Moline v. Portland Brewing Co.

Mr. Justice Eakin delivered the opinion of the court. 1. The question to be determined in this case relates to the obligations of the assignee of a lease. There does not seem to be any conflict in the authorities bearing upon this subject. The assignee of a lease is bound [536] to fulfill the obligations thereof according to the terms of the lease. “It is a well-settled rule that, by virtue of privity of estate between the assignee of a leasehold and the lessor, such assignee becomes personally liable to the lessor, while he holds the estate as assignee, for the performance of the lessee’s covenants, which run with the leasehold estate”: 18 Am. & Eng. Ency. Law (2 ed.), p.668. To the same effect is this provision in 24 Cyc., page 1179: “Where a lessee assigns his whole estate in all the demised premises, the assignee is liable to the lessor for the whole of the rent reserved in the lease. ’ ’ The same principle is applied in Culver v. Van Valkenburgh, 60 Or. 447 (119 Pac. 753); Leadbetter v. Pewtherer, 61 Or. 168 (121 Pac. 799, Ann. Cas. 1914B, 464). And he thereby becomes the party to the lease and is liable for the whole term. Neither is possession thereunder necessary, and he cannot discharge himself from such liability without the consent of the lessor. 2. The first objection of appellant relates to the motion for nonsuit, and is without merit. Plaintiff having leased the property to G-reenhalgh, and the facts being proved as to defendant’s possession of said leased property, together with said plaintiff’s Exhibit 2, made a prima facie case sufficient to be submitted to the jury. 3. As to the fifth instruction requested by the defendant, the rule is that, if defendant took the assignment of the lease from Greenhalgh or from his assignee, he could not at his own option repudiate the obligations thus assumed. The assignee of the lease becomes liable for the rent by reason of the privity of estate, and not by reason of the occupancy of the premises; [537] and by mere abandonment thereof he cannot escape liability: 24 Cyc. 1180 (B). 4. The sixth requested instruction is: “If said premises were destroyed or rendered unfit for occupancy by fire, * * the defendant would not be liable for any rent * * from the time of such fire.” The rule is that, if the tenant expressly covenants without limitation or reservation to pay rent for a term of years, he is not released from that obligation by the destruction of the building by accidental fire: Harrington v. Watson, 11 Or. 143 (3 Pac. 173, 50 Am. Rep. 465, note). And the instruction was properly refused. 5. Requested instruction 11 seeks to shift the burden of proof which was on defendant after possession by him was established. It is said in 18 Am. & Eng. Ency. Law (2 ed.), page 677: “Where a lessor seeks to hold one found in possession of the land liable as assignee for rent, or on the covenants in the lease, he is not required in the first instance to prove the assignment to the party in possession, as the law presumes that a person other than a lessee found in possession holds as an assignee.” There is no merit in the request for a directed verdict. Instructions 3, 4 and 5 were justified by the rule that, when a third party is in possession of leased premises under the lessee, the law presumes that they have been assigned by the lessee to such third party: 24 Cyc. 1181. 6. Instructions 7, 9 and 10 are justified by the rule that if a party is not in possession as an assignee of the lessee, but simply a sublessee, he is liable on the covenants of the sublease to his lessor only, and not on covenants of the original lease; there being neither privity of estate, nor privity of contract: 24 Cyc. 1183; [538] 18 Am. & Eng. Ency. Law (2 ed.), p. 682; Culver v. Van Valkenburgh, 60 Or. 447 (119 Pac. 753). There being no error committed by the Circuit Court, the judgment is affirmed. Affirmed. Rehearing Denied.