39 Michigan, 150. - 1878.
Suit to foreclose a mortgage given by defendant Kingsbury to complainant's testator. Complainant claims certain buildings erected prior to the mortgage as part of the realty; defendant Lyon claims the same buildings as " tenant's fixtures," under certain leases.
The original leases were given to expire ten years from June 1, 1871. Lessees were to have thirty days after the termination in which to remove any buildings they might erect. In February, 1874, defendant Kingsbury deeded the land to G. P. K. This deed was not recorded. In March, 1874, defendant gave the mortgage in question. In January, 1876, G. P. K. gave the tenants a new lease for five years and five months, including also certain lands not covered by the original leases. The tenants became insolvent and made an assignment to Lyon for the benefit of their creditors. Decision for Lyon. Complainants appeal.
COOLEY, J. * * * In brief, the claim on the part of the complainants that when Kingsbury & Bennett, in January, 1876, accepted from G.P. Kingsbury a new lease, they in contemplation of law sur-rendered the existing leases, and not having asserted and exercised a right to remove the erections made previously, they thereby abandoned them to their landlord, and could not assert or transfer to any one else the right to remove them afterwards. This is the principal question in the case.
The right of a tenant to remove the erections made by him in furtherance of the purpose for which the premises were leased is conceded. The principle which permits it is one of public policy, and has its foundation in the interest which society has that every person shall be encouraged to make the most beneficial use of his property the circumstances will admit of. On the other hand, the requirement that the tenant shall remove during his term whatever he proposes to claim a right to remove at all, is based upon a corresponding rule of public policy, for the protection of the landlord, and which is that the tenant shall not be suffered, after he has surrendered the premises, to enter upon the possession of the landlord or of a succeeding tenant, to remove fixtures which he might and ought to have taken away before. A regard for the succeeding interests is the only substantial reason for the rule which requires the tenant to remove his fixtures during the term; indeed, the law does not in strictness require of him that he shall remove them during the term, but only before he surrenders possession, and during the time that he has a right to regard himself as occupying in the character of tenant. Penton v. Robart, 2 East, 88; Weeton v. Woodcock, 7 M. & W., 14.
But why the right should be lost when the tenant, instead of surrendering possession, takes a renewal of his lease, is not very apparent. There is certainly no reason of public policy to sustain such a doctrine; on the contrary, the reasons which saved to the tenant his right to the fixtures in the first place are equally influential to save to him on a renewal what was unquestionably his before. What could possibly be more absurd than a rule of law which should in effect say to the tenant who is about to obtain a renewal: " If you will be at the expense and trouble, and incur the loss, of removing your erections during the term, and of afterwards bringing them back again, they shall be yours; otherwise, you will be deemed to abandon them to your landlord."
There are some authorities which lay down this doctrine. Merritt v. Judd, 14 Cal. 59, is directly in point. That case is decided in reliance upon previous decisions which do not appear to us to warrant it. Fitzherbert v. Shaw, 1 H. Bl. 258, was a case in which ejectment having been brought against the tenant, he entered into an agreement that judgment should be signed at a certain time with stay of execution for a period; and the decision that the tenant could not afterwards remove fixtures was based upon the agreement. Lyde v. Russell, I B. & Ad. 394, only asserts the general rule that where the tenant surrenders possession without removing his fixtures he loses his right. Thresher v. East London, 2 B. & C. 608, was decided upon the construction of a covenant contained in the new lease, by which the tenant undertook to repair the erections and buildings, and at the end of the term the premises so repaired, etc., to leave and yield up, etc. Shepard v. Spaulding, 4 Met. 416, has some apparent analogy to the present case, but it is only apparent. There the tenant surrendeed to his landlord without removing the fixtures in controversy, but undertook to assert the right under a lease made several years afterwards, and which he took when he was as much a stranger to the premises as if he had never occupied them. It is manifest that none of these cases affords any support to the conclusion in Merritt v. Judd. And we have been unable to discover in Landon v. Platt, 34 Conn. 517; Davis v. Moss, 38 Penn. St. 346, or Haflick v. Stober, 11 Ohio (N. S.), 482, to which our attention is called in this case, anything important to this discussion.
The case of Loughran v. Ross, 45 N. Y. 792, is in accord with the case in California. In that case Mr. Justice Allen, speaking for the majority of the court, says: " In reason and principle the acceptance of a lease of the premises, including the buildings, without any reservation of right, or mention of any claim to the buildings and fixtures and occupation under the new letting, are equivalent to a surrender of the possession to the landlord at the expiration of the first term. The tenant is in under a new tenancy, and not under the old; and the rights which existed under the former tenancy, and which were not claimed or exercised, are abandoned as effectually as if the tenant had actually removed from the premises, and after an interval of time, shorter or longer, had taken another lease and returned to the premises." This is perfectly true if the second lease includes the buildings; but unless it does so in terms or by necessary implication, it is begging the whole question to assume that the lease included the buildings as a part of the realty. In our opinion it ought not to be held to include them unless from the lease itself an understanding to that effect is plainly inferable.