American Jewelry Co. v. Barrs Self-Driver Co. ( 1933 )

Plaintiff in error, The American Jewelry Company, brought suit against the defendant in error, Barrs Self-Driver Company, Inc., for the recovery of rents for the months of June and July, 1932, at the rate of $275 per month, under the terms of a written lease entered into between the parties.

The United Cigar Stores Company of America was the holder of the paramount title to the premises. It leased the premises to the plaintiff jewelry company. The jewelry company sub-let a portion of the premises to the Barrs Self-Driver Company.

It appears that on or about the eleventh day of July, 1932, The United Cigar Stores Company of America notified both the jewelry company and the Barrs Self-Driver Company to vacate the premises by July 15, 1932, for the reason that the jewelry company had breached its lease by failure to pay its rents, taxes, etc. The Barrs Self-Driver Company, acting under the notice, did vacate the premises July 12, 1932, claiming the right to do so, in that the notice was a constructive eviction.

The defense tendered in court at the trial full payment of rent up to and including July 12, 1932, which was at the rate of $40 per month less than the monthly rental under the Barrs Self-Driver re-lease.

The trial court rendered judgment in favor of the Barrs Self-Driver Company, but held that it, the Barrs Self-Driver Company, was liable for rent at the rate of $275 per month under the terms of the written lease, instead of liable at the rate of $235 per month, which was $40 less per month than the lease called for.

From this judgment, the jewelry company prosecutes error to this court. Its claim is that there was no constructive eviction; that it had prior to the surrender of the premises by the Barrs Self-Driver Company settled its back rents with the paramount title holder.

We are of opinion that the trial court's judgment was correct as to amount. The claimed reduction in the rent was oral, and the terms of the lease will not be varied by an oral agreement.Cromwell v. Bissinger Candy Co., 13 Ohio App. 216, 32 O.C.A., 46.

On the question of constructive eviction the law is that such notice, if properly given, is constructive eviction; that it is not necessary for the tenant to wait until ejectment proceedings are instituted.

The facts are: On July 11, 1932, the day the notice to vacate was served, the jewelry company was in default for several months rent. It was also in default for taxes and expenditures required under the lease. Suit had been instituted by the paramount title holder against the jewelry company to recover for these defaults. The Barrs Self-Driver Company knew of these defaults in payments by the jewelry company, having been so informed by the president of the jewelry company, as well as by publication of notice through institution of the suit.

The jewelry company seeks to escape the situation, so far as it constitutes constructive eviction, by reason of its arrangement with the agent of The United Cigar Stores Company concerning the rents and charges. Its claim is evidenced by the following receipt:

"Cincinnati, Ohio, July 11, 1932.

"Received from The American Jewelry Company a check for $350.00 to be applied to the account of indebtedness due the United Cigar Stores Company of America, to-wit: rent due to July 1, 1932, amounting to $1350.00, water rent in the sum of $2.00 plus June, 1932, taxes of $117.63, which, however, is to be applied only if the proposition of $1,000.00 cash made by said The American Jewelry Company is accepted by the United Cigar Stores Company, which, if accepted, the balance of the aforesaid indebtedness is to be charged against the security deposited with the United, The American Jewelry Company to pay rent at the rate of $400.00 per month beginning with the July, 1932, rent, for the balance of the terms of the lease with the United Cigar Stores Company, however, receiving a credit of $100.00 per month on said rent until the security is consumed.

"If the aforesaid proposition is not accepted by the United Cigar Stores Company of America, the proceeds of said check of $350.00 is to be considered payment for remaining in the premises from date to August 1, 1932, at which time judgment may be taken in a suit for forcible entry and detainer.

"The United Cigar Stores Company of America "By Walter M. Schoenle Its Attorneys. "The American Jewelry Company "By __________________ President."

This receipt, however, does not show any settlement executed at the time. Notwithstanding the receipt, The United Cigar Stores Company, on the same day, through its agent, served written notice on both the jewelry company and the Barrs Self-Driver Company to vacate. The Barrs Self-Driver Company had no knowledge of any settlement or attempted settlement or execution of the receipt. If the receipt should be considered as equivalent to the paying up of the back rents and charges by the jewelry company, it only recites that the jewelry company gave a check for certain back rents, which were receipted for by the company as such, and not as payment. The acceptance of this was contingent upon the acceptance of the proposition by the paramount title holder, The United Cigar Stores Company.

As above stated, the Barrs Self-Driver Company knew nothing of this proposition. It had a right to rely on the situation that existed when it received the notice. It knew the jewelry company was subject to eviction, and notice to it was constructive eviction, unless the same was withdrawn by the paramount title holder. Under these facts the Barrs Self-Driver Company had a right to consider itself constructively evicted, and had a right to surrender the property. Subsequent acts without notice would not deprive the Barrs Self-Driver Company, under the law, of the right to vacate and surrender the property, and it was not required to await future action in the way of ejectment proceedings.

It must be borne in mind that the lease from the plaintiff to the defendant was made, by its terms, subject to all the restrictions, conditions, and covenants contained in the lease from The United Cigar Stores Company, holder of the paramount title, to The American Jewelry Company. The rule is laid down in Thompson on Real Property, Vol. II, page 344, Section 1254, wherein it is stated:

"In an action for breach of covenant for quiet enjoyment, it is not necessary for lessee to prove an actual forcible conviction [eviction]. Proof of demand for possession by persons holding a title paramount to that of the landlord, and surrender of possession in acquiescence to such demand entitles the tenant to a recovery. So lessees have a right to yield to a demand for possession by one having a paramount right without losing their remedy against their lessors on the covenant for quiet enjoyment. If the landlord had no right to lease, tenants need not wait until they are evicted by judgment. They may yield to a paramount title without suit, and will be discharged from further obligation to pay the rent reserved in the lease."

This rule applies with full force to the case under consideration. Under this rule not only could the Barrs Self-Driver Company have the right to yield to the paramount title, but might also maintain an action against its lessor for breach of the covenant for quiet enjoyment of its lease. However, no such relief was asked by the defendant and it is not in the case.

Judgment affirmed.

CUSHING and ROSS, JJ., concur.