Opinion
No. 14,004.
Filed September 8, 1930. Rehearing denied November 13, 1930. Transfer denied June 26, 1931.
LANDLORD AND TENANT — Lease Contract — Containing Option to Purchase — Creates Relation of Landlord and Tenant. — A contract which contains all the essentials of a lease, but which also contains a provision amounting to an option to purchase the property by the lessee on compliance with the terms of the contract and that the payments made as rent are to be credited on the purchase price if the option is exercised, constitutes a lease and creates the relation of landlord and tenant between the parties thereto.
From Marion Municipal Court (14,788); Charles S. Wiltsie, Sr., Special Judge.
Action by Wilhelmine Smith against William R. Hunter for possession of leased real estate. From a judgment for plaintiff, the defendant appealed. Affirmed. By the court in banc.
Albert M. Bristor and Harry S. Medlock, for appellant.
Charles J. Karabell, Silas Lipman and Rae W. Powell, for appellee.
Action by appellee against appellant for the recovery of rent alleged to be due appellee. Judgment for $136 was rendered against appellant, from which this appeal. The only error presented is error of the court in overruling appellant's demurrer to the complaint.
It is averred in the complaint, in substance, that, on September 10, 1925, appellee, by a written lease, executed by her and made a part of the complaint, leased to Sadie C. and Harold M. Price the real estate therein described for a term of three years from said date, with the option of extending said lease for a further term of three years, which extension was exercised in accordance with terms of said lease. That, on or about September 10, 1928, said lease was assigned by indorsement in writing by said lessees, with the written consent of appellee, to appellant; that appellant took possession of said real estate pursuant to said lease on or about said day, and has been in possession thereof ever since; that appellant failed to pay the stipulated rent due and payable in January, February, March and April, 1929, respectively, amounting to $136, which sum is due and unpaid, wherefore, appellee prays judgment.
The instrument sued on is long and we deem it unnecessary to set it out in this opinion. Appellant says that it is written upon a printed form gotten out by the Indianapolis Real Estate Board and labeled "Lease with option to purchase," and further states that, so far as he is able to find, it has never been construed by this court. But evidently appellant failed to find the case of Bernstein v. Rhodes (1927), ante 553, 157 N.E. 463, where, in a special finding of facts, the same form of lease is set out. It was there held, citing and following 35 C.J. 1038, § 181, that such contract, which contains all the essentials of a lease, and also a provision for the purchase and sale of the land by the lessee upon compliance with its provisions, does not destroy the lease and prevent the existence of the relationship of landlord and tenant, although the payments made as rent are to be credited upon the purchase price if the option is exercised.
On the authority of that case, we hold that, under the contract sued on, the relation of landlord and tenant existed between appellee and appellant, and that appellant was liable to appellee for rent.
Judgment affirmed.