City of Plattsmouth v. New Hampshire Sav. Bank

POLLOCK, District Judge, after stating the case as above, delivered the opinion of the court. From an inspection of the record it is quite clear the judgment entered was intended to be and is based upon the claim made against the city for rentals at the rate of $233.33 per month, or $2,800 per year, during the time the city remained in possession of the plant from November 15, 1900, to March 1, 1902, at which time the property was turned over to the receiver. This appears from a reading of the application made against the city, and the fact, as shown by the decree, the credit of $1,800, claimed by the city and awarded by the trial court, was made by the city and allowed by the court as a payment of the only semiannual installment of interest falling due and unpaid prior to the date the receiver took possession of the property. For, if it be the city was liable to complainant for that portion of the semiannual installment of interest on the bonds falling due on June 1, 1902, earned while the city retained possession of the plant, in such case the personal property of the city turned over to the receiver, and credited to the city in the computation made in the. decree at its stipulated value of $805.30, is more than sufficient in amount to meet such obligation. It follows, therefore, the sole question for decision here is, was complainant entitled to a judgment against the city based on this claim for-rentals at the rate of $233.33 per month, or $2,800 per year, under the terms of the lease, from November 15, 1900, to March 1, 1902, construed in the light of the conduct of the city with reference to the property after November 15,1900? It is conceded whatever rights the light company had, under the provisions of the lease, against the city, by virtue of the mortgage, passed to, became the property of, and are enforceable by, complainant. It is perfectly obvious, however, the rights of complainant [635] thus transmitted cannot exceed those acquired by the light company. The precise question involved, therefore, is, what rights did the light company acquire against the city by reason of its continued occupancy of the leased premises after the expiration of the absolute term of 4 years and 15 days specified in the lease ? It is the insistence of solicitors for appellee in this regard that, as the tenant (the city) continued in possession of the leased premises after the expiration of the term for which they were originally let without notice to the landlord of its election to exercise either the option to renew the lease as provided for in article 4, or to terminate it as provided in article 5, or to purchase the leased premises as provided in article 10, it must be held as a matter of law to have assumed the position of a tenant holding over its term' with the assent of its landlord; hence the law will imply an agreement on the part of the city to pay rent thereafter from year to year upon the same terms and conditions imposed by the lease on the original term. This is the view entertained by the trial court respecting the rights of the parties, as shown by the following excerpt from the opinion: “The retaining of the possession of the leased property being with the apparent consent of the gas [light] company, it, and consequently the complainant, can claim rent for the period which the city actually occupied the leased property in accordance with the terms of the original lease.” The contention of the city is, it at no time assumed the position or incurred the liability imposed by law upon a tenant holding over the term,'but that its continuance in possession of the premises after November 15,1900, was in pursuance of the express provisions of the lease as to the amount of rent reserved thereafter, and that by payment of the semiannual installment of interest due December 1, 1900, to the trustee, which payment included interest falling due on the bonds for the period of 15 days after the original term of the lease, and which payment was accepted and retained by the trustee of the light company, and the bondholders as well, for their benefit, the city evidenced its intent to continue the tenancy under article 4 of the lease, with the knowledge of the light company and complainant of its intention. These, in substance, are the claims of the respective parties to the controversy. It must be conceded to be the general rule, in the absence of statute, when a tenant for years, with the consent of his landlord, either expressed or implied, holds over his term, in the absence of stipulation to the contrary, the law will imply a tenancy from year to year, with the same rent reserved and time of payment stipulated for in the original lease. Singer Manufacturing Company v. Sayre, 75 Ala. 274; Wolffe v. Wolffe, 69 Ala. 549, 44 Am. Rep. 526; Clinton Wire Cloth Co. v. Gardner et al., 99 Ill. 151; Tolle v. Orth, 75 Ind. 298, 39 Am. Rep. 147; Schuyler v. Smith et