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I. COHEN v. THOMAS W. TODD and Others

Minnesota Supreme Court1915-07-02No. Nos. 19,277—(185)
130 Minn. 227

Summary

Holding. The court affirmed the judgment, holding that an assignee of a lease who made a naked assignment without assuming contractual obligations is liable for rent only during the period he held the estate; once he reassigned and surrendered possession, his liability ceased because privity of estate was destroyed and no legal basis for continued liability existed.

A leaseholder assigned his interest to the defendant, who later made a second assignment and surrendered possession to another assignee. The original leaseholder then sued the defendant for rent that accrued after the defendant transferred his interest away. The court held that the defendant's liability for rent ceased once he reassigned the lease and relinquished possession because his obligation was grounded solely in his occupancy of the property, not in any contract he had assumed. Once privity of estate ended, no legal basis for liability remained.

The plaintiff also argued that the defendant's second assignment was never valid because it lacked the lessor's written consent, as required by the lease. However, the court found that the lessor waived the consent requirement through his conduct. After learning of the second assignment, the lessor accepted rent payments from the new assignee for several months, which constituted an implied waiver of the written consent provision and recognition of the new tenant.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether an assignee remains liable for rent accruing after he reassigns the lease and surrenders possession
  • Whether liability for rent is based on privity of estate or on express contract assumption
  • Whether a lessor waives the requirement of written consent to assignment through conduct

Procedural posture

This action to recover rent was brought against an assignee of a lease for rent obligations that accrued after the assignee had reassigned the lease and delivered possession to a subsequent assignee.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Hallam, J.

1. This is an action to recover from an assignee of a lease rent which accrued after he had made a reassignment and delivered up possession to a second assignee. The action cannot be maintained. The assignment to defendant was a naked assignment. Neither by the terms of the assignment, nor in any other manner, did defendant assume any contract obligation to pay rent. As long as he held the property under his assignment the law required him to pay rent according to the terms of the lease. But when he again assigned the term and delivered up possession to a second assignee, his liability for rent thereafter to accrue ceased. This has been the rule of the common law consistently followed for more than 200 years. Pitcher v. Tovey, 4 Mod. (Eng.) 71; Valliant v. Dodemede, 2 Atk. (Eng.) 546; Taylor v. Shum, 1 B. & P. (Eng.) 21; Tiffany, L. & T. 1131; 2 Underhill, L. & T. 1090; Johnson v. Sherman, 15 Cal. 287, 76 Am. Dec. 481; Patten v. Deshon, 1 Gray (Mass.) 325, 329; Consumers Ice Co. v. Bixler & Co. 84 Md. 437, 35 Atl. 1086; Durand v. Curtis, 57 N. Y. 7; Washington N. Gas Co. v. Johnson, 123 Pa. St. 576, 16 Atl. 799. The rule is founded on sound reason. The assignee having assumed no contract obligation cannot be sued on contract. His liability during the time he holds under the lease is founded on privity of estate. After he has surrendered the premises either to the lessor or to another assignee there is no longer privity of estate. There is then no principle of law or equity upon which to predicate liability for rent to accrue, and liability no longer exists. This is but . an application of the general principle that an assignee of a lease is liable on covenants running with the land, but, .being liable solely in privity of estate, he is liable only for obligations maturing or breaches occurring while he holds the estate as assignee, and not for those which occurred before he became assignee or after he ceased to be such. Trask v. Graham, 47 Minn. 571, 50 N. W. 917.

2. Plaintiff contends that the assignment by defendant to his assignee never became operative. A covenant of the lease forbade any assignment of the term without the written consent of the lessor. The lessor consented in writing to the first assignment, that is, to the assignment made by the lessee to defendant, but did not consent in writing to the assignment made by defendant. Defendant contends that the covenant against assignments, except with the written .consent of the lessor, has no application to a second assignment made by the lessee’s assignee. We need not concern ourselves with that question. The fact is the lessor knew of the assignment by defendant, and after it was made he collected rent for several months from defendant’s assignee and other successive assignees. A covenant against assignments without the written consent of the lessor is one inserted for the lessor’s benefit, and he may waive the requirement of written consent by his conduct. 1 Tiffany, L. & T. § 152; Taylor, L. & T. (9th ed.) §§ 411, 412, 497; The “Elevator Case,” 17 Fed. 200; Warner v. Cochrane, 128 Fed. 553, 63 C. C. A. 207; Livingston Co. Tel. Co. v. Herzberg, 118 Ill. App. 599. When, with knowledge of the second assignment, he receives rent from the second assignee, such conduct, unexplained, is conclusive evidence of a, waiver, for it is a recognition of the assignee as a tenant. 2 Underhill, L. & T. § 630; Randol v. Tatum, 98 Cal. 390, 33 Pac. 433; Colton v. Gorham & Mundy, 72 Iowa, 324, 33 N. W. 76; O’Keefe v. Kennedy, 3 Cush. (Mass.) 325; Porter v. Merrill, 124 Mass. 534; Murray v. Harway, 56 N. Y. 337, 342; Field v. Copping, A. & S. 65 Wash. 359, 118 Pac. 329; Adams v. Shirk, 117 Fed. 801, 55 C. C. A. 25; Waldron v. Hawkins, 32 L. T. (Eng.) 119. After receiving rent from the assignee with knowledge of the assignment, the lessor could not with either consistency or good faith assert that an assignment was never made.

Judgment affirmed.