Sheets v. Selden — 74 U.S. 416

Majority

p. 416

Sheets v. Selden.

Syllabus

1. The .action of an inferior court as to the terms on which it will allow a complainant; to amend a bill in equity to which'sit has sustained a demurrer, is a matter within the discretion of such court, and not open to ' examination here on appeal.

2. Where, under a clause of re-entry for non-payment of rent reserved, a landlord sues in ejectment, in Indiana (in which State a judgment in ejectment has the same conclusiveness as common law judgments in other cases), for recovery o.f his estate, as forfeited, and a verdict is found for him, and judgment.given accordingly, the tenant cannot, in another proceeding; deny the validity of the lease, nor his possession, nor his obligation to pay the rents reserved, nor. that the instalment of rent demanded was due and unpaid.

3. Where, in a lease of a water-power, the lease proyides.in- a plain way. and with a specification of. the rates for an abatement of rent.for'every ■failure of water, the tenant cannot, on a bill by him to enjoin a writ ofpossession by the landlord, after a recovery by him at law for forfeiture of the .estate for non-payment, of rent reserved,'set up a counter claim for repairs to the water-channel made necessary by the landlord’s gross negligence. - He is confined to the remedy specified in the lease; a covenant that a lessor will make repairs not being to be implied.

4. In such a case, before he can ask relief from a forfeiture, he should at least tender the diflerence between .the amount of rents due, and the amount which he could rightly claim by way of reduction for failure of water.

Error to the Circuit Court for Indiana.

The State of Indiana, owning a certain canal and its adjacent lands, made two leases of its surplus water; the first being made, February, 188(1, to one Yandes 'and a certain Sheets,(this Sheets being the appellant in this case), and the other made'January, 1840, to Sheets alone. Each lease was for the term of thirty years.' Certain rents, payable .semir-annually, on the first of May and November, were

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reserved: it being provided, that if any rent “should remain unpaid for one month from- the time it shall become due,” “all the rights and privileges” of the-lessees “shall cease and determine, and any authorized agent of the .State, or lessee under the State, shall have power to enter upon and take possession of the .premises,”-&c. The leases 'contained a further.- provision, that the lessees should not be deprived of the use of the water by any act of the State, or its agents, or by the inadequacy of. the supply of water, for more than one month in the aggregate in one year; and that if, for the purposes of repairing the canal, preventing breaches, or making improvements do the canal, or the works connected with it, or the inadequacy of the supply - of water, the lessees should be deprived of the use of any portion of the water-power leased, such'deduction should be. made from the rent accruing on such portions of the power-as the lessees should be prevented from using, as would bear dhe sarnie proportion to the yearly rent thereof as the time during which the lessees might have been deprived of its use bears to eleven months. .In October, 1840, Sheets' became owner of Yandes’s interest .in the lease of 1839.

The State subsequently sold so much of the canal, land; and water-power as >yas embraced by the two leases; and one Selden and others, on the 2d of October, 1867, became owners under this sale.

Afterwards (Sheets being in possession, under the leases, and having refused for several years to pay rent), the purchasers formally demanded, on the premises', rents falling due on the first day of May, 1860. The lessee failing to pay them, the purchasers -brought, in June, I860, an ejectment' in' the Circuit- Court for Indiana (in which State the actioD of ejectment is regulated by statute, and has the same con-’ elusiveness as common law judgments in other cases),'to. re- ' cover the possession of the property, as for forfeiture from non-payment of the rents .reserved- in. the two leases. Verdict and judgment were given in their favor.^[2]

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After, .five years had elapsed since the commencement of the ejectment) the lessee now filed a bill in equity- (the ' suit below) to enjoin the issuing of a habere facias on the judgment in ejectment, and fpr a redemption of the lands from the forfeiture incurred for non-payment of rent. •

The bill' alleged that while the ejectment was pending, The lessees tendered to the purchasers $400,' as in full 'for the particular rents, for the non-payment of which the forfeitures were declared, and as in full for interest thereon, and the costs of suit' up to that time, and that the same was now brought into court for' t'he purchasers if they would accept it and waive the forfeiture; but'it tendered nothing for reñís subsequently or previously accrued. ’ It sought to ' avoid such a tender by asserting an equity to set ofi‘ against all rents a demand for damages on account, of alleged breaches of covenants, contained in the leases. As for— '

' 1. Inadequacy' in the supply of water, when by- the use of proper efforts, an adequate, supply might have been furnished.

