Perry v. Rockland & Rockport Lime Co. , 94 Me. 325 ( 1900 )

Stbout, J.

On April 16th, 1898, the then owners of a lime-rock quarry, leased a portion of it to the plaintiffs for the term of one year from that date. The rights of the parties to this suit depend upon the clause in the lease, which reads: — “ The term of this lease shall be one year from the sixteenth day of April, A. D. 1898, with the privilege to the said Perry Brothers of renewing the same on the same terms for one, two, three, four, five, six or seven years additional. ”

Neither during the term of one year, nor at its termination, did the plaintiffs give any notice to the lessors of an intention to renew, or continue occupancy of the quarry, for either of the periods as to which they had an election. But they did in fact remain in possession thereafter, to which lessors made no objection. Shortly before the expiration of the year’s term, plaintiffs removed to this quarry and set up a boiler in place of one before used. The rent reserved was four cents net stumpage per cask for all good stock quarried, and was payable on the first day of January each year. Rent has been paid to the first day of January, 1900, to the then owners. In May, 1899, the title to three-fourths of the quarry became vested in William T. Cobb, trustee, who by his deeds of June 7th and June 26th, 1899, conveyed it by quitclaim to the Penobscot Bay Manufacturing Company, which company conveyed it by warranty deed to the defendant on January 18th 1900. And on the fifth day of March, 1900, the remaining one-fourth was conveyed to the defendant.

The deeds to Cobb contained the provision: “This conveyance is subject to a lease of a portion of said quarry and real estate from this grantor to Perry Brothers, dated April 16th, 1898, and all right, title and interest in and to said lease, together with the rentals therefrom accruing after June 1, 1899, are hereby assigned and transferred to the said Cobb, as trustee.” A similar provision is contained in the deeds from Cobb to the Penobscot Bay Manufacturing' Company. In the deed from that company to the defendant is the clause: — “And also subject to any existing rights under a writing or lease to Perry Brothers, dated April 16, 1898, and all right, title and interest of the said Penobscot Bay Manufacturing Company in, to, or under and by virtue of said writing or lease, together with the rentals hereafter accruing therefrom, are hereby assigned, set over, transferred and conveyed to the grantee.” No similar provision was contained in the deed of one-fourth from Frohock and others.

The defendants therefore must be regarded as taking title with notice of whatever rights, if any, plaintiffs then had, but their rights were not thereby enlarged.

Under the lease, plaintiffs had the right to renew or extend the lease for one, two, three, four five, six or seven years at their option. They had one right of election and only one, to be exercised by the will of the plaintiffs communicated to the lessors or the then owners of the reversion. Cunningham v. Pattee, 99 Mass. 252. Good faith, fair dealing, as well as the law, required that the election should be made during the original term of the lease, or at its expiration. Renaud v. Daskam, 34 Conn. 512; Thiehaud v. First Nat. Bank, 42 Ind. 222; Darling v. Hoban, 53 Mich. 599; Shamp v. White, 106 Cal. 221.

Notwithstanding the fact that, shortly before the expiration of the specific term of the lease, plaintiffs placed in the quarry another boiler, the evidence satisfies us that neither at that time, nor at the expiration of the year, had the plaintiffs arrived at the conclu' sion to have their term extended for any definite time.) The matter appears not then to have passed beyond the experimental stage. Benjamin C. Perry, one of the plaintiffs, says that, at about the time he set up the horizontal boiler, which he places at the 13th or 14th of April, 1899, McNamara, one of the original lessors and then part owner of the quarry, said to him “it looks as though you had come to stay,” and that he does not remember what reply he made. McNamara says that he asked Perry what he was doing, and he answered: “I guess I have come to stay with you. I am going to set up this larger boiler.” This answer is hot such as would be expected, if at that time Perry had decided to take an extension of the lease for one or more years. It is more consonant with the idea of awaiting results before making an election. /

Nine months after the expiration of the year’s term in the lease, plaintiffs notified defendant in writing that they had elected to continue the lease, but not specifying for what term. Enclosed with this notice was di’aft of a lease for seven years, which plaintiffs asked to have executed. Defendant declined to execute the proposed lease, and distinctly claimed that plaintiffs’ option terminated at the end of the first year; and that plaintiffs having failed to exercise their option, their right had expired, and claimed possession of the mine on April 16th, 1900. This notice of the exercise of plaintiffs’ option was too late. The term of the lease had expired. Plaintiffs had failed to exercise seasonably their option, and the right to do so had terminated, yet.plaintiffs remained in possession and were not ejected by the then owners, as they might have been, and rent was paid to the then owners and accepted by them until January 1st, 1900. No rent has been paid to or accepted by defendant.