al., 51 N. Y. 309, 10 Am. Rep. 609; Witt v. Mayor, etc., of New York, 6 Rob. (N. Y.) 443; Quinette v. Carpenter, 35 Mo. 502; Diller v. Roberts, 13 Serg. & R. (Pa.) 60, 15 Am. Dec. 578; Ives v. Williams, 50 Mich. 106, 15 N. W. 36; Martin v. Hammersky, 63 Kan. 360, 65 Pac. 637. Such [636] appears to be the rule in the jurisdiction where this controversy arose. Bradley v. Slater, 50 Neb. 682, 70 N. W. 258. If, therefore, the city, in the light of the facts stated, is to be deemed a tenant holding over its term with the implied assent of the light company, an affirmance of the decree entered must follow, of course. The rule applied by -the courts to cases where a tenant for years holds over his term with the implied consent of his landlord sprung from the necessity which arose in such case that, where the parties had continued the original status in the absence, of any agreement between them, having neglected to make the same, the law should step in and imply a reasonable, fixed, and definite agreement for the parties, based on their former agreement. However,-this rule has no application to cases, where it may be gathered, from the contract of lease theretofore existing between the parties or otherwise, that the parties have made a valid agreement of their own touching the nature of the tenancy and rent reserved after the expiration of the time fixed in the original lease. Recurring, now, to the lease in question, may it be said, in view of its express provisions, the parties thereto neglected to provide therein for the exact contingency which arose in this case at the expiration of the original term of 4 years and 15 days, namely, the continued possession of the city after November 15, 1900, to March 1, 1902? There is no contention made that the city elected to exercise the option to purchase the property, provided for in article 10; hence, that provision may be left out of the consideration. Article 4 of the lease in express terms states the nature of the tenancy to be created, the amount of rent to be paid and the time and place of its payment, in case the city should elect to continue the tenancy after the expiration of the original 4 years and 15 days’ term, and further provides: “That on and after the 15th day of November, A. D. 1900, the said city of Plattsmouth, Nebraska, is hereby granted the right and shall have the power to continue this lease from year to year upon-the terms and conditions herein set forth for a period ending on the first day of June, 1910,” etc. The light company, in our opinion, thus not only by necessary implication waived notice of the election of the city to continue the lease beyond the original term, but expressly conferred upon the city irrevocably the power to thus continue the lease of its own volition, and without any subsequent arrangement with or notice to the light company, upon payment of rent as therein specified. The force of this article becomes more apparent when we refer to the provisions of article 5, which provides, not that notice of the election of the city to continue the tenancy after November 15, 1900, shall be given, but that it shall give 60 days’ notice in writing of its intention to terminate the tenancy created by the lease, on or after the 15th day of November, 1900, if the city desired to end the term. As has been seen, such notice was given December 9, 1901, and the tenancy created thus terminated. Again, by reference to the stipulation for surrender of possession by the city, found in article 11, it will be seen to relate, not specific [637] ally to the date November 15, 1900, as the end of the term, but in general language to any expiration that might occur at any time under the former provisions of the lease. The language employed by the parties to this lease is clear, exact, definite, positive, and certain, free from all semblance of ambiguity, and hardly susceptible of doubtful construction. The continued possession of the premises by the city was not the holding over by it after the expiration of a fixed and definite term with the implied consent or assent of the light company, but was a continuance of the tenancy by the city in strict accordance with the express agreement of the parties, as evidenced, not alone by the language of the lease itself, but also by the subsequent conduct of the parties. This view of the case, we are persuaded, is in harmony with the current of authorities. Andrews v. Marshall Creamery Co. (Iowa) 92 N. W. 706, 60 L. R. A. 399, 96 Am. St. Rep. 412; Kramer v. Cook, 73 Mass. 551; Delashman v. Berry, 4 Am. Rep. 393; Montgomery v. Board of Commissioners of Hamilton County, 76 Ind. 365, 40 Am. Rep. 250. We are further persuaded the construction placed upon the different articles of the lease gives effect to the whole instrument, and makes plain and renders effective the intent of the parties thereto. It follows the judgment must be reversed, and case remanded, with directions to dismiss the application.