Donelson v. Polk

Alvey, C. J., delivered the opinion of the Court. The bill in this case was filed against the appellant to compel him to account for and pay over to the appellee as lessor, certain arrearages of ground-rent, which accrued due while the former was owner and possessor of the leasehold estate, as assignee thereof, and which leasehold premises he afterwards assigned; and also to compel him to reimburse the appellee the amount of taxes that accrued due during the time of the holding of the premises by the appellant as such assignee, — such taxes having been subsequently paid by the appellee. There is no dispute in regard to the amount claimed, and for which the decree below was rendered; and all the material facts of the case have been ascertained by agree [504] ment, and which, facts it is unnecessary to repeat here. It may, however, be proper to state, that the lease of the premises by the appellee to Kennedy, the original lessee, is for ninety-nine years, and is dated the 22d of July, 1868; and that the annual rent reserved is $860, payable in equal half-yearly instalments, with covenant on the part of the lessee .to pay all taxes that might be thereafter levied either on the premises demised or the rent reserved. The appellant resists recovery against him in this case upon two grounds: 1st. That a Court of equity has no jurisdiction to decree against him in respect to the claim made ; and, 2d. That the appellee is estopped from asserting her claim against him. 1. The principle of law is a familiar one, that the liability of an assignee of a term to the original lessor, or those claiming under him, grows out of the privity of estate, and that such liability continues only so long as such privity of estate exists. So long as the privity of estate continues, the assignee is liable upon all covenants that run with the land, such as covenants for the payment of rent, and of taxes assessed upon the premises (Lester vs. Hardesty, 29 Md., 50); and for any breach of such covenants, the lessor may sue him during the continuance of the assignment. But as his liability springs altogether from his relation to the land, it follows that when he severs that relation he puts an end to his liability for any future breaches of the covenant contained in the lease, whether such covenants be expressed or implied. In regard to this there is no question or conflict of authority. But though the liability of'the assignee for future breaches is terminated upon assignment by him, the question whether the remedy, after the assignment, in respect to breaches of covenant committed by the assignee during the time of his holding, can be had by action at law, or can only be sought in equity, is one in regard to which [505] there is conflict of authority. In England, it has been held that the assignee is liable in an action at law for breach of covenant running with the land, incurred in his own time, though the action was not commenced until after he had assigned the premises. Harley vs. King, 2 Cr. M. & R., 18. And the same principle has been fully sanctioned by the Supreme Court of New York, in Quackenboss vs. Clark, 12 Wend., 557. But in this State it has been settled by our predecessors, that such action at law, if not brought before the assignee divests himself of the estate, cannot be maintained against him. This was held in the case of Hintze vs. Thomas, 7 Md., 346, which was an action of covenant brought against the assignee of a lease after he had assigned over, for rent falling due subsequent to the assignment to him, and before the assignment over ; and consequently the direct question of the right to maintain the action at law was presented, and the Court held it could not be maintained, And though the question of the right to relief in equity was not necessarily involved, yet the Court gave sanction to and founded its judgment upon the authorities which maintain that the remedy is in equity, in a case like the present, and not at law. After referring to and quoting some of the authorities upon the subject, which hold that an action at law will not lie against the assignee after the privity of estate has ceased, the Court refer to and quote from the opinion of Baron Alderson, in Fagg vs. Dobie, 3 You. & Coll., 96, this passage : “But though this be so, yet equity will give relief as to antecedent rent due, or antecedent breaches of covenant committed at the time the party was liable for them, although by his subsequent assignment the remedy at law is gone.” From this, and what is stated in Platt on Covenants, at page 495 to 503, the Court deduced the conclusion that the action at law would not lie. This case of Hintze vs. Thomas has been referred to with approval in subsequent cases, (Mayhew vs. Hardesty, 8 Md., 479; [506] Lester vs. Hardesty, 29 Md., 50,) and without saying, if this were a new question, that we should hold, as was held in Hintze vs. Thomas, that the action at law could not be maintained, yet there is very ample authority in support of the proposition, that equity will take cognizance ‘of and afford relief in such case as the present. Treackle vs. Coke, 1 Vern., 165; City of London vs. Richmond, 2 Vern., 421; Philpot vs. Hoare, Amb., 480, S. C., 2 Atk., 219; Valliant vs. Dodemeed, 2 Atk., 546. As the right of action had accrued during the holding of the assignee, and that right of action at law had been defeated by the action of the assignee, in assigning his interest in the term, it is but right that there should be a remedy in some form, and that remedy is afforded by a Court of equity. It is contended, on the part of the appellant, that this resort to a Court of equity is unnecessary, inasmuch as the appellee had ample remedy, by re-entry and forfeiture of the lease, for the non-payment of the rent in arrear. But it is a settled principle that a Court of equity will never require that a party should insist upon a forfeiture as a remedy; and moreover, it is the absolute right of the appellee to insist upon the performance of the covenants of the lease, or compensation in damages for the breach thereof, by those upon whom such covenants are binding, by reason of their relation to the estate. 2. The question of estoppel raised against the appellee, clearly has no foundation in fact to support it. There is nothing shown in the proof that the appellant was induced to act, in reference to the estate, or the rent and taxes claimed, in any manner to his prejudice, by the declaration or act of the appellee purposely made or done to effect such result; and in the absence of clear proof to show such to have been the case, there is no ground whatever for the application of-the principle of estoppel in such a case as this. The facts agreed upon, as set out in the last paragraph of the agreed statement of facts, cér [507] tainly furnish no ground for concluding the appellee, in respect to the claim now made against the appellant. And the proof appears to be clear in negation, of what seems to be a suspicion on the part of the appellant, that there was collusion between the appellee and her niece, Mrs. Pack-ham, in effecting the purchase of the property by the latter, at the trustee’s sale made on the 2?th of February, 18?9. (Decided 3rd February, 1886.) The decree of the Court below must be affirmed. Decree affirmed.