes another into partnership with him and lets such person into joint possession of the premises.

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Cite This Page — Counsel Stack

Bluebook (online)
183 N.W. 24, 214 Mich. 186, 17 A.L.R. 179, 1921 Mich. LEXIS 639, Counsel Stack Legal Research, https://law.counselstack.com/opinion/miller-v-pond-mich-1921.