Cook v. Cave

Hart, J., (after stating the facts). It may be stated at the outset that the plaintiff brought an action of unlawful detainer against the defendant in the circuit court, and, by consent of the parties, the cause was transferred to the chancery court. Subsequently the plaintiff amended his complaint to recover judgment for the amount of rent due him under the written lease, and to ask that the amount recovered be declared a lien upon the hotel building,, furniture and fixtures therein, as provided in the. written lease. As a defense to the suit in this form, the defendant pleaded the terms of a new onal agreement which she alleges was entered into between herself and the plaintiff, in substitution of the written lease, which is the basis of the plaintiff’s suit. It is well settled in this State that parties to a written contract may, subsequent to its execution, modify it and substitute a valid onal agreement therefor. Ozark & Cherokee Central Ry. Co. v. Ferguson, 92 Ark. 254; Weaver v. Emerson-Brantingham Implement Co., 146 Ark. 379, and cases cited; and Dierks Special School Dist. v. Van Dyke, 152 Ark. 27. It is the contention of the defendant that there was a verbal agreement between herself and Cook modifying the written lease and reducing the rent to $312.50 per month. The written lease provides for the payment of $425 per month, which, it is conceded by the lessor, was reduced to $412:50 per mouth. The written lease must control the rights of the parties, unless it was changed, subsequent to its execution, by a valid oral agreement. In order to show the change or substitution of a new lease for the old one, it was incumbent upon Mrs. Belle Cave to show that a subsequent valid verbal contract was entered into between herself and Cook, which was supported by a consideration. In this connection it may be stated that the exercise of her option to renew the lease for an additional year, as testified to by Mrs. Belle Cave, would be a good consideration for a reduction of the rent, provided the new contract was valid and binding in other respects. 1 Underhill on Landlord and Tenant, p. 554; Tiffany on Landlord and Tenant, vol.-l, p. 1055, and 16 It. C. L. p-1162. While the agreement on the part of Mrs. Belle Cave to exercise her option to renew the lease for an additional year was a good consideration for a reduction of the rent, still the new agreement, being a verbal one, was invalid under our statute of frauds. See -subdivision 5, § 4862 of Crawford & Moses’ Digest. In making this statement we are not unmindful of the cases of Higgins v. Gager, 65 Ark. 604, and Alexander-Amberg & Co. v. Hollis, 115 Ark. 589. In those cases a lease was made to commence at a period -of time in the future and to run for one year from that date. The court held that the time between the making of the lease and its commencement in possession could not, under the statute, be taken as a part of the term granted by the lease. Hence the oral contract for the lease of the land for one .year, to commence at a date subsequent to the making of the contract, was not within the statute of frauds. In the case at bar the facts are essentially different. According to Mrs. Belle Cave, the new agreement was made on the first of February, 1922, and the lease was to continue for an additional year after the 12th day of February, 1923; but the provision for the reduction of the rent was to commence at the date of the new agreement. This had the effect of the parties attempting to make a new agreement to commence at once and extending over a period of more than one year. The provision in the new contract for a induction of $100 per month on the rent, to commence at once, was an attempted substitution of a new agreement for the old one, and was void under the statute of frauds, because it extended over a period of more than one year. The defendant alleged a change in the terms of the lease, and the burden of proof was upon her to show it. She relied upon a new contract providing for a reduction of the rent as .a defense to the action, and, having failed to establish a valid contract reducing the rent, it follows that the court erred in finding in her favor that such a contract was made. Wheeler v. Baker (Iowa), 12 N. W. 767; Weber v. Powers (Ill.), 68 L. R. A. 610; Emery v. Boston Terminal Co., 178 Mass. 172, 86 Am. St. Rep. 473; Crawford v. Wick, 18 Ohio .St. 190, 98 Am. Dec. 103; Falk v. Devendorf (Wis.), 177 N. W. 894; 20 Cyc. p. 214; and 27 C. J., p. 210-211, §§ 179-180. The possession of the leased premises was continuous and unbroken, and is referable to the old as well as to the new lease. It results, from the authorities cited above, that, in case of an oral agreement materially changing the terms of the old lease, if no acts are performed which clearly show that the tenant's possession is continued under the new oral agreement, such possession will be referred to the original lease, and such