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voiding the forfeiture of a lease when the tenant had made substantial valuable improvements to the leased premises, the location of the leased premises was the only one from which the tenant could operate his business, and the loss of that location would end the tenant's business
Summary of this case from King Development v. EslamiOpinion
8 Div. 548.
October 26, 1950.
Appeal from the Circuit Court, Madison County, E. H. Parsons, J.
Claude H. Pipes and James Butler, of Huntsville, for appellant.
The prayer for relief must be accompanied by a prayer for process to issue against each defendant to be bound by the relief sought. Code 1940, Tit. 7, Equity Rule 11 p. 1050. The names of the parties must appear in the bill, and though named in the bill, no one can be regarded as a party defendant, unless process is prayed against him. Martin v. Baines, 217 Ala. 326, 116 So. 341; McGowin v. McGowin, 232 Ala. 601, 160 So. 232; Jackson v. Putman, 180 Ala. 39, 60 So. 61; 30 C.J.S., Equity, § 215 p. 671; 19 Am.Jur. 183 The failure to pray for process against respondent is fatal when attacked by special demurrer. 21 C.J. 40. The mere assertion that there is apprehension of facts which will inflict irreparable injury is not enough. The complaining party must allege and prove facts from which the court can reasonably infer that such would be the result. 43 C.J.S., Injunctions, § 37, p. 471; Robertson v. Montgomery Baseball Ass'n, 141 Ala. 348, 37 So. 388; 22 Words and Phrases, pages 668-676. Amendment will not be permitted to work an entire change of parties. Alabama Terminal and Improvement Co. v. Hall, 152 Ala. 262, 44 So. 592. Although forfeitures are not favored, nothing prevents lessor and lessee from stipulating for termination of lease on non-payment of rents. Cirlot v. Stevens, 222 Ala. 271, 132 So. 163; Hyde v. Bains, 247 Ala. 8, 22 So.2d 324; Myles v. Strainge, 226 Ala. 49, 145 So. 313. A lease which provided "for any violation of this agreement the lessor may immediately terminate this lease and immediately take possession of said premises" may be forfeited for non-payment and breach of other covenants. Johnson v. Blocton-Cahaba Coal Co., 205 Ala. 373, 87 So. 559. The time of payment specified in a contract may be material and by its terms a failure to pay within the time may involve an absolute forfeiture. If it does, this forfeiture will not be relieved against even in a court of equity unless a strict performance is either waived or excused on some general ground of established cognizance. 19 Am.Jur. 105; 51 C.J.S., Landlord Tenant, § 234, p. 863; 12 Am.Jur. 855; Cirlot v. Stevens, supra. Jurisdiction to relieve against forfeitures is founded upon the principle that a party to a legal right shall not be permitted to use it oppressively to the injustice of the defaulting party, but the principle does not extend so far as to authorize a court of equity to set aside the valid stipulations of the parties upon which their rights depend. Where parties make a provision an essential element in their agreement, equity will not intervene to change agreement. Hunter-Benn Company v. Bassett Lumber Co., 224 Ala. 215, 139 So. 348, 349; 19 Am.Jur. 97; West Point Banking Co. v. R. W. Gaunt, 150 Tenn. 74, 262 S.W. 38; Johnson v. Feskens, 146 Or. 657, 31 P.2d 667, 107 A.L.R. 340; 19 Am.Jur., 102. A tender of rent after forfeiture declared is unavailing. 51 C.J.S., Landlord and Tenant, § 110, p. 689. The prior leniency of the landlord with respect to defaults, or his prior failure to enforce a forfeiture therefor, does not preclude him from enforcing a forfeiture for a subsequent similar default, provided he has given notice or warning of his intention to insist on performance of the previously breached condition. 51 C.J.S., Landlord and Tenant, § 117, p. 709; Times Pub. Co. v. Siebrecht, 16 Phila. 235; 16 A.L.R. 44; 19 Am.Jur. 102; First Nat. Bank v. Carter, 231 Ala. 268, 164 So. 388.
