Harmon, Wastcoat, Dahl Co. v. Star Brewing Co.

De Courcy, J. The plaintiff, by a lease dated April 1, 1914, demised a store on Washington Street, Boston, to William J. and Katherine M. Sarsfield for a term of two years and one month. The Sarsfields, who carried on the liquor business on the premises, borrowed $12,000 from the defendant Star Brewing Company, and as security gave the defendant a mortgage on the contents and good will of the saloon, and a power of attorney to assign to it the lease of the store. The lease itself permitted an assignment to the defendant. In October, 1914, the Sarsfields became financially involved and abandoned the liquor saloon; whereupon the defendant, under the provisions of the mortgage, assumed the management of the business until it was taken oyer by the trustees in bankruptcy of the estate of the lessees. On November 2, 1914, the lease was assigned to the defendant under the said power of attorney, and the defendant paid the overdue rent to and including November 30; The receipt given by the plaintiff recited: “In consideration of this payment of said rent the said lessor hereby waives all former breaches under the lease of said premises, occasioned by the non-payment of said rent and waives any rights it .may have to terminate said lease by reason of the bankruptcy of William J. Sarsfield and Company.” [569] It is agreed that the defendant has paid all rent which fell due under the lease, to and including that due March 1, 1915, for the month of March. This action was brought to recover the rent for the remaining thirteen months of the lease. The jury specially found (1) that the plaintiff’s waiver above set forth was given "in consideration of the Star Brewing Company agreeing to assume the performance of the covenants of the lease.” They also found (3) that the damages suffered by the plaintiff, in no way due to any lack of due diligence on its part in attempting to relet the premises, were $1,500. The first answer was fully warranted by the evidence, and disposes of the contention that there was no consideration for the defendant’s assumption of the terms and covenants in the lease. And the statute of frauds constitutes no defence. The defendant after the assignment and acceptance of the lease was liable by reason of privity of estate for the rent accruing during the time it was the owner of the leasehold interest. Sanders v. Partridge, 108 Mass. 556. Donaldson v. Strong, 195 Mass. 429. See 5 L. R. A. (N. S.) 979, et seq. It is further contended by the defendant that its liability for rent ended when it assigned the lease to John J. Duggan. Donaldson v. Strong, supra. The validity of this alleged assignment was in issue. The judge submitted to the jury the question: “Was the assignment from the Star Brewing Company to John J. Duggan delivered to the assignee and accepted by him? ” and the jury answered “No.” The evidence warranted a finding that the transaction was a mere pretence and sham, in an attempt to relieve the brewing company from liability for the rent. Duggan admitted that when the assignment was made out he did not intend to carry on business in the store. On the same day he executed an “assignment” to one Fitzgerald, who did not appear as a witness. Neither of them ever took possession, or actually claimed a right to do so. The assignments were left in the possession of the defendant’s counsel, who had held the lease and other papers since the Sarsfields got into financial difficulties. The testimony of Duggan alone goes far to justify a finding that the alleged assignment Was a mere paper transaction. Maionica v. Piscopo, 217 Mass. 324. The judge charged the jury that the brewing company had a right to assign the lease, and could do so even though it desired “to avoid the load of the rent or other [570] things;” but he also, and properly, directed their attention to the question whether Duggan really accepted an assignment of the lease. The jury found, in effect, that the parties went through the form of a physical delivery and acceptance of the paper as a mere cover or pretext, and with the intention that Duggan in fact should have no right of possession under it. Accordingly the defendant remained liable for the rent. Sanders v. Partridge, supra. Collins v. Pratt, 181 Mass. 345. The defendant’s requests, so far as not covered by the charge, were denied rightly; and the record discloses no error. Exceptions overruled.