West v. Backus , 97 Or. 116 ( 1920 )

BENSON, J.

Plaintiffs’ numerous assignments of error are founded upon the theory that the lease was not assignable, and that they were entitled to introduce evidence to show that the contract was based upon the special skill and reliability of the lessees, in support of their contention that the sublease was a violation thereof. It is also urged that evidence tending to establish the breach of other conditions of the lease should have been admitted to establish their right of re-entry, and to recover the personal property, and further, that it was error to grant a nonsuit as to the defendants J. E. Backus and Birdie O. Backus. The defendants insist that the lease expressly authorizes assignment thereof, and that the language of the contract makes the transfer of the personal property a sale rather than a bailment, thereby taking from plaintiffs any right in replevin, and limiting them to an action for debt.

1. Plaintiffs urge the contention that the lease in question is to be construed like the one in the case of Meyer v. Livesley, 45 Or. 487 (78 Pac. 670, 106 Am. St. Rep. 667), a case in which a hopyard was leased to be farmed upon shares, and in which it was held that the nature of the agreement disclosed that the lease was a personal contract, not assignable without the consent of the lessor. This case does not aid the plaintiffs, for the reason that in the present case the contract contains the following language:

“That the said parties of the first part, for and in consideration of the rents, covenants and agreements hereinafter mentioned, to be paid, kept and performed by the parties of the second part, do hereby lease and farm-let unto the said parties of the second part, their executors, administrators and assigns, for a term of five years from and after the first day of July, 1916, all the following described real property, situate in Columbia County, Oregon.”

The use of the word “assigns” constitutes an express consent to the assignment or subletting of the contract and property: Logan & Andrews v. Campbell & Alford, 135 Ga. 366 (69 S. E. 548). It follows that the evidence offered upon this point was properly excluded.

2. The trial court excluded the evidence offered by plaintiffs, tending to prove that the conditions of the lease had been violated by the original lessees, and this action is assigned as error. Defendants meét this challenge with the contention that such evidence is irrelevant, because the transfer of possession of the personal property described in the lease constituted a sale and not a bailment. An important clause in the agreement reads thus:

“The parties of the second part agree that upon the termination of this lease, they will surrender to the parties of the first part, the same number, kind and quality of cattle, calves, horses, poultry, farming implements, etc., as those received from the lessors, as above described, or in lieu thereof, property of equal value, agreeable to and to the satisfaction of the parties of the first part.”

It is upon this clause that defendants rely to support their argument that there was an absolute sale of the personal property, rather than a bailment, and if that were the only portion of the lease which is involved in the solution of the problem, there could be no hesitancy in sustaining their contention, for the great weight of authority supports the doctrine that such a clause indicates a sale. Upon this point we quote from 6 C. J. 1086, as follows:

“The fundamental distinction between a sale and a bailment lies in whether an obligation exists to restore the thing delivered in the same, or in an altered form, and in whether the title passes. The transaction is a bailment if the identical thing is to be returned. If the receiver is not bound to return the identical things, but is at liberty to return something else, as a rule the property passes, and the transaction is in effect a sale or an exchange.”

The doctrine thus declared is supported by the following authorities: Savage v. Salem Mills Co., 48 Or. 1 (85 Pac. 69, 10 Ann. Cas. 1065); Mechem on Sales, § 21; 16 R. C. L. 710; Marsh v. Richards, 3 Hun, 550; Bretz et al. v. Diehl et al., 117 Pa. St. 589 (11 Atl. 893, 2 Am. St. Rep. 706); Chase v. Washburn, 1 Ohio St. 244 (59 Am. Dec. 623); Vandeymark v. Corbett, 131 App. Div. 391 (115 N. Y. Supp. 911); Norton v. Woodruff, 2 Comst. (N. Y.), 153; Lyon v. Lenon et al., 106 Ind. 567 (7 N. E. 311); Austin v. Seligman (O. C.), 18 Fed. 519. There is, however, another element in the construction of such contracts which may not be ignored, and which is as well fortified by authority as the rule above stated. It is formulated in 2 Tiffany on Landlord and Tenant, 1670, thus:

“The question involved in such cases seems to be, primarily, whether the transaction was, as regards the personal property, intended to be a bailment or a sale, and the fact that it was part of a transaction looking to the leasing of land might perhaps be regarded as tending to show that it was a bailment.”