C. L. Watts, Joe L. Payne and Walter F. Eigenbrod, all of Huntsville, for appellees.
Where prayer of bill asks that "defendant be made party defendant to this bill", it is not necessary to ask that a subpoena be issued to him. It is the duty of the Register to issue subpoena, on the filing of the bill. McKenzie v. Baldridge, 49 Ala. 564; Reid v. Williams, 250 Ala. 602, 35 So.2d 496; Equity Rule 4a, Code 1940 Tit. 7, p. 1038. The only object of the prayer for process is to designate those persons named in the stating part of the bill who are to be proceeded against for relief. Jackson v. Putman, 180 Ala. 39, 60 So. 61. One may be made a party respondent if appropriate relief be sought against him, although he may not be named in the prayer for process. Julian v. Woolbert, 202 Ala. 530, 81 So. 32. Amendable defects apparent or suggested by allegations of the bill will be treated as cured on defendant's motion to dissolve temporary injunction for want of equity in the bill. Dudley v. Whatley, 244 Ala. 508, 14 So.2d 141, 147 A.L.R. 508; Hunter v. Parkman, 250 Ala. 312, 34 So.2d 221; Gaines v. Stevens, 248 Ala. 572, 28 So.2d 789. Only courts of equity have jurisdiction to relieve against forfeitures. Coley v. W. P. Brown Sons Lbr. Co., 251 Ala. 235, 37 So.2d 125; Barry v. Welch, 248 Ala. 167, 26 So.2d 872. Forfeitures are not favored in equity, and unless penalty is fairly proportionate to damages suffered by breach, relief will be granted against a forfeiture when a court can give by way of compensation all that can reasonably be expected. Dean v. Coosa County Lbr. Co., 232 Ala. 177, 167 So. 566; Barry v. Welch, supra; 16 A.L.R. 437. Equity will relieve against forfeiture for nonpayment of rent on the theory that the covenant for forfeiture for non-payment is a mere security, and will be relieved against on payment of all rent due and damages the lessor has sustained. Abrams v. Watson, 59 Ala. 524; Cesar v. Virgin, 207 Ala. 148, 92 So. 406, 24 A.L.R. 715; City Garage Sales Co. v. Ballenger, 214 Ala. 516, 108 So. 257; Cedrom Coal Co. v. Moss, 230 Ala. 32, 159 So. 225; Farmer v. Pitts, 108 Neb. 9, 187 N.W. 95, 24 A.L.R. 719; 16 A.L.R. 437. Where landlord by course of dealing in accepting overdue rent has put tenant off his guard, forfeiture of lease for delayed payment cannot be enforced unless landlord has given tenant notice and called on him to comply with strict terms of lease. Equity will relieve from forfeiture if tenant has acted in good faith and shall pay promptly rent when demanded, or before landlord suffers loss or inconvenience from delinquency. 51 C.J.S., Landlord and Tenant, § 117, p. 709; 16 A.L.R. 443; 24 A.L.R. 719.
This appeal is from a final decree of the equity court avoiding the forfeiture of a lease of real estate and enjoining the landlord from instituting a suit in unlawful detainer against the tenant for recovery of the premises. The bill was filed by J. D. Humphrey, Jr., individually and as trustee for his three sisters, against Addie Webb Humphrey. The real estate leased by Addie Webb Humphrey to the complainant and his sisters is located in Huntsville, Alabama. The lease was made and entered into on May 1, 1944 for a term of ten years and provided for payment of a monthly rent of $275 on the last day of each month respectively. The lease contains a provision that "for any violation of the terms of this lease the lessor may immediately terminate this lease and immediately take possession of the premises." The case was tried orally before the court.
When the bill was filed the court made an order granting a temporary injunction upon bond being made as provided by the court. There was motion to discharge the injunction "for that the complainant has not included in the original bill a prayer for process to issue against the said respondent, as required by Equity Rule 11, Title 7, Code of 1940." The original bill in this respect reads as follows: "that respondent, Addie Webb Humphrey, be made party defendant to the foregoing bill." The. complainant amended the original bill by amending the prayer thereof so as to read, "that respondent, Addie Webb Humphrey, be made party defendant to the foregoing bill and to that end that all needful process of this court issue to her. * * *." The court thereafter overruled the motion to discharge. In this ruling there was no error. The only object of Equity Rule 11, which appears in Title 7, Code of 1940, p. 1050, is to designate those persons named in the stating part of the bill against whom relief is sought in the bill. It so happens that in the present instance there is only one respondent, viz. Addie Webb Humphrey, named in the prayer of the original bill and she alone is prayed to be made party respondent to the foregoing bill. So there can be no doubt as to whom process is to issue. Since the summons was issued by the register on the bill to Addie Webb Humphrey, she was properly made a respondent thereto. McKenzie v. Baldridge, 49 Ala. 564; Reid v. Williams, 250 Ala. 602, 35 So.2d 496; Jackson v. Putman, 180 Ala. 39, 60 So. 61; Julian v. Woolbert, 202 Ala. 530, 81 So. 32. Furthermore we think that even if the bill be regarded as defective within this rule, the irregularity is such that the court would order the injunction to be discharged unless a sufficient amendment be made within a time fixed by the court. Woodward v. State, 173 Ala. 7, 55 So. 506. In this case such amendment was filed before the hearing on the motion to discharge.
The complainant entered possession of the leased premises under the lease and has held continuous occupancy thereunder since the date of the lease, operating a drug store in the part of the premises known as 119 Washington Street and during such period sublet for doctors' offices the upstairs portion of No. 119 and Nos. 115 and 117 Washington Street.