1. Inadequacy of Supply, owing to the culpable negligence and gross carelessness of the purchasers in failing to repair 'breaches in the canal banks,, and' to remove obstructions created by the growth of grass 'in the bottom ánd sides Of the 'canal,. &c., setting up the expense of repairs alleged to -have been made by the lessee to render the supply adequate.

8. Not prohibiting lessees under subsequent leases'from drawing off needed water from the mill" of the original lessee to supply .their own.

The claim of reductions' of the rents owing to failure of water were from the 2d October, 1852, when the title of the -purchasers accrued, to. the 1st May, 1865, when the last instalment of rents before the filing of the bill-came <jue,. and amounted to $2649. The rents during the same term amounted to $4500.

The'lessee alleged as an excuse for not paying the rents .on one of. the' leases; that he had abandoned that lease, and that- the purchaser under the State acquiesced, and that the title so became vested in them by reverter, and declined to

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redeem that lease from forfeiture. While thus declining to redeem that lease, his hill sought to enjoin the whole judgment.

The defendants demurred; and the court sustained the demurrer; giving leave to the complainant to.amend his bill on tender of all 'the rent, with interest on it that had accrued on both leases since the bringing of the ejectment, which sums the court found to be, on one lease $4494.50, and on the other $2247.25. The complainant refusing to amend on such terms, judgment was given on the demurrer, against him, and he brought .the case here.

Mr.' Barbour {a brief of Mr. Morrison being filed), for the appellant:

1. Assuming, as we have the right to assume (the ease being on a demurrer),, that the facts alleged in the bill of complaint are,true, the permission to amend was clogged by an onerous and inequitable condition. The suit in ejectment embraced premises covered by two several and independent leases, executed on' different days, and to different parties, one of them to Yandes and the appellant, the other to the appellant alone; and yet the court ruled, that the two, for' all the purposes of this suit, were one and indivisible, and that therefore, an ample tender,, for the purpose of redeeming either one of them, would be of no avail, unless it should be sufficient to cover the other one also. Iix this there- was erroi’. The appellant .had the right to pay the sum demanded for the quarter's rent of the premises held under the first lease, had he elected to do so. And if he bad done this, the appellees could have declared no forfeiture as to that lease. The demands were sepax’ate and distinct acts, for distiixct sums.- The appellant had the right to save either premises, and let the other go, if it pleased him.

Even if the bill of complaint did not show a case that should entirely and fully absolve Sheets from all his obli-- ■ gations under, the lease to himself) still its defects, ixx that regá'rd, cannot affect so fatally the other lease.

2. The bill, as to the lease not surrendered, contaiixs suffi

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cieut equity to entitle the appellant to be rel eved as to it. The court below assumed that the lessees could claim nothing by way of s.et-off, or recoupment,- for any damages or injury sustained by them, consequent upon the failure to supply water, except an abatement of rents for such time as they might have been deprived of the specified supply, beyond one month in each year.

The assumption is .unwarranted, unless it is shown that the appellee had used some diligence to furnish the requisite supply. But the bill avers, and the demurrer admits that the appellant was deprived of the water-power by the culpable carelessness and gross negligence of the appellee.

■ If these averments would not entitle the appellant to damages against the appellee-, as' well as to an abatement of rents, then the latter, would not be liable, had he cut the canal banks, and thereby deprived the appellant eleven, months in the year.

The demise of the water-power and the land is equivalent to a covenant that the water shall be supplied. No particular words are necessary to constitute a covenant in a lease. It is sufficient if it ;be such as to show the intention of the party to bind himself to the performance of the matter stipulated for; and when covenants exist they are to be construed acbording to the apparent intention of the parties, looking to the whole instrument, and to the context, and the reasonable sense and construction of the words; so that a covenant-is broken if the'intention is not carried out.^[2]

The general rule, that unliquidated-damages cannot be'set off' or recouped in an action at law, is admitted; but the-rule does not hold in equity, which is independent of statutes of 'set-off; and, besides, this being a suit in equity, the court will seé to it, that the decision shall settle the mutual rights of the parties, fully and completely.

