Opinion
Decided February 24, 1930.
Landlord and tenant — Assignment of lease, and acceptance of rent from assignee — Original lessee and assignee liable for unpaid rent, when — Guarantor's testimony of their intention or understanding inadmissible, when.
1. Lessee remains liable on his express agreement to pay rent, although he has assigned lease and lessor has accepted rent from assignee.
2. An express agreement to pay rent under a lease is obligatory on all parties until discharged or modified by act of contracting parties.
3. Obligation assumed by guarantee as follows: "For Value Received, we, the undersigned, hereby guarantee the payment of rent for not exceeding six months," continued as long as original lessees were liable for rent under lease, or until discharge by payment or mutual consent.
4. Where guarantors signed provision in lease as follows: "For Value Received, we, the undersigned, hereby guarantee the payment of rent for not exceeding six months of the within term" — and lessees thereafter assigned lease to another, it was error in action by successors of original lessor seeking recovery of rent from original lessees and their guarantors to allow guarantors to testify as to what they intended or understood; language of guaranty being clear and explicit.
ERROR: Court of Appeals for Cuyahoga county.
Mr. Jerome M. Friedlander, for plaintiffs in error.
Mr. Arthur E. Brueckner, for defendants in error.
The parties occupy the same relative positions held in the municipal court. The statement of claim, in so far as defendants, J.F. Eberhardt and William A. Nunn are concerned, seeks to recover a judgment against them on the basis of a written guaranty, guaranteeing the payment of rent under a written lease for a period of six months. The guaranty reads as follows: "For Value Received, we, the undersigned, hereby guarantee the payment of rent for not exceeding six months of the within term, intending hereby to restrict our liability to a sum not greater in case of default, than the equivalent of six months rent."
The original lease, for a period of five years, was entered into between the Cretney Company, owner, and Alford Blanchard and Mahlan J. Eberhardt, as lessees, covering premises known as 14453 Euclid avenue. The above guaranty appears on the lease after the signature of the parties to the lease.
One of the provisions of the lease deals with the right to assign the same as follows: "It is understood and agreed that the within lease may be assigned to Blanch-Hart Motor Company now being organized."
After this lease was executed, there was organized the Blanch-Hart Motor Company, a partnership, consisting of Alford Blanchard and Mahlan J. Eberhardt. The partnership did not succeed, and thereupon there was formed a corporation known as the Eberhardt Motor Company, which corporation continued to occupy the premises and paid rent in the sum provided for in the lease.
The owners of the property, in November, 1923, conveyed the premises to Kathryn Spitz and Mildred N. Spitz, and also assigned to the new owners the above lease. Max E. Spitz acted as agent for the new owners, and payments of rent were made by the Eberhardt Motor Company to Max E. Spitz.
The suit in question was instituted against the original lessees, to wit, Alford Blanchard and Mahlan J. Eberhardt, as there had been a default in the payment of rent. In the same action suit was instituted against John F. Eberhardt and William A. Nunn, guarantors. The municipal court awarded judgment for rent as against the original lessees, Alford Blanchard and Mahlan J. Eberhardt, but rendered judgment in favor of William A. Nunn and John F. Eberhardt, guarantors. The theory of the trial court was that, since the new owners through their agent accepted rent from the Eberhardt Motor Company, not a party to the lease, the guarantors were no longer to be held under their guaranty.
One of the early cases decided by our Supreme Court bearing upon the point in controversy is the case of Sutliff v. Atwood, 15 Ohio St. 186, 194, which is followed in Lodge v. White, 30 Ohio St. 569, 574, 27 Am. Rep., 492. In Lodge v. White, syllabus 1 is as follows: "A lessee remains liable on his express agreement to pay rent, notwithstanding he may have assigned his lease with the lessor's assent, and the lessor has accepted rent from the assignee."
The latest pronouncement is in Blosser v. Enderlin, 113 Ohio St. 121, 134, 148 N.E. 393, wherein the court reiterated the law to the effect that a lessee is liable for an express agreement to pay rent even though the lessee assigns his lease.
We can take it as well established that an express agreement to pay rent under a lease is binding upon the parties until there has been a discharge or modification by the act of the contracting parties. The guarantors in this case, it may be taken as conceded, were not in the slightest prejudiced by the change in the personnel of the occupants of the premises. The obligation expressed in the guaranty is quite definite and free from doubt. Just as long as the original lessees are liable for rent under the lease, the obligation expressed in the guaranty coexists and continues until it is discharged either by payment or the mutual agreement of the parties.
As a general rule, the liability of the guarantor of the tenant is measured by that of the principal, and will be so construed. 36 Corpus Juris, 206.
Thompson on Real Property, vol. 2, page 508, Section 1386, states the rule in more explicit language, as follows: "A surety for a lessee is not discharged from liability on the express covenants of the lease by an assignment to any greater extent than the lessee himself would be discharged. A contract of guaranty presupposes another and original contract, to which it is collateral; it is an undertaking to answer for the performance of some contract of another. A failure to pay rent would, even after an assignment of a lease, be the default of the lessee, and his sureties would be liable as his guarantors."
The guaranty as signed by these defendants is absolutely clear, and must be construed by the language used, and in no other way. There was no occasion for interpreting any doubtful words or phrases, as the language of the guaranty is quite explicit and needs no aid from the outside by way of interpretation. This last statement of law is pertinent to this case, for the reason that the trial court permitted one of the guarantors to give his intention and also his interpretation of the meaning of the guaranty. The following appears in the record:
"Q. Mr. Nunn, who were you guaranteeing when you signed the guarantee on the lease?
"Mr. Friedlander: Objection.
"The Court: He may answer.
"Mr. Friedlander: Exception.
"A. For Mr. Blanchard and Mr. Eberhardt."
The same question was asked of defendant in error John F. Eberhardt, as shown by the record on page 22:
"Q. Mr. Eberhardt, for whom did you guaranty this lease?
"Mr. Friedlander: Objection.
"The Court: He may answer.
"Mr. Friedlander: Exception.
"A. Mahlan J. Eberhardt, and Mr. Blanchard."
This action of the court was, in our opinion, erroneous. The parties should not be permitted to give their own interpretation of the language of a guaranty, if the language used therein is explicit and free from ambiguity.
We are of the opinion that the judgment of the lower court was erroneous. Accordingly, the judgment of the municipal court is ordered reversed, and final judgment is entered here in favor of plaintiffs in error.
Judgment reversed and judgment for plaintiffs in error.
VICKERY, P.J., and SULLIVAN, J., concur.