Houston Ice & Brewing Co. v. Keenan , 99 Tex. 79 ( 1905 )

On the 9th day of June, 1902, appellee by written contract leased to appellant a certain building in Waxahachie, Ellis County, Texas, for the term of three years, to begin June 1, 1903. Appellant agreed to pay as rent for the use of said building the sum of $2,100.00 in quarterly installments of $175.00 each. It was stipulated in the lease "that said premises shall be used for the saloon business." After the execution and delivery of the lease and before the term thereof began an election was ordered by the Commissioner's Court of Ellis County, under what is known as our "local option" statute, and held throughout the county, to determine whether or not the sale of intoxicating liquors should be prohibited in that county. The election resulted in favor of prohibition and local option became effective in said county on October 11, 1902. Appellant claimed that the stipulation in the lease that the demised premises should be used for the saloon business constituted an express covenant that said premises should be used for no other purpose, and that, inasmuch as such use became illegal by the adoption of local option in Ellis County, it was absolved from liability for the agreed rent. Taking this view of the matter appellant notified appellee that it could not carry out the agreement, refused to occupy the leased building or to pay the rent.

Appellee insisted on the validity of the lease contract, tendered the building and demanded payment of the rent in accordance with the terms of the contract, which being refused this suit was brought to recover the first installment thereof. Judgment having been rendered for appellee, appellant appeals.

We think it must be conceded that the stipulation in the lease that the premises should be used for the saloon business amounted to a covenant on the part of appellant to use them for no other purpose. The particular use to which the building was to be put having been specified, a restriction against other uses will be implied and the lease need not contain an express covenant imposing such restriction. In such case the lessor may invoke the preventive powers of a court of equity to restrain the lessee from making any use of the premises inconsistent with the terms of the contract. DeForest v. Byrne, 1 Hilton (N.Y.), 43; 18 Am. Eng. Ency. Law, 635, Title Leases, subtitle, "Express restriction upon the use;" 1 Taylor on Landlord and Tenant, 494; Spalding Hotel Co. v. Emerson, 72 N.W. Rep. (Minn.), 119.

Having restricted the use of the building to the "saloon business" or sale of intoxicating liquors, the question is presented: Was the lease contract terminated and appellant absolved from liability for the rents therein agreed to be paid, by reason of the adoption of local option in Ellis County? In so far as we are advised this question has not been passed upon by any of the courts of this state. The general rule has been broadly stated to be, that where the performance becomes impossible subsequent to the making of the contract the promisor is not thereby discharged. But to this general rule there is a well established exception viz: that where the performance becomes impossible by a change in the law the promisor is discharged. The facts, however, in our opinion do not bring the case at bar within the exception. Nor does it become necessary to apply the general rule stated in all its rigor to justify the conclusion we have reached. For the purposes of this case it may be asserted that when a party voluntarily undertakes and by contract binds himself to do an act or thing, without qualification, and performance thereof becomes impossible by some contingency which should have been anticipated and provided against in the contract, the nonperformance will not be excused. In such case the party's failure to exempt himself from responsibility in the event of the happening of the contingency will be attributable to his own folly and he will be held to make good his contract.

Applying these latter principles, we think that the prohibition of the sale of intoxicating liquors in Ellis County under our local option statute furnishes appellant no legal excuse for its failure to pay the rent sought to be recovered in this action. The stipulated use to which the demised premises were to be put was entirely legal when the lease contract was executed. That such use might become illegal was a probability well known to appellant at that time. The statute authorizing and under which the sale of intoxicating liquors was prohibited in Ellis County had been enacted and was an existing law at the time the lease was made. It was only necessary for the people to pursue the course pointed out by its provisions in order to put the law in operation in that county and avail themselves of its benefits. This event appellant must have known was likely to occur, and that if it did the performance of the stipulation in the lease under discussion would be prohibited.

Appellee had no interest in the business to be conducted in the leased building and appellant knew that by a vote of the people under the existing statute referred to, the "saloon business," which included the sale of intoxicating liquors, might be prohibited before the beginning of the lease term. This was a probable contingency which an ordinarily prudent man should have foreseen and provided for in his contract, and having failed to do so he took the risk upon himself and must abide the consequences. In the English case of Newby v. Sharpe, 8 Ch. Div., 39, the defendant let the basement of a store to the plaintiff "with full and undisturbed right and liberty to store cartridges therein and covenanted to keep the premises in proper repair and condition so as to be available for storing cartridges, and also covenanted for quiet enjoyment." Plaintiff took possession of the demised premises and stored cartridges in them. Other parts of the store were at that time let to other persons for storing gunpowder. Soon afterwards the Explosive Act, 1875, passed, making it illegal to store cartridges and gunpowder in the same building, and prescribing heavy penalties for a violation thereof. Upon the passage of this act, the defendant lessor, removed the cartridges which had been placed in the store to another building and notified plaintiff that in order to protect himself from liability he could be compelled to notify the authorities if he, plaintiff, stored other cartridges in the leased premises. This course was pursued by defendant solely to avoid subjecting himself to the penalties of said act, and at all times he stated to plaintiff that the rented premises were at his disposal. Plaintiff, the lessee, however, claimed an eviction and sued to restrain defendant from obstructing the storing of his cartridges and for damages. It was held that plaintiff could not recover and that judgment must be entered for defendant; the court, among other things, making the following observation: "At the time when the lease was granted, both parties were aware that there was pending in Parliament a bill to make further regulations as to the storing of explosive substances, and if plaintiff intended to be guaranteed by defendant against any effect which such regulations might have on his use of the demised property he ought to have insisted upon having stipulations for that purpose inserted in the lease. He did not do so but chose to take the risk." We think it is manifest from the opinion in the above case that the pendency of the bill in Parliament and the knowledge of that fact by the "plaintiff" when he procured a lease of the premises, exercised controlling influence with the court in the conclusion reached. The facts in the case at bar present stronger reasons for the enforcement of the contract sued on than those in the case from which the above quotation is made. Here the law, by which the intended use of the rented property was prohibited had been actually passed by the Legislature, was a valid and subsisting statute, and such statute and the action taken under it resulting in the prohibition of appellant's business in Ellis County were presumably in contemplation of the parties when the lease in question was made.

In addition to the case of Newby v. Sharpe, supra, the following cases may be cited as instructive, if not directly in point: Rosenbaum v. United States Credit System Co., 64 N.J.L. 34,44 A. 966; Dewey v. Alpena School Dist., 43 Mich. 480; Tweedie Trading Co. v. Jas. P. McDonald Co., 114 Fed. Rep., 985; Moseley v. Baker, 2 Sneed (Tenn.), 362; Bryan v. Spurgin, 5 Sneed (Tenn.), 680.

Appellant's proposition that the performance of a contract is excused by a supervening impossibility caused by the operation of a change in the law, is correct; but it is believed there has been no such change in the law since the lease in question was executed as would authorize the application of that principle in this case. We see no valid reason for not applying in this case the fundamental maxim, that "as a party binds himself so shall he be bound."

Believing that the proper judgment was rendered in the court below the same is affirmed.

Opinion delivered January 7, 1905.