Mr.. T. A. Hendricks, contra.

delivered the opiuion of the court.

This is á case in equity. The appellant filed his bid to

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enjoin the execution of a judgment in ejectment. The defendants demurred, and the demurrer was sustained.

The court gave leave to amend upon terms which the appellant declined to accept. A decree was thereupon entered that the bill should be dismissed, and forhosts. This appeal brings the case here for review.

With the leave to amend we have nothing to do. The terms imposed were within the.discretion of the court, and áre not open to examination in this proceeding.

The only question before us is, whether the Circuit Court erred .in sustaining the demurrer and dismissing the case. ■ The bill is very voluminous. We will consider the points'1 to which our attention has been called, so far as is necessary ■to the proper determination of the rights of the parties.

The recovery wap had in the action of ejectment, upon the ground of. forfeiture for the non-payment of the rents reserved in two leases.

• Both courts of law and of equity have power to give relief in cases-of this kind. Courts of law give it upon motion, which may be made before or after judgment. If after judgment, it must be made’ before the execution is executed. The rent due, with interest and costs, must be paid. Upon this being done, a final stay of proceedings is ordered.^[12]

The first British statuté upon the subject was the 4th (Jeorge II, eh. 28. The practice is now regulated by the 15 and 16 Victoria, ch. 76. ■

Courts of equity are governed by the same rules in the exercise of this jurisdiction as courts of law. All arrears of rent, interest, and cos.ts must be paid or tendered. If there be no special, reason to the contrary, an injunction thereupon goes to restrain further steps, to enforce the forfeiture. The grounds upon which a court of equity proceeds aré, that the rent is the object of the parties, and the .forfeiture only an incident intended to secure its payment; that

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the measure of damages is fixed and certain, and that when the principal and interest are paid the compensation is complete. In respect- to other covenants pertaining to leasehold estates, where the elements of fraud, accident, and mistake are wanting, and the measure of compensation is uncertain, equity will not interfere. It allows the forfeiture to be enforced if such is the remedy provided by the contract. This rule is applied to the covenant to repair, to insure, and not to assign. Lord Eldon limited the relief to cases where the lease required the payment of a specific sum of money. The authorities going beyoud this he held to be unsound, and declined to follow them. Speaking of Wadman v. Calcraft,^[12] he said the Master of the Rolls in that case held, “ that, though against ejectment for non-payment of rent the court would relieve upon a principle long acknowledged iu this court, but utterly without foundation, it would not relieve where the right of the landlord accrued, not by non-payment of rent, but by the non-performance of covenants which might be compensated in damages.”^[13] Such is' now the settled English rule upon the subject.^[10] Iu Brace-bridge v. Buckley,^[11] Baron'Wood, in. a dissenting opinion, made an earnest and able assault upon this doctrine. The question may be regarded as _yet unsettled in the jurisprudence of this country.^[6]

Lord Redesdale held that where there were unsettled accounts between the landlord and tenant, which could not be properly taken at law, the payment or tender of money' on account of the rent might be deferred until the rights of -the parties were settled by the decree of the court, but that where the accounts were not of this character, equity would not intervene.^[7]

ǁ ǁ 2 Story’s Eq., §§ 1315, 1316, and notes.

¶ ¶ O’Mahony v. Dickson, 2 Schoales & Lefroy, 400; O’Connor v. Spaight, 1 Id. 305.

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The recovery in ejectment is'an important feature .-in the pase before us. In Indiana the action is regulated by statute;, and the judgment has the same Conclusiveness and. effect as common law judgments in other cases. The judgment against the appellant established the validity of the leases, ihát he was in possession, his obligation to pay the rents reserved, and that the instalments demanded were due and unsatisfied. He is estopped from denying these facts, and from setting up . anything in this case to the contrary.

In the case of the Trustees of the Wabash and Erie Canal v. Brett,^[12] the trustees bad'leased so much of the surplus water of the canal as might be necessary for the purposes specified. The right was reserved, upon paying for the mill to be built by the lessee, to resume the use of the water leased whenever it might be necessary for navigation, or whenever its use for hydraulic purposes should be found to interfere with the navigation of the canal. It was averred that the trustees had abandoned that part of the canal, and suffered it to go to decay, so that the water-power was destroyed, and,the plaintiff’s mill rendered valueless. The court held that there was no implied coyeuant to keep the canal in repair, that the express provision for compensation in, one case excluded the implication of such right in all others, and that the plaintiff was without remedy. This case, like the one under consideration, was decided upon a demurrer by the defendants.

