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STEWART, J., delivered the opinion of the court.
There are two agreements between the parties involved in the case. The one being the lease of the distillery and premises, at a specified rent; and the other, in regard to the offer to sell the same property, under which plaintiff's claim one thousand dollars for the privilege given to defendant to purchase the property within twelve months.
Three exceptions were taken by the defendant to the rulings of the court. The first and second of which raise questions as to the admissibility of testimony, and the third excepting to the granting of plaintiff's' two prayers; and the rejection of the six prayers of the defendant.
The contract between the parties in regard to the claim of the plaintiffs of one thousand dollars, is a distinct agreement for the payment of that sum, for the privilege of purchasing the property; and involves no question of penalty or liquidated damages for its non-performance.
It is not a bargain and sale of the property at $5,000, but a proposition and obligation on the part of the plaintiffs, to sell it to the defendant at that price with the privilege to him to make the purchase or not, as he may determine within the year.
For this option, which was a valuable privilege, he agrees to pay the 81,000 in the event of his declining to make the purchase.
The defendant acquired the right under the contract, to purchase the property for the proposed price.
The plaintiffs had obligated themselves to sell at that price; but the defendant was under no obligation to buy. He merely bound himself to pay the $1,000 for the privilege of buying, and in case he did not buy. It was entirely optional with the defendant to purchase the property or let it alone; whilst the plaintiff's had abandoned the right to make sale to any one else during the year,
That was a sufficient consideration for the defendant's obligation. This we understand, to be the nature of the contract between the parties as to this particular. There is no ground for the theory, that the contract imported a bargain and sale of the property, obligatory as such upon the parties; and that the thousand dollars was provided as the penalty for its enforcement upon the defendant.
Such construction would make a different contract for the parties, from what they have stipulated.
We find no error in the exclusion of the parol proof, offered by the defendant in his first exception.
Such testimony was clearly inadmissible, in the face of the written agreements of 16th January and 25th February, 1873, introduced as evidence by the defendant himself.
In the absence of these agreements, whether the proposed testimony might be adduced to prove waiver, or extension of the time, for performance of the original agreement, notwithstanding the Statute of Frauds requiring the contract as to the sale of lands to be in writing ; or the rule of the common law disallowing parol testimony, to contradict, add to, or vary the terms of the written contract, it is unnecessary to decide.
There was error in the refusal of the testimony offered by the defendant in the second exception.
The plaintiffs had rented to the defendant the distillery and premises for one year, at $125 per month.
According to the terms and provisions of the lease between the parties, the property was rented to be used and employed by the defendant as a distillery; the defendant was to repair and improve the property, as he might desire at his own expense, but all such improvements, fixtures, and machinery put upon the distillery or premises rented, to become the property of the plaintiffs at the termination of the lease, without cost to them.
The distillery could not be run and conducted by the defendant escept in compliance with the Revenue Laws of the United States, applicable thereto.
This the parties must be presumed to have known. The plaintiffs, having made the lease to the defendant for such purpose, must be considered as having entered into such contract subject to the provisions of the laws regulating that pursuit; and the contract between the parties is affected thereby.
Under the Internal Revenue Acts of Congress (see Revised Statutes, title 35, $ 3262), the bond of the defendant as a distiller, renting and not owning the property in fee, was not authorized to be approved, and he could not lawfully carry on the distillery, unless he filed with the collector the written consent of the plaintiffs as the owners of the property in fee.
The plaintiffs having rented their property for such purpose, if they refused to give their consent in writing to the defendant, as required by the law, preliminary to the use of the distillery, it would be unjust towards the defendant for them to undertake to exact rent for the premises, if they had failed to supply him with the necessary legal muniment to enable him to carry on the business.
It is not to be intended that they designed that the defendant should make use of the distillery in violation of the law. The default of the plaintiffs in that particular would amount to “ constructive eviction,” to all intents and purposes, so far as the legitimate employment of the property is concerned. Taylor's Landlord and Tenant, $ 380.
The obligation of the plaintiffs to give their consent as demanded by the law, must be implied as a necessary incident to the lease in question, as fully as if there had been a positive stipulation to that effect.
Although there was no express covenant for the legal employment of the property leased, as a distillery, it is a necessary implication from the circumstances and nature of the lease.
The payment of the rent is to be taken as the equivalent and consideration for the beneficial enjoyment of the premises as a distillery, so far as such consent could contribute to that result; and the lessors had no right to withhold it, and yet expect to be paid the stipulated rent; such act on their part was indispensable to the consummation of the lease between the parties.
They were as much bound, as the owners of the fee of the property, to give their written consent, as to allow the tenant to take possession of the distillery and premises, which, although not mentioned, was an implied covenant affecting the lease.
This contract, like any other, must be expounded to give effect to the intention of the parties, according to the reasonable import of the terms of the instrument, the circumstances affecting it, the character of the property, the purposes for which it was leased, and the employment to which it was to be devoted.
The mutual obligations of the parties growing out of the contract, must be understood and defined with reference to all these considerations.
Where there are no express stipulations upon the subject, such facts furnish sufficient evidence, from which the agreement may be inferred between the parties, quite as controlling as positive stipulations.
Without the written consent of the lessors the lease of the property as a distillery would be a nugatory and incomplete act. See Taylor's Landlord and Tenant, $$ 244-245-247-252.
The lessors having instituted the action for the recovery of the rent, the tenant has the right to recoup damages for any breach or non-performance of duty on their part, to the extent of the rent. Taylor's Landlord and Tenant, $$ 317-374-378.
