Thomas M. Whetstone et al., Respondents, v. J. R. McCartney, Appellant

Kansas City Court of Appeals1888-11-19

32 Mo. App. 430

Summary · law.co

Holding. The defendant remains liable under his express covenant to pay rent for the entire lease term despite assigning the lease with the lessor's consent and the lessor's acceptance of rent from the assignees. The judgment was affirmed in part, reduced to eighty-one dollars.

The plaintiffs leased real property to the defendant for two years under a lease requiring quarterly rent payments of seventy-five dollars. The lease contained a clause permitting the defendant to assign the lease if he guaranteed the rent. The defendant assigned the lease to two other parties, whom the plaintiffs accepted as tenants by collecting rent from them. When the final three months' rent went unpaid by both the defendant and his assignees, the plaintiffs sued. The trial court dismissed the assignees from the case but found the defendant liable.

The defendant argued that the clause allowing assignment with a guarantee meant he should be treated as a guarantor rather than a direct obligor, thereby limiting his liability. The court rejected this interpretation, finding that the first clause of the lease constituted an express covenant to pay rent for the entire lease term. Under contract law, such express covenants bind the original promisor regardless of whether the lessor consents to an assignment and accepts rent from the assignee. The court concluded that the guarantee clause merely restated what the law already required—that the defendant remain liable even if he substituted other tenants.

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

Key issues

Whether an express covenant to pay rent survives assignment of the lease when the lessor consents and accepts rent from the assignee
Interpretation of a lease clause permitting assignment conditioned on the lessee's guarantee of rent
Privity of contract versus privity of estate in landlord-tenant liability

Procedural posture

The defendant appealed from a trial court judgment entered in favor of the plaintiffs in an action for unpaid rent, with the assignees dismissed from the case at trial's close.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Ellison, P. J.

— Plaintiffs having recovered below, defendant brings the case here asking a reversal of the judgment.

The case shows that plaintiffs leased to defendant certain real property for two years by an instrument which contained the following clause: “For the use and rent thereof, the said J. R. McCartney hereby promises to pay to said Whetstone Bros., or to their order, six hundred dollars, for the whole time above stated, and to pay seventy-five dollars every three months.” Also the following clause : “In the event that said McCartney should desire to sell his lease, the Whetstone Bros, agree to give him privilege to do so by the said McCartney guaranteeing the rent for the time.” Pending the term, defendant assigned the lease to W. H. Longmore and W. W. Maupin, and plaintiffs recognized them as tenants by accepting rent from them.

This suit is for the last three months rent which both defendant and his assignees have refused to pay; and was originally instituted against defendant and the assignees, being dismissed as to the latter at the close of the trial.

There are two ways in which a lessee may be liable to his lessor ; one arises from his express covenant to pay whereby he is held in privity of . contract; the other arises, in the absence of an express covenant to pay rent, on an implied obligation, whereby he is held in privity of estate. In the latter case, if he parts with the estate, with consent of lessor, thereby destroying the privity, there is no further obligation to pay rent, since there is nothing upon which to base the obligation. But if he has expressly covenanted to pay, the contract lasts till discharged and the covenant may be said to run with the land, and this is so, even though the lessor has consented to the assignment by the lessee and accepted rent of the assignee.

The assignee is likewise liable to the original lessor for the term he occupies, not by reason of a promise, but by reason of the privity of estate. And the lessor may pursue one, or both, at the same time, though he will be entitled to but a single satisfaction. Taylor’s Landlord & Ten. sec. 438; Boot v. Wilson, 8 East, 311; Wadham v. Marlow, 8 East, note; Stains v. Morris, 1 V. & B. 11; Arthur v. Vanderplank, 7 Mod. 198; Thursby v. Plant, 1 Saunders, 237; Taylor v. DeBus, 31 Ohio St. 468; Sutliff v. Atwood, 15 Ohio St. 186; Lodge v. White, 30 Ohio St. 569; Port v. Jackson, 17 Johns. 239 and 479.

These observations will, I think, be of material aid in determining the question raised here as to the proper interpretation of the clause of the lease last quoted. Defendant contends that this clause is one of technical guaranty and that therefore he is not liable as an original promisor. My opinion is that it is merely a cautionary clause, or a reiteration of the first. The first clause (quoted) amounts to an express covenant to pay the rent for the period of the lease, and as such, as we have seen, it binds defendant by express contract, notwithstanding the assignment and acceptance of rent. This being so, I cannot bring myself to conclude that it was intended by the last clause to annul the first and substitute the collateral or contingent liability of a guarantor. It is far more reasonable to suppose that the parties, seeing they had agreed there might be a substitution of tenants, only stated in terms in the second clause what the law put upon them under the provisions of the first. It was like this : It is agreed you may substitute tenants, but you cannot substitute liability.

I perceive no merit in the objection to the dismissal of the suit at the close of the trial, as to the assignees. Defendant and the assignees were each clearly liable under the views above presented. Whether they should have been joined in one action, or been pursued in separate actions, need not be considered, as they had been separated by the dismissal.

The plaintiffs enter remittitur for the amount of the judgment in excess of eighty-one dollars, and for this sum the judgment will be affirmed.

All concur.