Hecht v. Acme Coal Co.

Scott, Justice. This action was commenced in the district court of Sheridan County by Acme Coal Company against Dan McCoy and John Plecht upon a covenant of a lease to recover the rent of a certain building and premises described in the lease for saloon purposes for the months of November, December, 1909, and January 1910. The lease was executed on September 12, 1908, by Darnall and Craig, a co-partnership, as lessors, to Dan McCoy, lessee. The term of the lease was five years and the lessee covenanted to pay one hundred dollars a month as rent therefor in advance on the first day of each and every month during the term of the lease commencing October 1, 1908. The lessee entered into possession and occupied the premises and conducted a retail liquor business therein until July 24, 1909, when he vacated the premises and declined to pay rent thereafter. Hecht guaranteed in writing the performance of the covenants and conditions of-the lease by McCo'y. The case was tried to the court without the intervention of a jury. McCoy was not served and the court found in favor of the Acme Coal Company and gave judgment in its favor against Hecht for the sum of $300 and costs of suit. Hecht brings the case here on error. The lease, demised premises and written guaranty are the same as those involved in case number 639 between the same parties, this day decided. The questions here presented are almost identical-with those raised in that case, and in so far as "they are the same they need not here be reconsidered. It is contended that the judgment is contrary to law. By the terms of the lease the premises were leased for saloon purposes. The premises were outside of any incorporated city or town. On October 9, 1908, the lessee applied to and obtained from the board of county commissioners of. Sheridan County a license to sell and retail intoxicating — 27 — liquors therein for the period of one year. The defense interposed was that by section 1 of chapter 7, L. 1909, sec. 2833, Comp. Stat. 1910, which was enacted after the execution of the lease and while the lessee was in the occu-pancjr and. using the premises for saloon purposes as contemplated by the provisions of the lease he was prevented from renewing his license at the expiration of the time covered by the one under which he was doing business and that the consideration for the lease after that time had failed thereby relieving him from payment of the rent for the months specified. The act referred to provides that the board of county commissioners “shall refuse to grant any license or extend any existing license for the sale of liquors at any place outside of incorporated cities and towns.” Sec. 2832 idem provides a penalty for the selling of intoxicating liquors without a license. It is contended that the lessee assumed his obligations under the lease with knowledge that it was within the police power of the state at any time by legislative enactment to prohibit the sale of liquor either in or outside of incorporated cities and towns or both and that having failed to provide for such contingency he is liable for the rent notwithstanding the provision of Sec. 2833, supra. The question qs here presented is one of first impression in this court and there is some conflict in the decisions. In O’Byrne v. Hendley, 161 Ala. 620, 50 So. Rep. 83, a lease of premises for saloon purposes was made when it was lawful to sell intoxicants and was used by the lessee as a saloon for the sale of intoxicants, soft drinks, cigars, &c., until a prohibition law went into effect.. It was held that the prohibition law in the absence of a provision to that effect contained in the lease did not terminate the lease and relieve the lessee from liability for future rent, for the reason that the business was not totally destroyed. The word “saloon” as used in the lease was held to mean a place where the business. included the sale of intoxicants but did not exclude the sale of other things. ’ The terms of the lease, are not set otit in the opinion and we may presume — 28 — that it contained no provisions beneficial to the lessor other than the usual covenants of such an instrument. Houston Ice & Brewing Co. v. Keenan, 99 Tex. 79, 88 S. W. 197, was an action for rent upon a lease which provided that the premises should be used for the “saloon business.” The lease was executed and delivered, but before the term began, prohibition was voted under a local option law. It 'was held that the action was maintainable .notwithstanding that the sale of intoxicants would be unlawful. The court say: “Appellee had no interest in the business to be conducted in the leased building, and the 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 San Antonio Co. v. Brents, 39 Tex. Civ. App. 443, 88 S. W. 368, the action was for rent upon a lease of a building to the lessee for the purpose of conducting a first class saloon therein. It was held that the subsequent passage of a local option law during the term whereby it became unlawful to longer maintain the saloon did not authorize the lessee to abandon the lease. In Lawrence v. White, 131 Ga. 840, 63 S. E. 631, 19 L. R. A. (N. S.) 966, it is said: “The question in this case is whether the lessee of a hotel, including a bar room, was entitled to a reduction or proportional abatement of the agreed rental, because during the term of the lease the legislature of the state enacted a law prohibiting the sale of alcholic, spirituous, malt or intoxicating liquors, and thus the bar could no longer be used for that purpose. The adjudicated cases with unusual uniformity answer this question in the negative, though they do not all give the same reasons for the ruling.” In Abadie v. Berges, 41 La. Ann. 281, 6 So. 529, it was held that “a landlord cannot be held to warranty and indemnify against the 'acts of the law’ in the absence of express stipulation to that end.. Should — 29 — a tenant sustain damage in consequence of a constitutional police legislation adopted subsequently to his contract of lease such as the 'Sunday law’ which forbids the use of the property rented to a particular use to.which the lessee applies it, in a special way and on a special day, such damage.is injuria sine damno, which is not compensable. Such legislation could have been foreseen, and does not impair rights under the contract.” In Miller v. McGuire, 18 R. I. 770, 30 Atl. 966, it was