Such being the view we take of the contract between the parties, and the rulings of the court below, in the first and second exceptions, there was error in the third exception, in the granting of the plaintiff's' first prayer, but their second prayer was properly granted, and the defendant's prayers refused.
Judgment reversed, and new trial ordered.
(Decided 14th April, 1875.)
A motion for a rehearing of the foregoing case was made by the appellees on the 23d of April, 1875. This motion the court overruled, and at the same time filed the following opinion:
BARTOL, C. J. The motion for a rehearing of this cause having been considered, it is hereby ordered that the same be overruled.
Upon a careful examination of the Acts of Congress to which we have been referred, we find no error in the opinion heretofore filed. The general expression therein, that the appellant " could not lawfully carry on the distillery, unless he filed with the collector the written consent of the plaintiffs as the owners of the property in fee, &c.,” is substantially correct; for though the Act provides a mode by which the distillery might have been carried on, without the written consent of
the appellees, yet this provision did not secure to him an absolute right which he could have exercised; but it was made entirely dependent upon the will and discretion of the Commissioner.
Motion overruled. (Decided 24th June, 1875.)
BEAL v. BOSTON CAR SPRING COMPANY.
SUPREME JUDICIAL COURT OF MASSACHUSETTS.
[Reported 125 Mass. 157.] Contract for rent due under a written lease made by Heyer Brothers to the defendant for the term of five years from April 1, 1874, and by Heyer Brothers assigned to the plaintiff.
At the trial in the Superior Court, before Allen, J., it appeared in evidence that the premises described in the lease of Heyer Brothers to the defendant constituted a part of the same premises which Heyer Brothers held under and by virtue of a lease to them for a term of ten years from April 1, 1874, made by the plaintiff, who was the owner of the premises ; that on February 7, 1877, when the plaintiff received the assignment from Heyer Brothers of their lease to the defendant, he executed upon the back of the original lease from himself to Heyer Brothers the following instrument: “ Boston, February 7, 1877. The within-named lessor, in consideration of the assignment to him of certain underleases made by the within-named lessees of parts of the premises demised in the within lease, and of one dollar to him paid by the within-named lessees, doth hereby release and forever discharge the said lessees, their heirs, executors, and administrators, of and from all claims, demands, and causes of action of and concerning the within lease, and especially all claims by him for rent thereunder; and said lessees do hereby surrender and yield up the said lease and the premises within described to said lessor, and such surrender is hereby accepted by him, but without prejudice to the leases of parts of the premises assigned to him as above mentioned.” It further appeared that the terms of this instrument were carried out, and that Ileyer Brothers ceased to occupy the premises.
The defendant offered to show that it had not been in the occupation of the premises since February 7. This evidence was objected to as being immaterial, and was excluded.
The defendant contended and asked the judge to rule that if, by the arrangement entered into between the plaintiff and Heyer Brothers, the original lease was on February 7, 1877, given up, discharged or vacated, and the tenancy of Heyer Brothers thereupon ceased, and the plaintiff resumed control of the premises, and Heyer Brothers at the same time assigned and transferred to the plaintiff the underlease before then held by the defendant from them; and if the defendant, when informed of this, ceased to have anything further to do with the premises, and refused to recognize as longer subsisting or continuing in force the underlease given to them by Heyer Brothers, or to become liable to the plaintiff as assignee thereof in any way, the plaintiff could not maintain his action.
The judge refused so to rule, but ruled that the plaintiff was entitled to recover; and directed the jury to return a verdict for the plaintiff. The defendant alleged exceptions.
F. A. Brooks and A. S. Hall, for the defendant.
ENDICOTT, J. The plaintiff, being the owner of the estate, leased the same for the term of ten years to Heyer Brothers; and they, on the same day, leased a part of the premises to the defendant for a term of five years. It is to be inferred from the subsequent agreement between the plaintiff and Heyer Brothers that other underleases were made. Before the expiration of the underlease to the defendant, Heyer Brothers assigned it to the plaintiff; who at the same time indorsed on the original lease to Heyer Brothers an agreement releasing them from rent and accepting the surrender of their lease and the premises, " but without prejudice to the leases of parts of the premises assigned to him." This agreement was made in consideration of the assignment to the plaintiff of the underleases by Heyer Brothers.
The intention of the parties is plain. Heyer Brothers having made underleases of parts of the premises which the plaintiff was willing to take, and desiring also to surrender the reversion in these leases to the plaintiff, which he was willing to accept, the underleases were assigned, including the defendant's, and the surrender of the original lease accepted without prejudice to the underleases. They evidently did not intend that the rights of the plaintiff under the assignment, or the estates of the sub-lessees, should be destroyed by the surrender, for the language of the acceptance carefully provides for both. The purpose was to put the plaintiff precisely in the position of Heyer Brothers. This intention, as expressed in the papers they have executed, will be carried out, if consistent with the rules of law, and we are of opinion that it is.
The plaintiff brings this action, as assignee of the lease, to recover upon the defendant's covenant to pay rent; and it is well settled that when a lease is assigned without the reversion, the privity of contract is transferred, and the assignee may sue in his own name for the rent accruing after the assignment. Kendall v. Carland, 5 Cush. 74; Hunt V. Thompson, 2 Allen, 341. The only objection suggested to the plaintiff's right to recover is the surrender of the lease of Heyer Brothers to the plaintiff; and the claim is, that the rent due from the defendant is an incident of the reversion in Herer Brothers, and, the reversion having been extinguished by the surrender, all remedies incident to it are taken away. But rent is not necessarily an incident to