oral contract will be- void. Under subdivision 5 of 4862 of Crawford & Moses’ Digest, no action shall be brought to charge any person upon any lease of lands for a longer term than one year. The plaintiff predicated his right to reoovér upon a valid written lease. The defendant pleaded, by way of defense, a new verbal contract, which we have held void under the statute of frauds. The plaintiff filed a reply to the answer, in'which he denied making the new verbal agreement with the defendant. The denial in the replication of the plaintiff of the making of the oral contract on which the defendant based her oross^action is as effective for letting in the defense of the statute of frauds as if the statute had been specifically pleaded. The reason is that the reply denied the existence of any new agreement, and. it was incumbent upon the defendant to prove a legal agreement, which, in cases within the statute of frauds, must be a written one. Wynne v. Garland, 19 Ark. 23; Trapnall v. Brown, 19 Ark. 39; Stanford v. Sager, 141 Ark. 458; Dunphy v. Ryan, 116 U. S. 491, 25 R. C. L. par. 398, p. 746, and 27 C. J., pp. 369-372. We think it clear, upon principle, under our statute of frauds and system of pleading, that it is sufficient to deny the contract without referring to the statute. Where the pleadings present the issue of agreement or no agreement, the party relying upon the agreement must prove a valid one. If the plaintiff had admitted that a verbal agreement had been made as alleged by the defendant, then he must have pleaded the statute of frauds in order to rely upon it. The plaintiff having denied, in his reply, the oral agreement alleged in the answer, the statute of frauds became a question of fact at the hearing. Hence the denial in the replication of the plaintiff of the making of the verbal contract set up by the defendant was as effective as a special plea of the statute of frauds. In this connection it may be stated that the defendant was never evicted from the premises. According to her testimony, when she received the notice to deliver up the possession in the action for unlawful detainer, she consulted her attorney, and he advised her to give up possession of the premises. The notice to quit was served upon her by a deputy sheriff, and she at once vacated the premises. According to the testimony of the sheriff, when the writ of possession came into his hands, he took the matter up with his lawyer, who advised him not to serve it.. The sheriff then took the matter up .with the defendant’s attorney, and informed him that he would not serve the writ of possession upon the defendant. The sheriff stated further that his recollection is that the defendant had already vacated the premises when the writ of possession came into his hands. She vacated the premises when the notice to quit was served on her. Hence she voluntarily surrendered the possession of the premises. "While she did not consent to the appointment of a receiver, she did consent to a transfer of the case to the chancery court. Subsequently the plaintiff filed an amendment to his complaint, in which he asked fox' a judgment for the rent which had accrued, and that the amount thereof be declared a lien upon the hotel property and the furniture and fixtures therein. It follows that the chancellor erred in sustaining the defense of the defendant, and that he should have rendered a decree in favor of the plaintiff for the amount of rent due and unpaid under the original lease. With regard to the receiver, but little need be said. While the defendant consented to the transfer of the ease to the chancery court, she did not consent to the appointment of a receiver. The appointment was made upon the application of the plaintiff, and there is no allegation in the bill which made the appointment necessary. By the terms of the lease the plaintiff had a lien upon the building and furniture for the amount of the unpaid rents. This provision created in equity a chattel mortgage on said property, and the appointment >of a receiver was unnecessary. Mitchell v. Badgett, 33 Ark. 387. Therefore the cost of the receivership was properly charged against the plaintiff. The plaintiff claims, however, that the amount of fee allowed to the receiver by the chancellor was excessive, and in this contention we think he is correct. The receiver was a deputy sheriff, and, during the whole period of his receivership, he discharged the duties of tliat office and received the same salary which he had been paid before he was appointed receiver. He did not have active control of the management of the hotel, but was permitted to hire a manager to run it. His services were merely of a supervisory character, and we think the sum of $500 would have been an ample allowance for the services performed by him. Therefore the decree will be reversed, and the cause remanded with directions to the chancellor to enter a decree in accordance with this opinion.