Opinion
September 23, 1952.
Appeal from the Circuit Court, Dade County, Charles A. Carroll, J.
Joe Creel, Taylor, Burr Creel, Miami, for appellant.
George A. Brautigam, Miami, for appellee.
The appellant leased to the appellee, Paul Danopulos, certain property used as a site for a restaurant. The lessee owned the furnishings and equipment.
Before the term expired the lessee induced the Snows and Bossis to become lessees in his stead, and the lessor co-operated by canceling the first lease and giving them a new one to secure the performance of which they deposited $1,000. Danopulos sold them the furnishings and equipment by conditional bill of sale and at the time of suit the full amount of purchase price had not been paid.
Two features of a "Subordination Agreement" Beck and Danopulos entered, contemporaneously with the new lease, now become outstanding: 1) the latter was released from all responsibility under the first lease, and 2) his interest in the equipment was subordinated to the lien of the former for rent.
Eventually the new lessees advised Beck they could no longer carry on, so they sent him the keys and surrendered the property.
He replied that as he was privileged to do under the terms of the lease he chose to re-enter as their agent and to declare all rent due for the unexpired term, instead of canceling the lease. After the period for the payment of one month's rent passed, he filed suit seeking a decree declaring all rent due and foreclosing his lien on the equipment for the accelerated amount. Decrees pro confesso were entered against the Snows and Bossis; Danopulos contested with complete success. He contended that Beck should credit the deposit on the rent; that inasmuch as the lease had been canceled the agreement to subordinate his claim had become ineffectual and that his lien for the balance due on the furnishings should therefore be declared to have lost its inferiority.
The total unpaid rent was found to be $12,250.
The master thought nothing had occurred to render the subordination agreement void and that the landlord was entitled to the accelerated rental. It was his view that although the deposit had been made to secure the performance of covenants other than the one to pay rent, it would be inequitable not to credit it on this account because any repairs thereafter would be made by Beck. He recommended that certain items such as taxes, damages to shrubbery, etc., already paid be deducted first and the residue be credited on the rent. He recommended also that the equipment be sold to pay the difference between this credit and the total of the accelerated rent and attorney's fees, any surplus of proceeds of sale to be paid over to Danopulos.
When the matter reached the chancellor he had a different idea. He accepted the facts as reported, but disagreed with the master about the law to be applied to them. He considered the defaulted rental for one month as the only item involved that was truly "rent." The rest of the twelve thousand odd dollars was, in his opinion, really damages. This led to the view that the title retained by Danopulos was inferior only to $250, and not to twelve thousand odd, and further to the view that even the small amount could not take precedence because the balance of the deposit lessor held was much more than that.
Upshot of this decree was, of course, that Danopulos' victory was outright and the question here is whether the lessor had a "claim or lien" for a larger figure, to which Danopulos agreed to make his "right, lien, * * * title retaining contract or other claim * * * secondary and inferior * * *." These quotations are taken from the agreement.
It seems to us the chancellor's conclusion, as we construe it, was not correct. Despite the ramifications of the transactions among the lessor, the original lessee and the later lessees, the fundamental purpose of the subordination agreement and the contents of this instrument are all quite clear. Danopulos was responsible under a lease, and he wished to rid himself of liability. By the deal with the new lessees he was not only enabled to dispose of the personal property he had needed in the operation of the restaurant, but was also relieved of accountability to the lessor beyond his interest in the equipment.
Danopulos could not have shifted his position from lessee to a mere holder of title to the equipment without the cooperation and forbearance of his lessor. Doubtless the inducement to the lessor, in large part at least, was the willingness of Danopulos to make his claim, title, right and interest in the chattels inferior to the lien of the lessor "for rent on the said real estate."
Taking into consideration at once the second lease, the subordination agreement and the design both of lessor and Danopulos, we conclude that the provisions of the lease were fastened on the retain title contract and on the interest of the lessees as well. The latter is true because of the provision in the lease that the lessees pledged "all the furniture, fixtures, goods and chattels * * *, which are now, shall or may be brought or put on said premises as security for the payment of the rent * * *." So it is obvious that all rights of Danopulos and the new lessees to the equipment regardless of their relation to each other were covered by agreement and lease.
It was expressly provided in the lease that if the charge for rent should at any time remain due and unpaid for five days the lessor could re-enter and the entire rent should at once become due and payable to be forthwith collected by distress or otherwise. Here in plain language is the authorization for the acceleration of the periodic rental payments, and the lessor exercised the privilege by bringing this suit.
In the lease it was further stipulated that if the lessees should "abandon or vacate said premises before the end of the term * * * the lessor [might], at his option, forthwith cancel this lease or * * * enter said premises as the agent of the lessee * * *." The lessees did abandon the property and the lessor did select the latter course.
At this point we recapitulate by stating that the combined interests in the equipment became liable under the lien; that the lessor did not cancel the lease, but on the contrary, elected to re-enter as lessees' agent; that all parties defendant subscribed to acceleration of rental payments.
The lease contained the provision that upon entry, the lessor as agent for the lessees could relet the premises at such price as the lessor might determine, receive the rent therefor, and apply the same to the payment of the rent. If the full rental should not be realized by lessor over and above the expenses to lessor in such reletting, the lessees were to pay any deficiency; if more than the full rental was realized the lessor was bound to pay over to said lessees any excess.
We are fully conscious of the apparent anomaly from provisions to accelerate the rent, on the one hand, and to strike a balance at the end of the term, on the other, but we are trying only to construe a complex arrangement that may have been improvident for Danopulos because it contemplated the sale of his property under foreclosure to satisfy an amount that might be reduced or dissipated by returns from future tenants. The unwisdom of the contracts these parties made and the inconsistencies that resulted, have caused us much trouble, but we must deal with the situation as we find it. Our purpose is only to construe, not to correct.
All we have decided is that the rent may be accelerated by the very terms of the lease; that the interests of lessees and Danopulos have become responsible for the amount, hence, may be sold now.
We have not had the advantage of a brief from appellee.
It seems fair to suggest that at the end of the term there will have to be an accounting to determine the credits and debits among these parties, because it is only then that it may be known what has been received from a reletting. We mention this because the chancellor may wish to retain jurisdiction until the whole controversy can be settled with definiteness.
Reversed.
SEBRING, C.J., and TERRELL and HOBSON, JJ., concur.