Stott Realty Co. v. United Amusement Co.

Fellows, J.

(after stating the facts). The reentry by the landlord, the eviction of the tenant either by the landlord or by a title paramount to his, terminates the relations of landlord and tenant, and puts an end to the right of the landlord to recover rent thereafter accruing. Rent is the amount agreed to be paid for the use and enjoyment of the land, and the occupation of the land is the consideration for it. If the right to the occupancy of the land is terminated by the act of the landlord in' evicting the tenant, the obligation to pay rent ceases. Wreford v. Kenrick, 107 Mich. 389 ( 65 N. W. 234 ); Kuschinsky v. Flanigan, 170 Mich. 245 ( 136 N. W. 362 , 41 L. R. A. [N. S.] 430, Am. & Eng. Ann. Cas. 1914A, 1228); Jones on Landlord and Tenant, § 364; 1 Underhill on Landlord and Tenant, § 394. It follows that an action by the landlord cannot be maintained for rent after eviction, but it does not necessarily follow that parties may not by their contracts obligate themselves in such a manner as that an action technically upon the covenant to pay rent may not survive the re-entry. There is nothing unlawful about such contracts, and the courts have quite uniformly enforced such provisions. It was said in the early case of Ball v. Gould, 13 N. Y. 127 :

“Taking all the provisions of the lease together, it was manifestly the intention of the parties that in case of a breach by the lessee, or any one under him, of the covenant ‘that he would not himself, nor would he allow any one else to make use of the premises for any kind of disreputable business, including the keeping of a retail grocery of liquors,’ and a re-entry by the lessor for such breach, the lessee should remain answerable for any loss of rent to the lessor. This is necessarily involved in the provision that in case of re-entry the lessor- was to relet the premises for the benefit of the lessee. This being the agreement of the parties by an instrument under their seals, providing for the exact case which has happened, I do not see upon what ground a court can refuse to hold them to *691 its terms. ■ It certainly is not an illegal agreement, nor is there anything unreasonable nr a lessee agreeing^ to completely indemnify his lessor for any injury^ which may arise to him by. the lessee’s breach of his own agreement.”

In Woodbury v. Sparrell Print, 187 Mass. 426 ( 73 N. E. 547 ), it was said:

“One of the provisions of the lease on which the plaintiffs’ claim is founded is as follows: ‘And, in case of such determination [of the lease by the lessor for a breach of the covenants] the lessee shall be liable to the lessor for all loss and damage sustained by the lessors on account of the premises remaining unleased, or being let for the remainder of the term for a less rent than that herein reserved.’ The second ground of demurrer is that the claim in the bill is for ‘rent and loss of rent.’ This stipulation is an agreement, which is binding as a contract in the nature of á covenant, to pay the lessors the amount of their loss or damage on account of the premises remaining unleased after a determination of the lease for a breach of the covenants. It also includes an agreement to pay for the loss, if any, on account of the premises being let at a less, rent for the remainder of the term. The liability thus created is as much contractual as the obligation under the covenant to pay the rent monthly.”

Speaking on this question, the supreme court of Illinois said, in the case of Grommes v. Trust Co., 147 Ill. 634, 643 ( 35 N. E. 820, 822 , 37 Am. St. Rep. 248 ):

“There is nothing illegal or improper in an agreement that the obligation of the tenant to pay all the rent to the end of the term shall remain notwithstanding there has been a re-entry for default; and, if the parties choose to make such an agreement, we see no reason why it should not be held to be valid as against both the tenant and his sureties. The guarantors in this case agreed that the tenant should pay all rents to be by him paid ‘according to the terms and conditions of said lease for and during the entire term thereof.’ It may not be strictly accurate or correct to call the money to be paid after re-entry rent, or to *692 treat the lease as in force after a re-entry. But the parties have a right to fix the amount of the rent to accrue according to the terms of the lease, as the amount of damages to be paid by the tenant in case of a breach of his covenants. It can make but little practical difference whether the sum agreed to be paid be called rent or damages. It may be regarded as damages for the purposes of this suit.”