On the last day of September, 1949, complainant failed to pay to the respondent rent for the month of September 1949. On October 3, 1949 the respondent gave complainant notice that in consequence of default in the payment of such rent in accordance with the terms of the lease, she had elected to terminate the lease and demanded possession of the premises. On that date complainant mailed the respondent a check for the rent due for September. On October 5, 1949 the respondent returned the check to complainant. On October 6, 1949 complainant tendered to the respondent $275 in lawful currency of the United States in payment of the September 1949 rent. The respondent refused the tender. On October 14, 1949 the respondent made a written demand for immediate possession of the leased premises. The demand stated that in consequence of the default of complainant to pay the rent due on the last day of September 1949 the respondent had elected to terminate the lease. On October 21, 1949 the present suit was instituted and the preliminary injunction granted.
Tendencies of the evidence also showed the following. The complainant had spent substantial sums of money in maintaining the interior of the leased premises including both the portion of premises occupied by the drug store and the portion of the premises subleased to the doctors. Complainant has carried continuously during the lease in the leased premises a large and valuable stock of drugs and sundries for sale and has used a large amount of valuable fixtures and equipment in the operation of the drug business. There is no building in Huntsville, Alabama, for rent to which the complainant might remove his drug business and there conduct the same and there is no office space available in Huntsville for complainant's lessee doctors where such doctors could be in close proximity to complainant's drug business and where they now have their prescriptions filled.
Prior to the last day of September 1949 respondent accepted without objection or protest 64 rent checks for the first 64 months of the lease, only 9 of these checks having been mailed or otherwise delivered on the last day of the month. The remainder of these checks were mailed or otherwise delivered from 1 day to 13 days after the last day of the month. On August 10, 1949 respondent went to the complainant at his place of business and stated to him that she appreciated his making her deposits for her of the rent since she had not been well but she was now able to be up and out and to look after her affairs. The evidence is in conflict as to her exact words in this conversation, the complainant offering testimony that all the respondent said was that she was going back to Arizona to spend the winter, that she did not want the complainant to deposit any more money in the bank for her, but that she wanted the check mailed to her on the last day of the month. According to the respondent she stated that she wanted complainant to pay her the rent for the drug store on the day that it was due according to the terms of the lease and to pay it by check. There was proof tending to show that the respondent admitted she wanted a new lease contract with increase in rent. Respondent made no denial that she had made this admission. There was proof tending to show that complainant would be irreparably damaged if he were forced to give up the leased premises or attempt to operate the drug business in some other location.
It is settled that only courts of equity have jurisdiction to relieve against forfeitures. Coley v. W. P. Brown Sons Lumber Co., 251 Ala. 235, 37 So.2d 125; Barry v. Welch, 248 Ala. 167, 26 So.2d 872. Forfeitures are not favored in equity and unless the penalty is fairly proportionate to damages suffered by the breach, relief will be granted when the court can give by way of compensation all that can reasonably be expected. Dean v. Coosa County Lumber Co., 232 Ala. 177, 167 So. 566; Barry v. Welch, supra. The underlying principle is that a court of equity is a court of conscience and nothing will be permitted within its jurisdiction which is unconscionable. So a person, although having a legal right, will not be permitted to avail himself of that right for the purpose of injury or oppression. 16 A.L.R. p. 437.
Equity will relieve against the forfeiture for the nonpayment of rent, since in equity the covenant for the forfeiture on nonpayment of rent is regarded as a mere security and the forfeiture for that reason will be relieved against upon payment of the rent due and such damages as the lessor may have sustained. Abrams v. Watson et al., 59 Ala. 524; Cesar et al. v. Virgin, 207 Ala. 148, 92 So. 406; City Garage Sales Co. v. Ballenger, 214 Ala. 516, 108 So. 257; Cedrom Coal Co. v. Moss et al., 230 Ala. 32, 159 So. 225. It is further true that when a landlord by a course of dealing in accepting overdue rent has put a tenant off his guard, a forfeiture of the lease for a delayed payment of rent cannot be enforced, unless notice has been given to the tenant to comply with the strict terms of the lease. Equity will relieve against the forfeiture and especially is this true if it appears that the tenant has acted in good faith and has promptly paid the rent when demanded or before the landlord suffers loss or inconvenience from delinquency. Farmer v. Pitts, 108 Neb. 9, 187 Neb. 95, 24 A.L.R. 719; 16 A.L.R. 443; 51 C.J.S., Landlord and Tenant, § 117, p. 709.
We think, as found by the trial court in its well considered opinion, that to permit a forfeiture to be declared in this case would be unjust and inequitable and unconscionable and that the court acted correctly in voiding the forfeiture which had been declared by the respondent. It appears that not only the September 1949 rent has been paid into court but all rent subsequently accruing under the lease has been paid into court under order of the court. This rent will, of course, be paid over to the respondent, which we think will do full justice in the case.
Affirmed.
BROWN, FOSTER, LIVINGSTON, LAWSON and SIMPSON, JJ., concur.