Walter H. Sullivan, Inc. v. Johnson

SPENCE, J.

Plaintiff sought reimbursement from defendant in the sum of $2,155.70 for money paid out in settlement of a judgment and for necessary expenses incurred in the defense of an action brought by the lessee of certain premises after a wrongful eviction. From a judgment in favor of defendant plaintiff appeals.

The facts are not disputed and even as presented in the trial court the controversy involved solely an issue of law. The lessor Wright, a predecessor in interest of both plaintiff and defendant, leased the premises to the lessee Warren in 1925 for a term of five years. At the time of the execution of the lease Warren delivered to Wright the sum of $2,500. With respect to this sum the lease provided, “That the Lessor, in consideration of the sum of two thousand five hundred dollars ($2500), . . . paid to the Lessor by the Lessee, . . . and in further consideration of the rent to be paid and the covenants and agreement to be performed by the Lessee, . . . does by these presents lease unto the Lessee ...” The lease further provided that, “if, at all times during the said term; the Lessee shall perform . . . the Lessor will pay the Lessee interest at the rate of six (6) per cent per annum upon the said sum of two thousand five hundred ($2500) . . . which said interest shall be payable annually . . . and the Lessor will credit the Lessee with the said sum . . . upon the five (5) instalments of rent of the said premises last maturing, ... at the rate of five hundred dollars ($500) upon each of the said instalments of rent”.

[593]

Thereafter Wright conveyed the premises to plaintiff, who then conveyed the premises to defendant. Subsequently the property changed hands upon several occasions during 1926 and 1927. At the time of each transfer of title the $2,500 delivered by Warren to Wright was credited by the grantor upon the purchase price paid by the grantee. In August, 1927, the then owner of the premises wrongfully terminated the lease and evicted Warren from the premises. After his wrongful eviction Warren brought an action against his original lessor, Wright, to recover the $2,500. Wright called upon plaintiff, as her grantee to whom she had paid said sum, to assume the defense of the action and hold her harmless. Plaintiff similarly called upon defendant to whom it had paid the money. Upon defendant’s failure to defend the action against Wright, plaintiff assumed the defense. In that action the lessee Warren recovered judgment. Plaintiff negotiated a settlement and in December, 1929, paid to Warren the sum of $1750 in satisfaction of the judgment. Thereafter on the ninteenth day of December, 1929, plaintiff made demand on defendant for said $1750 together with the sum of $405.70 necessarily expended as counsel fees and costs in the defense of said action. Upon defendant’s refusal to pay said sums plaintiff commenced the present action.