Numerous authorities might be cited to the same effect, but we content ourselves with citing the following: 1 Underhill on Landlord and Tenant, § 394; Heims Brewing Co. v. Flannery, 137 Ill. 309 ( 27 N. E. 286 ); Edmands v. Drug Co., 191 Mass. 123 ( 77 N. E. 713 ); Longobardi v. Yuliano, 33 Misc. Rep. 472 ( 67 N. Y. Supp. 902 ); Peabody v. Beatty Co., 69 Misc. Rep. 582 ( 125 N. Y. Supp. 349 ); Michaels v. Fishel, 169 N. Y. 381 ( 62 N. E. 425 ).

If from a consideration of the entire contract we are satisfied that the defendant obligated itself to indemnify the plaintiff from any loss which might arise to it by reason of the breach of the covenants, and this notwithstanding re-entry by the landlord, then the re-entry and eviction is not a bar to this action. In considering the contract in question, it should be .stated that, while the word “forfeiture” appears in one paragraph of the lease, there is no provision in it that default in any of its provisions shall work a forfeiture, or that it shall be void and of no effect, or provisions of similar purport frequently found in leases; the absence of a provision of this character is a significant fact to be considered in the construction to be given this contract.

An examination of section 20, above quoted, shows that it provides that in case of default the lessor may re-enter and repossess the premises, and may deduct from the sum in its hands all sums due it, and “may bring suit for and collect * -* * all damages sustained by said lessor on account of the breach of the *693 lease by said lessees.” The word “and” is used in each instance instead of the word “or.” This of itself clearly indicates an intention of the parties to preserve to the lessor all its remedies therein named rather than giving the right to an election of one of them to the exclusion of the others, as the law might give in the absence of any provision. Section 23 also provides that the remedies shall be cumulative and not exclusive. Unless we give to these provisions of the contract the effect contended for by the plaintiff, they are meaningless. Unless we construe them as preserving the liability of the lessee for breach of the contract, notwithstanding the re-entry, they have no force, and might as well have been omitted.

If this contract had provided for a recovery of liquidated damages, it would have preserved the liability of the lessee, notwithstanding the re-entry (Peabody v. Realty Co., supra); if it had provided therein for the payment of such specific damages as would be recoverable for a breach of the covenant to pay rent, the liability of the lessee would have survived the eviction (Woodbury v. Sparrell Print, supra). Instead of doing either, it provided for a recovery of all damages sustained by the plaintiff on account of the breach of the lease by the lessees. We are unable to distinguish on principle the contract in the instant case from those in the cases cited.

We must consider this contract in its entirety. By its terms the plaintiff not only agreed to lease the premises for a period of 10 years, but it also agreed to, and did at an expense of over $150,000, erect thereon a building designed for a special purpose, a building which both parties must have known and understood would be available to only a limited class of tenants. The erection of such a building was one of the considerations for the covenant to pay rent. Heims Brewing Co. v. Flannery, supra.

*694 We conclude from the provisions of this contract to which attention has been called that the lessees therein obligated themselves to indemnify their lessor for all damages occasioned by breach of the covenants of the lease, notwithstanding re-entry and eviction; the defendant having assumed the liability of the lessees is answerable in this action.

The eviction was a lawful one. The undisputed, testimony shows that neither rental nor indemnity insurance had been taken out by defendant as required by the provisions of the lease, that the president of plaintiff requested the officers of the defendant that the insurance be furnished, but that the company had been in default as to these clauses for more than 30 days. The undisputed testimony also showed that defendant was in default as to other provisions of the lease, and had been for more than 30 days. No notice of the default was. required by the terms of the contract. The re-entry was a peaceable one, and lawful. Smith v. Loan & Building Ass’n, 115 Mich. 340 ( 73 N. W. 395 , 39 L. R. A. 410, 69 Am. St. Rep. 575 ) ; Alexander v. Hodges, 41 Mich. 691 ( 3 N. W. 187 ); Pendill v. Mining Co., 64 Mich. 172 ( 31 N. W. 100 ). Defendant bottomed its defense upon the eviction, and in its pleadings set up the notice given it on January 20, 1914, and its surrender of the premises pursuant thereto. This was an admission by the defendant.. Circuit Court Rule 23, § 6. The plaintiff had not waived these defaults.

There was no question of fact in the case for the jury, nor is the defendant upon this record in a position to raise this, or any question other than those already discussed. It follows that the judgment, should be, and it is, affirmed.

Kuhn, C. J., and Stone, Ostrander, Bird, Moore, Steere, and Brooke, JJ., concurred.