In 6 C. J. 1088, it is said that:

“The substance of the agreement, and not its form or the particular expressions employed in it, is controlling, and the intention of the parties must be ascertained from the terms of their contract.”

There are certain additional provisions of the lease which may aid us in discovering the, intention of the parties. Among others, we find this language:

“It is further agreed, that if any stock herein mentioned shall die or get killed or damaged through the negligence or carelessness of the parties of the second part, or their agents, the parties of the second part will be responsible therefor and will replace any such, stock with the same kind or reimburse t]ie parties of the first part to their full value; but if any stock should die or become damaged as a result of contagious disease of any kind, all such loss is to be borne by the parties of the first part.

“In case there should be a misunderstanding "between the parties hereto, as to the cause of death or injury to any of the stock, as above mentioned, the same is to be decided conclusively between the parties by the diagnosis of a competent official from the office of the state veterinary.”

And still further we find this paragraph:

“It is hereby agreed that for the care of the registered heifers the parties of the second part shall receive two thirds of the offspring of said heifers. It is also agreed that none but registered Jersey sires be used during this lease.”

These quotations are utterly inconsistent with the theory that the parties intended a sale, and we conclude that the personal property mentioned in the lease was clearly intended to remain the property of the lessor, subject to such replacements as might become necessary in handling the property according to the course of good husbandry.

3. The following provisions are found in the lease:

“In consideration whereof, the said parties of the second part hereby covenant and agree to and with the parties of the second part that they will occupy and conduct the premises above mentioned, during their term aforesaid, in a farmerlike manner, and that they will commit no waste or damage or cause or suffer any to be made, and that they will permit no timber to be removed from said premises, other than is necessary to be removed in maintaining the farm properly and for fuel on the place.”

There is also the following agreement as to forfeiture and re-entry:

‘‘It is mutually agreed that time is the essence of this agreement, and that should default he made in any of'the covenants or agreements herein contained on the part of the parties of the second part, or should default be made in the payment of each, either, or all of the monthly payments, as above specified, as and when the same shall become due and payable; it shall be lawful for the parties of the first part, or their duly authorized agents, to re-enter the premises described, retake possession thereof, including the personal property described and remove all persons from said premises and to terminate this lease.”

If then, as a matter of fact, any of the foregoing covenants were violated by the tenants, the power is therein granted to the lessor to terminate the lease and retake possession of both the real and personal property, and this power is equally effective as against the subtenant: 16 R. C. L. 1140; 2 Tiffany, Landlord & Tenant, § 194 h. It was error, therefore, to exclude evidence of breaches of covenants.

4. It was also error to render a judgment of non-suit in favor of the defendant, J. E. Backus, since, according to the answer of the defendants, he remained in the possession of the personal property as the agent of the defendant Nellie K. Smith, and it is further alleged, that in proceedings upon claim and delivery, the sheriff did “seize and take from the possession of the defendants J. E. Backus and Nellie K. Smith, all said personal property, goods and chattels, and still retains the same to the damage of the defendants J. E. Backus and Nellie 3L Smith, in the sum of two thousand dollars.” This is an allegation of joint possession in the two defendants named.

5. It is also to be noted, that when the original tenants entered into possession of the premises, they acquired' possession of certain personal property which was not specified in the lease, and which, therefore, the plaintiffs were entitled to reclaim at any time, and there is no evidence in the record that such possession has ever been transferred.

The judgment of the lower court is reversed, and the cause remanded for a new trial.

REVERSED AND REMANDED.

Johns, Harris and Burnett, JJ., concur.