Peppe v. Knoepp , 103 Ohio App. 223 ( 1956 )

This is an appeal on questions of law from a judgment rendered by the Municipal Court for the defendant in a forcible detainer action brought by plaintiffs against him.

Plaintiffs allege in their petition that ever since January 15, 1955, the defendant, Harold G. Knoepp, has forcibly detained from plaintiffs certain real estate situated in the city of Columbus, more particularly described in the petition.

Plaintiffs allege further that defendant entered upon the premises as a tenant of plaintiffs under a lease providing for a forfeiture of the premises in event of nonpayment of a monthly rental, in addition to the basic rental, and that the additional rental has not been paid since January 15, 1955.

Plaintiffs allege further that on June 17, 1955, they duly served defendant a notice in writing to leave the premises within three days after service of same. Plaintiffs pray for restitution and costs.

Pursuant to Rule 18 of the Municipal Court of the city of Columbus, no further pleading is required in forcible detainer actions. Under this rule, the cause of action set up in plaintiffs' petition is considered denied as an entirety. In other words, the general issue in this case is non detinet, which denies plaintiff's right of possession in the property and its wrongful detention, and which excludes further legal defenses raised by special plea.

Plaintiffs assign as error that the judgment of the trial court is prejudicially erroneous and contrary to law, and that the court also erred in overruling plaintiffs' motion for a new trial.

The material facts are not in dispute and are brought into the record by stipulation of the parties and, briefly stated, are as follows:

The premises alleged to be unlawfully detained by defendant consist of three lots in S. Bartlett's Addition to Columbus, which, on March 30, 1938, were leased by one Florence R. Hildreth, plaintiffs' predecessor in title, by written lease for a period of 20 years to P. H. Butler Company, a Pennsylvania corporation, the lease being identified as plaintiffs' exhibit No. 1.

Plaintiffs are the successors in title to the lessor and assignees of the lease; defendant is in possession of the premises as a sublessee of Thorofare Markets, Inc., the successor, by change of name, of the original lessee, P. H. Butler Company, pursuant to written documents, introduced in evidence as defendant's exhibits A and B; and plaintiffs and defendant are each entitled to the benefits and are bound by the terms of the original lease.

It was further stipulated that the basic rental under the terms of the lease is $500 per month; that the lessee shall submit to lessor on or before the 15th day of each calendar month a statement of the gross sales for the preceding month, and, when gross sales shall exceed $40,000 for any month, then an additional rental of 1-1/4 per cent shall be paid on the excess over $40,000 on or before the 15th day of the succeeding month; that defendant paid the monthly rental to Thorofare Markets, Inc., and the company, on behalf of defendant, forwarded the payments from time to time to plaintiffs.

The gross sales for December 1954, and for March 1955, in each month exceeded $40,000, to the extent, respectively, of $50.39 and $76.79, as additional rent; such sums were forwarded to Thorofare Markets, Inc., who neglected to add those amounts to the basic monthly rental or submit monthly statements when making remittance of the basic rents for those two months; and the unpaid rentals were tendered to plaintiffs after they had served notice on defendant to leave the premises.

The cause was submitted to the trial court on the petition of plaintiffs, the opening statements of counsel and stipulations, exhibits, briefs and motions for judgment made by the parties respectively. Upon consideration, the court found for the defendant and entered judgment. The court also made separate findings of fact, based on stipulations of counsel, somewhat abridged, and, also, separate conclusions of law, as follows: "equity will grant relief against forfeiture for nonpayment of rent."

Plaintiffs base their claim for right of possession and unlawful detention on the breach of certain covenants of the lease, which are binding on the defendant under the terms of the sublease, having reference particularly to the breach of the following provisions of the lease:

"* * * Lessee expressly waives the service of any notice of intention to terminate this lease or to retake said premises and waives service of any demand for payment of rent or any other payment or for possession, or of any and every other notice or demand prescribed by any law of the state of Ohio, and agrees that the simple breach of any of the covenants herein shall of itself constitute a wrongful detainer of said premises by lessee within the meaning of the statutes of the state of Ohio governing forcible entry and detainer."

"Forfeiture upon Breach by Lessee. That if the rent hereinbefore provided to be paid, or any part thereof, shall at any time be in arrears and unpaid, and without any demand being made therefor, if lessee shall fail to keep and perform any of the covenants, agreements, provisions, terms or conditions of this lease on the part of lessee to be kept and performed * * * then, and in any such event, it shall be lawful for lessor to enter into said premises, and again have, repossess and enjoy the same as if this lease had not been made, and thereupon this lease and everything herein contained upon the part of lessor to be done and performed shall cease, determine and be utterly void; without prejudice, however, to the right of lessor to recover from lessee all rents due up to the time of such entry."

"Payments, et cetera, After Termination. That no payment of money by lessee to lessor after the termination of this lease in any manner, or after the giving of any notice by the lessor to the lessee, shall reinstate, continue or extend the terms of this lease or affect any notice given to lessee prior to the payment of such money * * *."

The stipulated facts disclose that plaintiffs did not receive payment of the additional rentals for the months of December 1954 and March 1955, or did they receive statements of the gross sales for those months, and that defendant made default in not observing the provisions of the lease.

