Buchanan v. Banta

PRESTON, J.

Appeal from judgment in favor of plaintiff in an action in unlawful detainer. The sole question is whether, under the circumstances shown by the evidence, defendants held possession of plaintiff’s property under a month to month tenancy after surrender of lease by operation of law, as found by the court, or whether they held under an assignment of lease by operation of law, as contended by said defendants.

Plaintiff as lessor leased said property for garage purposes for a period of five years at a monthly rental of $200 with a $25 monthly increase for the last three months of the term. Upon execution of the written lease he accepted, to secure performance of its covenants, the sum of $600, which was to be applied on account of the payment of the last three months installments of rental thereunder. The lease also provided that no assignment thereof should be made, without the written consent of the lessor.

In January, 1925, a few months prior to expiration of the term, the lessee agreed to make for the benefit of his creditors an assignment of all his business assets, including said lease, to defendants as a committee representing the

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principal creditors, their purpose being to carry on the business only until such time as it could be disposed of to the advantage of all concerned. This committee called upon plaintiff lessor to discuss the situation, especially with respect to taking over the lease. Plaintiff refused to give them an assignment thereof or to do anything in the matter until he first consulted his attorneys. At a subsequent interview the committee had with them a document assigning the lease and other assets for the benefit of the creditors executed by the lessee, and also executed by many of the creditors, which instrument contained the following covenant: “To pay the costs and charges of these presents . . . which specifically includes the payment of rent to Warren Buchanan according to the terms of the aforementioned lease. ’ ’ A place had been provided thereon for signature by the said lessor, but, although he examined the paper, for an unexplained reason it was never signed by him.

As to the conversation between the parties at their various meetings and as to their resulting agreement and mutual understanding, the evidence is in sharp conflict. Plaintiff testified that he positively refused at all times to assign the lease, but permitted the creditors to go in under a month to month tenancy until such time as they could dispose of the business. The three defendants and an interested attorney testified that it was understood that the creditors were taking possession under an assignment of the lease with the benefit of all its provisions, for were it otherwise they would have refused to attempt any adjustment of the lessee’s affairs by taking over his business. It was also understood by these parties that in the event of a final sale of said business during the term of the lease the privilege of taking an assignment thereof would be extended to the purchaser.