The tendency of modern decisions is not to imply coveuants which might and ought to have been expressed, if intended.^[13] Acovenant is never implied that the lessor will make any repairs.^[10] The tenant cannot make repairs at the expense of the landlord, unless by special agreement.^[11] If a demised house be buimed down by accident, the rent does'

‡ ‡ Pomfret v. Ricroft, 1 Williams Saunders, 321, 322, note 1; Kellenberger v. Foresman, 13 Indiana, 475.

§ § Mumford v. Brown, 6 Cowen, 475.

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not qease. The lessee continues liable as> if the accident-had not occurred.^[12] If in such a case the landlord receives insurance-money, the tenant has no equity to have it applied to rebuilding,.or to restrain the landlord from suing for the rent until the. structure is restored.^[13]

The Trustees of the Wabash and Erie Canal v. Brett is an authority strikingly apposite in' this case. In the leases set out in the bill, as in th$ lease in that case, the parties provided but -one remedy for a failure of water. That is, an abatement of the rent in proportion to the extent and time of the deficiency. The contract gives none other. Beyond this it is silent upon the subject. This'court cannot interpolate what the contract does not contain. We can only apply the law to the facts as we find them. The appellant is entitled to the remedy spécified. . Expressum, facit- cessare taciturn. Neither a court of equity nor a court of law can aid him to any greater extent.'

This sweeps from the caáe the claims set up in the bill by •the. appellant for offset, repairs, recoupment, and damages,leaving to be considered only the claim for a reduction of the rents in the manner stipulated by the parties.

■ The appellant averk that he abandoned the premises covered by the second lease, that the appellees acquiesced, and that his title thus béeame vested in them by reverter. This is repelled by the verdict and judgment in the action of ejectment.

He insists that, according to-the provision referred to in the leases, he is entitled to a reduction of the rents specifically demanded before the commencement of the action of ejectment. The-plaintiffs could not have recovered without proving to the satisfaction of the jury that the exact amount .demanded was due. Any failure in this respect would have been fatal to the action. Then was the time for the appellant-'to assert and prove this claim. He cannot do it now. The judgment is conclusive.

* Moffat v. Smith, 4 New York, 126.

† † Leads v. Cheetham, 1 Simons, 146; Loft v. Dennis, 1 Ellis & Ellis, 474.

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. ' The bill claims reductions of the rents for failure of water from the second of October, 1857, when the title of the de-' fendants accrued, down to-the first of May, 1865, when the last instalments, before the filiug of the bill, became due, amounting in the aggregate to $2649. The rents, during, the same, period, amounted to a much larger sum. "Conceding the appellant’s demand to be correct, he should at least have tendered payment of the difference between these ' two amounts, and.interest, before bringing his bill.' In not alleging that he had done so the bill is fatally defective.-

A case is not presented upon -which a court of equity, according to the settled principles of its jurisprudence, is authorized to interpose. The spirit manifested by the appellant throughout the litigation between the parties, as disclosed by the bill, is not persuasive to such a tribunal to lend him its aid. ' W e think the demurrer was well taken. The decree of .the Circuit Court is

Aeeirmed

Footnotes

* Tidd’s Prac., 3 Amer. Ed. 1234; Phillips v. Doelittle, 8 Modern, 345; Smith v. Parks, 10 Id. 383; Atkins v. Chilson, 11 Metcalf, 115.
* 10 Vesey, 68.
† † Hill v. Barclay, 18 Vesey, 63.
‡ ‡ 2 Story’s Eq., §§ 1315, 1316; Davis v. West, 12 Vesey, 475; Reynolds v. Pitt, 19 Vesey, 134; Gregory v. Wilson, 10 English Law and Equity, 138; Eaton v. Lyon, 3 Vesey, 690; Hill v. Barclay, 16 Id. 402.
§ § 2 Price, 200.
* 25 Indiana, 410.
† † Aspdin v. Austin, 5 Q. B. 671; Pilkington v. Scott, 15 Meeson & Welsby, 657.