Knight v. Orchard

BLAND, P. J. The learned circuit judge ruled that the lease did not authorize a forfeiture for the non-payment of taxes; that rent in the lease did not mean taxes. In Gedge v. Schoenberger, etc., 83 Ky. 91, a lot was leased “for a term of ten years from the first day of May, one thousand eight hundred and seventy-three, at the yearly rent or sum of one hundred and fifty dollars; also to pay all taxes and assessments during said term. Said rent to be paid in equal semiannual payments.” Speaking of this covenant in the lease thejsourt said: “The covenant to pay the taxes must, from the evident [471] intention of the parties, as shown- by the lease, be regarded as an agreement to pay them as a part of tbe rent. While they are not expressly so named, yet the parties to the contract clearly so intended, and this is the necessary implication.” This case was approvingly cited in McManus v. Shoe & Clothing Co., 60 Mo. App. l. c. 218. In Elliot v. Gantt, 64 Mo. App. 248, it was held that a covenant in a lease to pay taxes must be construed as one to pay the taxes as a part of the rent. Rent has been defined to be “a right to a certain profit issuing periodically out of lands and tenements corpórea], or out of them and their furniture, in retribution for the land that passes.” 2 Min. 1st. 32. The profit must be certain or capable of being reduced to a certainty by either party. Commonwealth v. Contner, 18 Pa. St. l. c. 447; Cross v. Tome, 14 Md. 247; McFarlane v. Williams, 107 Ill. 33; 2 Bl. Com. 41. Taxes are capable of being reduced to a certainty (they are the most certain as to period-ica] recurrence of all human affairs and their sum is never left in doubt after the taxbooks are made up) so that there is nothing in the cases holding that a covenant by a lessee to pay taxes should be construed as a covenant to pay rent; that militates against the definition of rent. The covenant in the lease before us to pay taxes is not distinguishable from the covenant to pay taxes in the Gedge and Elliott cases and we think that the covenant to pay the taxes should be regarded as an agreement to pay them as a part of the rent. There is another clause in the lease which merits attention, in view of the fact that plaintiff is seeking to enforce a forfeiture. It is disclosed by the evidence that the lessee has erected one or more buildings on the premises. In respect to improvements the lease contains the following provisions : “And it is further agreed by and between the parties hereto, that all the buildings and improvements of every kind placed upon the said premises by the party of the second part [472] are to be and remain the property of the party of the second part, and at the termination of this lease may be sold by him to the party of the first part, if the parties can agree upon the amount; if not, then the party of the second part is to have the right to remove the said property from the said premises, or to sell it to some other person or persons, or to re-lease anew. “It is further agreed between the parties hereto, that default of any agreement between the parties as to the purchase price of said buildings at the termination of this lease, that the same shall be referred to a board of arbitrators, two of whom shall be chosen respectively by the parties hereto, and the third to be chosen by the parties thus chosen, which board of arbitrators shall determine the matter referred to them as soon as may be, and fix the price of the said buildings and improvements, as provided in the contract, and that the judgment and findings of the said board is to be conclusive and binding to both of the parties to this contract alikfe; and we do hereby agree to abide by the decision of the said board of arbitrators as to all matters submitted to them for their decision.” The lease does not provide that a forfeiture for the nonpayment of rent shall also forfeit the lessee’s right to the value of his improvements on the termination of the lease by forfeiture. His right to compensation for these improvements is not taken away by his failure to pay taxes. The improvements being upon the leased premises gave him an interest in the premises of which he should not be deprived without compensation. The plaintiff, in disregard of these rights, declared a forfeiture and seeks by her suit to possess herself of the premises including the improvements. Forfeitures are not favored by the law and when it is sought to enforce one, the court will scrutinize the contract very closely for the purpose of ascertaining whether or not the party seeking to enforce the forfeiture has in every particular complied with the terms of the contract in both its letter and spirit and if the court discovers that there is a material benefit secured by the contract to the other party, [473] that be bas not lost by tbe forfeiture and that bas not been restored or tendered to bim, tbe court will refuse to enforce tbe forfeiture. Plaintiff promised to compensate tbe lessee for sucb permanent improvements as be should erect on tbe premises and sbe can not avoid this obligation by declaring a forfeiture of tbe lease for non-payment of rent. Plaintiff made no effort to pay for tbe improvements; to permit an ouster in sucb circumstances would be bigbly inequitable. “Good conscience is tbe beacon light that points tbe way out of a forfeiture,” said McAdam in bis work on Landlords and Tenants (vol. 1, p. 651). It would not be good conscience to permit plaintiff to recover possession of tbe premises and turn tbe defendants out to recover tbe value of their improvements as best they might. Tbe injury done plaintiff can be easily compensated in money. There is no evidence of bad faith on tbe part of the lessee. Mere delay in tbe payment of taxes will not bar tbe right of plaintiff to make compensation and avoid tbe forfeiture. 1 McAdam on Landlords and Tenants, p. 652. Tbe evidence shows that plaintiff was tendered tbe taxes sbe had paid but refused to receive tbe money. A tender once made is presumed to bold good until it is withdrawn by tbe party making it. Plaintiff is entitled to nothing more than what tbe defendant offered her, to-wit, tbe payment of tbe sum she paid out for taxes. Judge Barclay concurs in affirming on tbe ground mentioned in the opinion, but be also considers that tbe taxes are not to be regarded as rent within tbe intent of the parties as expressed in tbe lease. Goode, J., concurs.