McAlester v. Landers

California Supreme Court Jun 29, 1886 No. No. 9159Published

Before: Belcher

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Holding. The court held that a lessor's breach of the covenant for quiet enjoyment, resulting in a judgment against the lessee, constitutes a constructive eviction that allows the lessee to recoup damages against rent, thereby exonerating the lessee's guarantor.

Issues

Whether a lessor's breach of the covenant for quiet enjoyment constitutes a constructive eviction.
Whether a lessee may recoup damages from rent due to a lessor's breach of covenant.
Whether a guarantor is exonerated when the creditor's acts impair the principal's obligation or the creditor's rights against the principal.

Disposition. affirmed

Quotations verified verbatim against the opinion

“the plaintiff’s rights against the company were impaired, and the case is brought within the provisions of the above-quoted section.”

Synopsis

Lease—Quiet Enjoyment—Covenant of Title and Right to Convey — Breach of. •— A lease with an express covenant for quiet enjoyment implies a covenant that the lessor has title to the property leased, and power and right to convey it; and such implied covenant is immediately broken if the lessor has made a prior lease of part of the demised premises, which is still outstanding when the subsequent lease is executed.

Id. —Eviction —Dispossession not Necessary. —A covenant for quiet enjoyment in a lease is not broken without an eviction of the lessee, either actual or constructive. To constitute an eviction, the lessee need not be actually dispossessed.

Id. —Recovery in Trespass against Lessee. —A recovery in an action of trespass brought by a prior lessee against a subsequent lessee of the same land is a sufficient eviction to constitute a breach of the covenant for quiet enjoyment contained in the subsequent lease, although the action was not commenced until after the expiration of the prior lease.

Id. — Measure of Damages. — In such a case, the detriment caused by the breach of the covenant cannot be less than the amount of the judgment for damages and costs recovered against the covenantee.

Id.—Action for Rent — Lessee may Recoup Damages — Counterclaim. —When damages have been sustained by a lessee on account of the breach of a covenant in the lease by the lessor, if an action for rent is brought, the lessee may elect to recoup his damages from the rent, or bring a separate action therefor; and the fact that the lessee has paid the rent for the greater part of the term will not deprive him of the right to recover his damages for the entire term by way of counterclaim.

Id. —Payment of Rent— Exoneration of Guarantor. —A guarantor for the payment of the rent reserved in a lease is exonerated from liability on his guaranty if the lessor has, by the breach of a covenant in the lease, caused damages to the lessee equal to the amount of the rent.

Belcher, C. C. The facts out of which this case arose are as follows:—

In August, 1870, the plaintiff leased to P. M. Darcy and Edward Naughton a tract of 515 acres of land, situate in Marin County, for a dairy and stock ranch. The lease was for a term of five years, with a privilege of two months’ extension, and it remained in full force during the whole term named.

In October, 1874, the plaintiff leased to one Mosheimer, a tract of forty-five acres, which embraced twenty acres then leased to and in the possession of Darcy and Naughton, for the purpose of making bricks. The lease to Mosheimer was for a term of seven years, commencing October 10,1874, and it contained a covenant that the lessee should and might peaceably and quietly have,hold, and enjoy the demised premises for the term aforesaid without molestation by, through, or under the act or acts of the lessor, his heirs or assigns. The rent reserved was nine hundred dollars for each six months of the term, payable in advance, on the 10th of October and April of each year.

Upon the twenty acres, covered by both leases, there were certain springs of water, which were essential to the first lessees for the purpose of watering their stock, and absolutely essential to the second lessee for the purpose of making bricks.

Shortly after its execution, Mosheimer, with the written consent and approval of the plaintiff, assigned his lease to the California Brick Company, and the defendant Landers, in consideration of the assignment, and that the company should have and enjoy quiet and peaceable possession of the premises demised, executed a written guaranty to the plaintiff that the brick company would pay the rent reserved in the lease, and in default thereof he would pay the same.

In March, 1875, the California Brick Company, being ignorant of the lease to Darcy and Naughton, and the [81]twenty acres covered by both leases being apparently unoccupied by any one, entered upon the said twenty acres, and proceeded to construct buildings and build reservoirs, and to dig out and excavate the springs of water thereon, and to use the soil for the manufacture of bricks; and it continued thereafter in the possession and" occupation thereof during the remainder of the term named in its lease.

In July, 1877, an action was commenced by Darcy against the plaintiff here, McAlester, and the California Brick Company, to recover damages for the entry by the company upon the premises leased as aforesaid to Darcy and Naughton, and taking possession of the springs of water thereon, and permitting its horses to enter thereon and upon other lands demised to them, between the thirty-first day of March, 1875, and the fifteenth day of October, 1875, the day of the expiration of their lease.

McAlester v. Landers

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