Douglas v. Herms

Collins, J.

Plaintiffs, being the owners of vacant city property, leased the same, in 1884, to defendant Herms for a long term of years.

The latter was to pay the stipulated rent quarterly, in advance, and was also to pay all taxes which might he assessed or levied thereon. He erected a substantial building upon the property. On September 2,1892, being insolvent, hé executed a deed of assignment for the benefit of his creditors, thereby conveying his leasehold interest and all other rights in and to the premises to defendant Heckricli, who still remains the assignee under the insolvency laws of this state. The other defendants herein are tenants in possession under leases made by Herms prior to his assignment. It appeal’s that, for some years before the assignment, default had been made in the quarterly payments of rent, so that $1,843.05, exclusive of interest, .was then due. The tenant had also neglected to pay taxes, which on May 30, 1891, amounted to $831, and this sum plaintiffs paid to the proper authorities on that day. From time to time during the -period of default, partial payments had been made by the tenant, and accepted by plaintiffs, but at no time had the rent been paid in full, although often demanded. The present action was brought before a justice of the peace under the forcible entry and unlawful detainer act, 1878 G-. S. ch. 84, § 11, and from his decision an appeal was taken to the District Court, in which judgment of restitution was ordered. This appeal is from an order refusing defendants a new trial.

The result here must be made to turn upon our construction of a portion of the lease. It was therein provided that if default should be made by the tenant in his payments of'rent and taxes at the times and in the manner specified, the landlords should have the option and election to declare the lease terminated absolutely, and all of the tenant’s rights and interest thereunder, and all of his rights and interest in and to all buildings and improvements upon the premises, forever ended and forfeited, and should also have full •right and power to enter into and upon, and to take possession of, the premises, including all of said buildings and improvements; or, at the election of said landlords, they could pay the taxes, instead •of declaring the lease forfeited; and in either case the amount of .all rents in arrears, and the amount of all taxes paid, should become a lien on the leasehold estate, and on all buildings and improvements, prior and paramount to all other liens or claims of every nature, which prior and paramount lien might he foreclosed in the same manner as a mortgage upon real property.

Counsel for appellants do not claim that, if the conditions first mentioned with respect to the’forfeiture of the tenant’s rights and interests in case of default stood alone in the lease, this action would not he maintainable; but their position is that, having been indulgent to the tenant during the period of four years next preceding his assignment, allowing him to default habitually in his quarterly payments of rent, and, further, by having paid taxes in the year 1891 which the tenant should have paid, they have abandoned their right to declare a forfeiture, and to take possession of the entire premises, and have chosen and elected to rely solely upon their lien, and the power and authority conferred to foreclose the same as a real-estate mortgage. The contention is that there are two distinct and independent remedies in case of default provided for in the lease, one of which has been selected, and that by this selection the landlords have lost the right to summarily dispossess the defendants under the provisions of section 11, supra. It is true that when the first default occurred, in 1888, probably, these plaintiffs could have exercised their rights, and arbitrarily ejected Herms and his tenants from the property. They seem to have been lenient, and to have accepted partial payments when not required so to do. In May, 1891, finding a large sum due for taxes which should have been paid by the tenant, they were again forbearing,' and, paying the amount, refrained from exercising the right of forfeiture. It may be possible that, as to past defaults in payment of both rents and taxes, strict construction of the terms of the lease would require us to hold that by means of this payment of taxes the landlords elected to rely solely upon their lien, and waived and lost the right to recover possession. But, if this be so, the bare fact that subsequently to the payment of taxes the tenant was permitted to repeatedly default, and the landlords frequently accepted partial payments, as for rent, cannot be given the same effect, any more than if, at the time the taxes were paid, the tenant had met all of his obligations under the lease, and had liquidated all past indebtedness. The election, if it was made so as to deprive these plaintiffs of the remedy they are now pursuing, of which we have doubt, cannot be regarded as an election for the future, any more than the acceptance of rent from month to month, and while a tenant is in default in the performance of some of the conditions of a lease, will he held 'to have relieved him from the duty of performance in the future. See Gluck v. Elkan, 30 Minn. 80, (30 N. W. Rep. 446.) According to the conditions of the lease before mentioned, the plaintiffs had a prior and paramount lien for rent in arrears at all times, which they could, if they chose, foreclose as a mortgage upon land. They were also authorized to pay delinquent and unpaid taxes, and the amount of the same was a lien of the same general character. But certainly, as to rents which became due after the plaintiffs paid the taxes, there is nothing which evidences an intent to rely solely upon their lien. That they were indulgent and accommodating,- allowing the default to continue, and the amounts due to steadily increase, simply failing to put the tenant out, cannot be regarded as proof of their election to waive the right to declare a forfeiture or to take possession, as provided for in the lease. A lessor of real property will not be estoppeled to claim the right to possession of the premises for nonpayment of rent simply because he permits default to Re made, and to continue, as to such payments.

Order affirmed.

Vanderburgh, J., did not sit.

(Opinion published 5á N. W. Rep. 1112.)