Opinion
6 Div. 507.
January 11, 1940. Rehearing Denied March 7, 1940.
Appeal from Circuit Court, Jefferson County; J. F. Thompson, Judge.
Bradley, Baldwin, All White, Wm. Alfred Rose, and B. A. Monaghan, all of Birmingham, for appellant.
A lease of real property does not confer on the lessee any greater interest in the property than the lessor had therein, and where lessor's title is subject to a previously executed and recorded mortgage the foreclosure of such mortgage terminates the leasehold estate of the lessee. Mansony v. United States Bank, 4 Ala. 735; Coffey v. Hunt, 75 Ala. 236; American F. L. Mtg. Co. v. Turner, 95 Ala. 272, 11 So. 211; Phillips v. Birmingham Ind. Co., 171 Ala. 445, 54 So. 603; Mack v. Beeland Bros. Co., 21 Ala. App. 97, 105 So. 722; Reichert v. Bankson, 199 Ill. App. 95; Dolese v. Bellows-Claude Neon Co., 261 Mich. 57, 245 N.W. 569; Code 1923, § 10143. The parties have not by their conduct since the initiation of the foreclosure proceedings raised a landlord-tenant relationship between them. Comer v. Sheehan, 74 Ala. 452; Drakford v. Turk, 75 Ala. 339; Pugh v. Davis, 103 Ala. 316, 18 So. 8, 49 Am.St.Rep. 30; Archer v. Sibley, 201 Ala. 495, 78 So. 849; Bank of Moundville v. Walsh, 216 Ala. 116, 112 So. 438; Prudential Ins. Co. v. Zeidler, 233 Ala. 328, 171 So. 634. Even if the parties by this conduct be considered to have established a landlord-tenant relationship between them, appellant cannot under the circumstances be held to have bound itself for the entire unexpired portion of the term demised to it by the mortgagor. Harkins v. Pope, 10 Ala. 493; Ames v. Schuesler, 14 Ala. 600; Prudential Ins. Co. v. Zeidler, supra.
W. H. Woolverton, of Birmingham, for appellee.
A party to an instrument is any person who signs it and who is bound by the terms thereof. An approval of a written contract by any party interested in the subject matter of the contract binds the party giving such approval to all terms of the contract except as modified by the terms of such approval. Where a party has with knowledge of the facts assumed a particular position in regard to a contract, he is estopped to assume another position inconsistent therewith to the prejudice of the adverse party. Watt v. Lee, 238 Ala. 451, 191 So. 628; Wilson v. Alston, 122 Ala. 630, 25 So. 225; Huntsville Elks Club v. Garrity-Hahn Bldg. Co., 176 Ala. 128, 57 So. 750; Irvin v. Irvin, 207 Ala. 493, 93 So. 517; Richards v. Shepherd, 159 Ala. 663, 49 So. 251.
This case was tried upon an agreed statement of facts.
Counsel for the appellant have presented an able and persuasive argument to the effect that the appellee, holding under a valid mortgage anterior to the lease, did not by virtue of the foreclosure of the mortgage and the purchase of the property at the sale, in and of these facts alone, create the relationship of landlord and tenant between the appellee and the appellant. This contention we may concede, as a decision of same is not necessary to dispose of this case, though see Walsh v. Bank of Moundville, 222 Ala. 164, 132 So. 52.
The lease contains this provision: "This agreement shall be binding upon and shall enure to the benefit of the parties hereto, and their respective successors or assigns." This was not only binding upon the parties but upon their respective successors or assigns.
It may be that this provision, without more, was not binding upon the mortgagee, Miss Ruter, whose mortgage was anterior to the lease, but there was more, as the following clause appears in the lease and before the signature of the parties thereto.
"I, as mortgagee, give my approval to this lease, without waiving any rights held under first mortgage, but subject to such mortgage.
Angeline G. Ruter (Seal)"
This was an approval of the lease by the then mortgagee and, in effect, a consent that she and her successor or assigns should become parties thereto and to continue throughout, subject to the rights of the mortgagee or her assigns to the protection thereunder as against any default of the terms of the mortgage, except perhaps for the right to an acceleration of the payments and a foreclosure in case of a breach as to the erection of a building, or tearing down, in whole or in part, a building on the land, which was the very essence of the lease.
When the mortgagee or assigns or successor foreclosed the mortgage as for a default in the payment of the mortgage debt and purchased the property at the sale, this appellee became the successor of the mortgagee, under the terms of the lease, and a party to same and the landlord of the appellant, The Texas Company.
The judgment of the circuit court is affirmed.
Affirmed.
GARDNER, BOULDIN, and FOSTER, JJ., concur.