It is strenuously argued that by thus holding over by consent of the reversioner, the plaintiffs had exercised their election and perfected their right to an extended term for the extreme period of seven years. The cases cited do not sustain such broad claim. In Kramer v. Cook, 7 Gray 550, the lease gave an election to lessee to extend for a further definite term at an increased rental. The tenant held over and paid two quarters rent at the increased rate. This was rightly held to justify the inference of election. In Hersey v. Giblett, 18 Beavan, 174, Hughes agreed to let and Hersey to take a house “as a yearly tenant,” and “should Hersey wish for a lease of the premises, Hughes will grant the same for seven, fourteen or twenty-one years.” Hersey occupied for seven years, and then called for a lease, and filed a bill for specific performance. It was held that the contract created a tenancy from year to year, with an option to the lessee to ask for a lease from the beginnihg for twenty-one years, determinable at his option for seven or fourteen.

In some jurisdictions it is held that, where the lease authorized a renewal or extension for a definite term, holding • over by consent amounts to an' election to hold for the extended term. So held in Terstegge v. First German Ben. Society, 92 Ind. 82; Delashman v. Berry, 20 Mich. 292; Insurance & Law Building Co. v. Missouri Bank, 71 Mo. 58; McBrier v. Marshall, 126 Pa. St. 390. But the Indiana court held in Whetstone v. Davis, 34 Ind. 510, and Folley v. Giles, 29 Ind. 114, that where the lease provided for a term of one year, with the privilege of the premises for two or three years, holding over after the first year operated only as an election to hold for one year. In Buckland v. Papillon, 2 Law Reports, Chancery Appeals, 67, there was an agreement to let certain premises for three years, and also when called upon by the tenant to grant him a lease for three years, seven years or the whole term. Under that agreement it was held that the option was not gone at the end of the three years. It could hardly have been held otherwise. Numerous cases are cited by counsel, to which we do not specifically refer, as they afford no additional aid in the solution of the question involved here.

The insuperable difficulty in this case is, that the option to extend the lease was not for a definite period, but for any number of years not exceeding seven which plaintiff should desire. If the holding over was evidence of an election, for how long a term was it ? Suppose within the second year the tenant had vacated, could the landlord recover rent for the seven years? Or would the tenant be allowed to say he elected to hold for one year only ?

Some courts make a distinction between a right to renew a lease, and the privilege of extension — treating the former as a covenant, requiring a new lease, and the latter, if the option is exercised, as a holding under the original demise. In this state, such distinction is not regarded; in either case, the additional term is treated as arising from the original demise. Willoughby v. Atkinson Co., 93 Maine, 186.

At common law under a lease for a year or a term of years, holding over by the tenant, by consent of landlord, created a tenancy from year to year, and mere holding over without consent, a tenancy at sufferance. But under our statutes, holding over after expiration of the term creates a tenancy at will. Franklin Land Co. v. Card, 84 Maine, 532.

Kendall v. Moore, 30 Maine, 330, was a case where under a lease for a year, the tenant held over about six months and paid one quarter’s rent. The landlord claimed rent for the entire year, but the court held that the lessee was tenant at will, and not liable for rent beyond the time of his occupancy.

The plaintiffs in this case failed to make seasonably an election to have the lease extended, and the term therefore ended on April 16th, 1899. Thereafterward they held the premises as tenant at will to the then owners. The conveyances of title to the defendant in January and March, 1900, terminated their tenancy and all right of possession. Seavey v. Cloudman, 90 Maine, 536.

Defendant has never recognized the plaintiffs as its tenant. Their holding therefore is without right.

Bill dismissed with costs.