Thackray's Appeal

The opinion of the court was delivered, March 9th 1874, by Mercur, J. Five assignments of'error have been filed, yet the only question is substantially raised by the fourth. It is this: Shall the appellant be surcharged with $1350, the alleged value of the good-will of the hotel, which it is claimed he ought to have demanded and received from the tenant ? The hotel property was owned by the two wards of the appellant, subject to their mother’s right of dower. Thus each of them was entitled to one-third of the rents. It appears that the appellant leased the whole property, collected the rents, and, in settling his account in the Orphans’ Court, charged himself with the whole amount. By the decree of the court below, the appellant is ordered to pay to said widow one-third of the sum with which he is charged, thus making an equitable distribution in an irregular manner. No objection, however, is made to his having blended the money of the widow with that of his wards. Upon a former occasion, the appellant had leased the premises for a term of five years, at an annual rental of $300. As part of the arrangement, he also received from the lessee the gross sum of $500 for the good-will. It was expressly stipulated in the lease, that upon the expiration of the term, the tenant should have no claim to the fixtures which were then in or might be put in said premises, nor any claim for good-will. With that disposition of the good-will, no complaint is made. During the first year of the term, the lessee, with the knowledge of the lessor, assigned the lease to one John Binder. He entered into possession and paid the subsequent rent. Several months prior to the expiration of the term, the appellant leased the premises to said Binder for the further term of eight years, at the annual rental of $400, the lessee agreeing to keep the premises in repair at his own expense. The appellant did not charge nor receive anything specifically for the good-will. This lease contained the same stipulation as the former one, excluding the lessee from all claim for fixtures and good-will at the expiration thereof. [137] After expending $250 in improving the premises, Binder, at the commencement of the new term, assigned the lease, with the assent of the lessor, to one Himmilsbach, receiving for the same and for the good-will and fixtures $1350. The auditor found and the court below held, the appellant to have been guilty of supine negligence or wilful default, in not demanding of and .receiving from Binder payment for the good-will, and therefore surcharged.him with the $1350. • It does not appear that any other person offered to pay the appellant more than $400 per annum for the use of the property, nor to pay him for the good-will any sum whatever. The appellant evidently considered this letting as substantially a renewal of the lease to Binder. If it had been technically so, the whole evidence shows that it was not customary to charge for the goodwill. The evidence also shows that the bargain was made, and the lease executed, with the advice and approval of the mother. Then, whatever the equities of the minor children may be, it is clear that she cannot with any justice require the appellant to pay her any portion of the excess beyond the sum stipulated in the lease. There is no proof that she was deceived or in any manner defrauded by the appellant. She, then, has no equities to invoke and no wrongs to right against him. Hence it follows that the mother is bound by the lease, and the appellant cannot be surcharged for her benefit with any supposed or actual separate value of the good-will. In so charging him the learned judge erred. It seems to us to be improper to consider the good-will separately from the rental. It was an incident so intimately blended with the house, that for purposes of leasing, it should have been deemed a constituent part of the premises. Its integral character should have been recognised as one of the elements in fixing*the value of the rental of the whole property. The auditor found that $400 would have been a fair annual rental of the property, if the appellant had also further received a separate and just compensation for the good-will; but as the appellant had not, the auditor surcharged him $1350 for the good-will of the whole term, beyond the sum stipulated- in the lease. The court confirmed this finding; therein we think it erred. During the first lease for five years, the appellant received a sum equal to $100 only per annum for the rental of the good-will. That was satisfactory to the appellees. It is not shown that the appellant had any just reason to suppose the annual rental of the good-will was worth any more during the second term than during the first term. In. fact the weight of evidence clearly establishes that the appellant should not have charged a tenant under a renewed lease for the good-will. This was practically Binder’s position. He had once paid for the good-will, and had been recognised as a tenant by the lessor. ,We think, under the whole evidence, $500 would have been a [138] fair annual rental for the premises, including the good-will. The mother, however, having by her action precluded herself from claiming more than one-third of the sum stipulated in the lease, the appellant should be surcharged with two-thirds only of the $100 per annum; that is, with the gross sum of $533.33, which sum should be paid to Charles W. Sainter and Richard Sainter. There was therefore error in the amount in which the appellant was surcharged, as well as in its distribution. Decree reversed and record remitted, in order that a decree may be entered, surcharging the appellant with $533.33, and a distribution thereof be made conformably -to this opinion. The costs of this appeal to be paid by the appellees.