Moreover, the lease expressly provides that defendant agrees the simple breach of any of the covenants of the lease of itself constitutes a wrongful detainer of the premises by defendant within the meaning of the statutes of the state of Ohio governing forcible entry and detainer, and that, if the rent or any part of it be in arrears and unpaid or the defendant fail to keep any of the covenants of the lease, it shall be lawful for plaintiffs to enter the premises and repossess them.

The undisputed facts established on the trial sustained the allegations of plaintiffs' petition that defendant has made default, and that, pursuant to the terms and provisions of the lease, plaintiffs were entitled to possession of the leased premises.

As pointed out above, the rules of the trial court did not require the defendant to file an answer in this form of action. However, where the defendant has an affirmative defense, including confession and avoidance, it appears that, under our procedure, defendant should have pleaded such defense and prayed for the relief sought, in order to invoke the well-established maxim that equity abhors a forfeiture.

Pursuant to subsection (C) of Section 1901.18, Revised Code, the Municipal Court has jurisdiction to grant relief: "in any action at law based on contract, to determine, preserve, and enforce all rights, legal and equitable, involved therein. * * *"

In the exercise of equitable jurisdiction conferred by statute, the court adjudges such issues as are raised on the pleadings and the evidence. In the instant case, the equitable jurisdiction of the court was not invoked.

The judgment entry, following the submission of the case, was equivalent to a finding that defendant was not guilty, the entry reading in part, "judgment for defendant for costs."

Defendant contends that the law of Ohio is clear that equity will relieve against forfeiture of a lease for nonpayment of rent. We agree with this contention. Defendant cites several cases which we have examined, and it appears that in each of these cases this well-known rule was given recognition where the pleadings and proof have invoked the exercise of equitable jurisdiction.

The principal case relied on is Tabor v. Bellman, 13 Ohio App. 382. That was an injunction proceeding brought in the Common Pleas Court to restrain the issuance and service of a writ of restitution in a forcible detainer case on a judgment rendered in the Municipal Court. It was held that a court of equity will relieve against forfeiture of a lease for nonpayment of rent when equity will be subserved thereby.

The defendant has also cited Nagy v. Wargo, 7 Ohio Law Abs., 457, and Dibaw v. Cohn Carney (Court of Appeals for Mahoning County, unreported). In each of these cases the lower court had granted restitution. The Court of Appeals had for review the record of proceedings in original actions brought in the Court of Common Pleas to restrain the issuance of writs of restitution and to set aside the judgments of forfeiture of leases. See, also, Gould v. Hyatt, 4 Ohio Law Abs., 468. That action was brought in the Common Pleas Court to enjoin the lessor from declaring a forfeiture of a certain lease. It was held that where equities of the parties can be otherwise adjudicated a lease will not be forfeited for nonpayment of rent.

In Rea v. Helsley, 86 Ohio App. 114, 90 N.E.2d 168, cited by defendant, it appears that equitable issues were raised on the pleadings in the Municipal Court and that that court found that the tenant was entitled to equitable relief against a forfeiture. On appeal, the judgment was affirmed.

The case of Adair v. Crepps, 81 Ohio App. 136,76 N.E.2d 287, relied on by plaintiffs, was an action in forcible entry and detainer brought in the Municipal Court. The defendants were in possession of real property under a lease containing a privilege of purchase clause. It appeared that defendants were in default for nonpayment of rent. The court held that the privilege of purchase clause created an equitable interest in defendants, which deprived the court of jurisdiction. On appeal to the Court of Appeals, judgment was reversed on the ground that the bill of particulars stated a good cause of action in forcible entry and detainer, which raised the issue of right of possession.

In the opinion, on page 144, the court said:

"If in truth and in fact defendants have a good defense to this action calling for the exercise of equitable jurisdiction on the part of the court, pleading and proof thereof will defeat this action for possession only."

See Jaeger v. Goldzwig, 42 Ohio Law Abs., 340, 60 N.E.2d 625.

In the instant case, the terms of the lease provide, among other things, that a "simple breach of any of the covenants" of said lease "shall of itself constitute a wrongful detention"; and that no payment of money by defendant after notice of termination of the lease shall reinstate the lease.

The respective rights and duties of the lessor and lessee, which are binding on the parties to this action, are set forth in the lease in clear, comprehensive and unambiguous terms. No claim is made that either of the parties did not have a right to contract, or that any of the covenants in the lease were not binding on the parties, including the provisions relating to default and right of re-entry. 10 Ohio Jurisprudence (2d), 573, Section 503.

It is not the province of the courts in actions at law to reform contracts by judicial intervention, or to relieve a party from his contractual obligations fairly and honestly entered into.

In this case, no defense, equitable or otherwise (excepting a general denial considered as filed under the rules of the trial court), having been pleaded, the trial court erred in entering judgment for the defendant on the ground that equity abhors a forfeiture without first requiring defendant to plead his equitable defense and considering the evidence introduced on the issues thus raised.

The judgment of the Municipal Court should be reversed and the cause remanded thereto for a new trial, with costs to abide final judgment.

CONN, J., of the Sixth Appellate District, sitting by designation in the Second Appellate District.