said: “To constitute an eviction which will operate either to annul the lease or as a suspension of rent, the act complained of must have been done by the landlord or by his procurement, with the intention and effect of depriving the lessee of the use and enjoyment of the demised premises in whole or in part.” In Kerby v. Meyer, 10 Misc. Rep. 718, 31 N. Y. Supp. 818, a lease was made of premises “to be used and occupied only.as a first class liquor saloon.” The lease was executed and delivered, afterward, and before the commencement of the term, the legislature enacted a law forbidding the sale of liquor within 200 feet of a church or school house, by reason of which it became impossible for the lessee to obtain a license for the sale of intoxicating liquors. It was held that this did not relieve the lessee from payment of the rent. The court said: “It is only when the lessee is deprived without his fault, of the use of the premises for any purpose, that rent ceases; and, if the lessee were deprived in this instance it was his own fault, for he should have stipulated against the contingency of a refusal of a license.” In Goodrum Tobacco Co. v. Potts-Thompson Liquor Co., 133 Ga. 776, 66 S. R. 1081, a lease provided “that the purpose of, this lease is for the operation by second party of a general retail liquor business.” During the term of the lease and while the lessee was fn the occupancy of the leased premises and conducting a retail liquor business therein, a. law prohibiting the sale of intoxicating liquors was enacted and went into effect. It was held that the prohibition law did not constitute a defense to an action for rent accruing upon the contract after such enactment in the absence of a stipulation — 30 — therein relieving the lessee from such payment. The same rule is adhered to in Baughman v. Portman, 12 Ky. L. Rep. 342, 14 S. W. 342. We think the reasoning of these cases clearly establish the law as applicable between a landlord and tenant upon the covenants of a lease. They constitute the great weight of authority. Our attention is called to one case which holds to the contrary, Heart v. East Tenn. Brewing Co., 113 S. W. Rep. 364, which stands alone. Entertaining the view as expressed by a majority of the courts we do not deem it necessary for the decision of this case to decide whether the words “for saloon purposes” as used in the lease were so used in a restrictive or a permissive sense. In either event the tenant would not be relieved from the payment of the rent. (Goodrum T. Co. v. Potts-Thompson Co., supra; Houston Ice & Brewing Co. v. Keenan, supra; Lawrence v. White, supra.) The sale of intoxicating liquors is always subject to regulation by the state in the exercise of its police power,- and when the landlord has no interest other than a pecuniary one of protecting his property from spoliation and the value of its use as rental, the principles of law announced in the foregoing decisions are applicable. A lease for unlawful purposes at the time of its execution is void. (Secs. 469, 470, 471, Underhill on Landlord and Tenant.) A provision in the lease for relief from further liability for rent or for an abatement or proportional reduction thereof in the event of a change of the law with reference to the business to be conducted on the premises is for the benefit of the lessee and when the landlord has no interest in the business to be conducted, a change in the law during the term of the lease whereby such business is wholly or partly prohibited, does not of itself relieve the tenant from his obligation to pay the rent for the entire term. From the evidence in this case the landlord is without fault. Through no act of the lessors or the company has the lessee been prevented from the peaceable occupancy and enjoyment of the demised premises. There has been no election under the lease to declare a forfeiture nor has — 31 — there .been any attempt- to wrest possession from the lessee, nor has there been a surrender and acceptance of the premises. It was not stipulated in the lease that the lessee should be relieved from the payment of the rent except during the time it might be closed upon notice that the employees of the lessors and their assigns in the operation of their coal mines in the vicinity of the leased premises were on a strike or locked out. This is the only contingency provided in the lease relieving the lessee from payment of the rent and was limited to the duration of certain conditions. This provision by implication excludes the relief of the lessee from payment of rent during the term of the lease in all cases except when required by the company, in the exercise of its right, to keep the saloon closed. Relief from payment of the rent here sued for is not sought upon this nor upon any other provision contained in the lease and we cannot read into it a provision or agreement not therein contained either expressly or by necessary implication. After the evidence had been taken and during the argument'of counsel to the jury, the defendant requested the court to re-open the case and allow him to introduce evidence to the effect that the rental value of the building mentioned in the petition for saloon purposes, other than the sale of intoxicating liquors and beverages, did not exceed the sum of $15 per month. The denial of this request is here assigned as error. This ruling is sustained for two reasons, first: It was not an abuse of discretion to deny the motion, and, second: There is no provision in the lease for an abatement or proportional reduction of the rent for any cause upon which relief from payment is sought. (Lawrence v. White, supra.) It is contended that Hecht’s liability on his guaranty ceased upon the expiration of the license. His guaranty is unconditional, equally as broad and measures up to that of his principal. There is no express provision or condition whereby he is to be relieved from his obligations. He, also, will be presumed to have known that McCoy, his principal, — 32 — might be prevented from obtaining a license by the state in the exercise of its police power. His guaranty was one of performance and not of collection. He was surety for the payment of the rent and was liable therefor upon McCoy's failure to pay. (Hecht v. Acme Coal Co., this day decided). No error appearing in the record the judgment will be affirmed. Affirmed. Beard, C. J., and Potter, J., concur.