Plaza Investment Co. v. Abel

153 N.W.2d 379, 8 Mich. App. 19
CourtMichigan Court of Appeals
DecidedFebruary 25, 1993
DocketDocket 2,093
StatusPublished
Cited by16 cases

This text of 153 N.W.2d 379 (Plaza Investment Co. v. Abel) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Plaza Investment Co. v. Abel, 153 N.W.2d 379, 8 Mich. App. 19 (Mich. Ct. App. 1993).

Opinion

Levin, J.

Plaza Investment Company purchased a store and a warehouse building occupied by Peter J. Tomey and Sidney S. Abel, doing business as Abel & Tomey, as tenants, under a written lease with Plaza’s grantor, as landlord.

At the time of conveyance of the property to Plaza the landlord’s interest in the lease was assigned to Plaza. The instrument of assignment did not contain a provision expressing an assumption by Plaza of the landlord’s obligations under the lease.

The lease required the landlord, after receiving written notice from the tenant, to keep the roof in good order and repair.

Shortly after October 1, 1962, the tenant discovered water damage to furniture held in the ware *22 house for sale in the tenant’s business. The tenant thereupon notified the original landlord and some repairs were made, but the leakage of water through the roof continued until cold weather prevented further flow of water. The leakage of water resumed in the spring of 1963, and the landlord was again requested to repair the defective roof, but the condition was not adequately remedied.

Plaza acquired the property on May 7, 1963. Plaza asserts it did not learn'of the request to repair the roof or the defects therein until July 1, 1963, during the course of a meeting between representatives of Plaza and of the tenant. The date on which Plaza did in fact receive this information is not consequential as the tenant’s evidence was that the bulk of the damage to its furniture was suffered in the spring of 1963 and, while there was some damage after May 7, 1963, it was not possible to determine the amount allocable to the period subsequent to that date. 1

The tenant vacated the property in June, 1963, claiming, by reason of various circumstances, it was relieved of its obligations under the lease. This action was then commenced by Plaza seeking damages of $1,440. The trial court determined that Plaza was entitled to recover that amount, but also awarded the tenant on its counterclaim $3,061.21 for injury to its merchandise resulting from the defective roof, or a net recovery for the tenant of $1,621.21. Plaza appealed to the circuit court, which affirmed.

On this appeal by Plaza, the tenant neither cross-appealed nor on brief challenged the trial court’s determination that Plaza was entitled to recover *23 $1,440. Therefore, there is no need to consider the evidence concerning the tenant’s vacation of the premises and the conflicting claims of the parties at the time of trial concerning the tenant’s duty to pay rent.

Plaza’s sole contention on this appeal is that as' a matter of law it is not liable for the damages to the tenant’s property suffered before Plaza purchased the property and acquired the landlord’s interest in the lease.

Since Plaza did not assume its grantor’s unperformed obligations, its liability for the damages awarded the tenant must arise, if at all, because of a relationship between Plaza and the tenant created by the bare assignment to Plaza of the landlord’s interest in the lease.

It is, of course, arguable that Plaza, as the purchaser of the property, having acquired the landlord’s interest in the lease and now seeking to enforce the provisions conferring rights on the landlord, should be responsible for the unperformed obligations of the landlord under the lease, and the tenant should not be required to maintain a lawsuit for breach of a landlord’s covenant against the former owner who may have even departed the jurisdiction. However,'we do not write on a clean slate — “the law as to leases is not a matter of logic in vacuo; it is a matter of history that has not forgotten Lord Coke.” Per Holmes, J., Gardiner v. William S. Butler & Company, Inc. (1917), 245 US 603, 605 (38 S Ct 214, 62 L ed 505, 506).

In medieval England there were various restrictions on the transferability of rights embodied in documents. It was at one time thought, we are told, that there was some limitation on the right of a voluntary transferee of the reversion to enforce lease covenants. While the extent of these disabilities • *24 has been questioned, 2 it is history that, in order to facilitate the transfer of confiscated monastery land that had been demised for a term of years, there was enacted the statute of 32 Henry VIII, c 34, extending to transferees of the reversion, and to assignees of the term as well, the right to enforce lease covenants. 3

Despite the generality of the language used in the English statute, its operative effect has been limited to certain covenants described in Spencer’s Case, i. e. those that “touch and concern” the property and, thus, run with the land — a covenant to keep in repair is indisputably such a covenant. 4

It is now established that upon a conveyance of the landlord’s entire interest in leased property that the privity of estate formerly existing between the original landlord and the original tenant is at an end, and the benefits and burdens of all covenants running with the land pass to the transferee who, as a result of such transfer, comes into privity of *25 estate with, the tenant; bnt this change of parties to the estate does not terminate the contractual relationship between the original landlord and the original tenant, which contractual relationship continues. 5

These principles are so. firmly embedded in the law of this State 6 that it would be academic to consider in this context whether the English statutes of general application are part of the common law of this State, 7 even though some of the cases referred to in this opinion (see, for example, footnote 3) proceed on the assumption that 32 Henry VIII, c 3á is part of the local law.

That a transfer of the landlord’s interest in a lease does impose and confer on the transferee duties and rights formerly those of the transferor is clear, but it does not follow that the transferee must answer for damages resulting from a breach prior to the transfer.

*26 Notwithstanding the expansive language of the English statute, it has frequently been said that a successor to the interest of a landlord or tenant is not liable' for breaches by his predecessor and may not sue for breaches by the other party preceding the transfer or assignment. 8

The rule that a transferee of the reversion is not answerable for a breach of a lease covenant committed prior to the tranfer is well supported. 9

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Bluebook (online)
153 N.W.2d 379, 8 Mich. App. 19, Counsel Stack Legal Research, https://law.counselstack.com/opinion/plaza-investment-co-v-abel-michctapp-1993.