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Colonial Cases

Lindsay, trustee of Groom v. Wheelock and Stoddard, 1871

[landlord and tenant]

Lindsay, trustee of Groom v. Wheelock and Stoddard

Supreme Court of China and Japan
1872
Source: The North-China Herald, 14 July 1871

 

LAW REPORTS.

H.B.M.'s SUPREME COURT.

Before C. W. GOODWIN, Acting Chief Judge.

G. A. LINDSAY, Trustee in the estate of F. A. Groom,

versus

T. R. WHEELOCK  and L. H. STODDARD.

   Claim for Tls. 100.

   Counsel for plaintiffs, A. Robinson.

   Counsel for defendants, T. W. M. Bird.

   The claim was made to determine the responsibility of the defendants as tenants of a house which they had taken from F. A. Groom on a lease for five years, which, however, though drawn up was never executed.  The facts are set forth in the speech of plaintiffs' counsel.

   Mr. ROBINSON said the action was brought to recover the sum of Tls. 100.  The amount was rather small, but the object was in reality to try a right, namely the question of the defendants' right -

   Mr. BIRD said he must here apply to the Court to strike off the name of Mr. L. H. Stoddard, who was not a British subject, and not under the jurisdiction of the Court.  Under rule - which he read, the Court had power to amend the petition in such a case.

   Mr. ROBINSON said it appeared to him that the defendants had admitted their joint liability by the terms of their answer to the petition.

   His LORDSHIP observed that the answer was presented from one only - Mr. Wheelock.

   Mr. BIRD said the order for service of the petition was only against Mr. Wheelock.

   Mr. ROBINSON had some doubt as to whether Mr. Stoddard should be relieved, as he scarcely knew what the evidence might bring out yet.  He was taken by surprise by this objection, which might be material or immaterial; if the latter, he might then proceed, but if it was material to the conduct of the case for his client, he should ask the Court to adjourn to have the petition amended.

   His LORDSHIP understood that the action could only go against Mr. Wheelock.

   Mr. ROBINSON admitted the validity of the objection, as Mr. Stoddard was not a British subject, but would ask permission of the Court to amend the petition at any time where it might be affected by Mr. Stoddard's name being withdrawn.

   Mr. Stoddard's name was then struck out.

   Mr. ROBINSON then resumed.  The defence as far as he could gather from the answer, would seem to be that there was no written demise of these premises to satisfy the Statute law of 8th and 9th Vict., and inasmuch as the payment of rent was monthly, the defendants were at liberty to give a month's notice.

   The facts of the case were that, in the year 1868, Mr. Groom was building a house on the Bubbling Well Road, when Messrs. Wheelock and Stoddard thought it would suit them, and agreed to take it.  In consequence of this agreement, various alterations were made upon the plane of the building to suit them.  The house was finished, and, in the beginning of November, Messrs. Wheelock and Stoddard entered upon it, and commenced to pay rent.  About the 1st November Mr. Groom, the landlord, told the defendants that he would sent them a draft lease, and, accordingly, had one drawn up and sent to them for approval.  Mr. Wheelock saw this lease, and had a conversation with Mr. Groom concerning its terms, in consequence of which a few amendments were made.  The lease was then sent to Mr. Stoddard, who kept it for some time, and returned it with some trifling alterations suggested, which were made.  The lease was then engrossed on parchment, but the copy (produced) proved a bad one, and another fair copy was made on paper and sent to the defendants for execution.  That copy he would ask the other side to produce, as it remained in their possession to the present time.  It had never been executed as a valid agreement.

   When the draft was first sent to Mr. Wheelock one of the alterations he wished made was the prolongation of the term.  Whereas the original agreement was for five years, he then requested that a clause be put in, giving the option to the lessees of a renewal of that term for three or five years more, and that was, accordingly, inserted.  Mr. Groom saw Messrs. Wheelock and Stoddard several times, and asked them to return the lease, but, owing to their living at different places, their offices being also at some distance from each other, and one saying "Oh, I will see Wheelock about it," and the other "Oh I will see Stoddard about it" - the people understanding each other perfectly - the lease was never sent in.  Messrs. Wheelock and Stoddard occupied the premises and paid rent monthly in advance for two years, at the expiration of which time the rent fell to be paid to the Trustee of Mr. Groom's estate.  If anything were wanting to show the understanding which the tenants had, he could prove that Mr. Stoddard bought a piece of land at the back of this house, for certain domestic conveniences, to which he had no access except through this property.  It was a small matter perhaps, but it bore on the intention of the occupants.  These were the simple facts.

   With regard to the law on the case, it was nearly as simple as the facts.  He took it to be quite clear that a lease can be made by word of mouth for any length of time.  The learned Counsel then referred his Lordship to various authorities.  He contended that, though there was no signed agreement, there was one which could be proved orally in Court; and though by the Statute of Frauds, 1st, 2nd and 4th sections, leases for periods over three years are void, unless in writing; by the later statute of 8th and 9th Vic. All demises for a period of longer than three years are void as to the duration of the term, but the tenants follow the condition of a verbal demise as from year to year.  That principle was recognised in a multitude of cases he cited - that a verbal lease for more than three years might create a tenancy from year to year. Though it did not allow the lessor to sue the lessees for not entering, it was good in regard to all stipulations which were consistent with a tenancy from year to year.  The same principle was laid down in Woodfall on Leases, p. 59 and in Chitty on Contracts, page 286; and he further quoted Doe v. Bell, 5 Durnford and East 571; Tressaux v. Savage, 23 L.J. Q. B., 339, and 23 L. J. Exch., 119, Lee v. Smith, where it was decided that the lessor was justified in distaining for rent, payable quarterly in advance, in accordance with a verbal agreement. 

   It seemed to him that the case last cited was something like the present. Here there was a verbal letting by Mr. Groom to Messrs. Wheelock and Stoddard for 5 years, at a monthly rental of Tls. 100, payable in advance.  That letting was followed by entry and occupation, and that, therefore, by itself; was sufficient to create a tenancy from year to year.  Such a tenancy was here created, commencing in 1868 and extending to 1871, and could only expire in November next.  The defendants had given no notice to terminate the tenancy at the end of November, and it seemed to him that they must be considered tenants of the premises till that time.  They had given notice, on 4th May, to terminate on 30th June; but if his friend attempted to found on this, at that the payment of the rent was monthly, it seemed to him that this had really nothing whatever to do with it.  He would now call

   F. A. GROOM, who, sworn, said - I was the owner of the house the subject of action.  I commenced building it in the early part of 1868.  I had a conversation with Mr. Wheelock about taking the house.  The term and the rent were subsequently agreed on; the term was to be five years from the date of occupation, and the rent Tls. 100 a month.  I named quarterly payments; but monthly were more convenient to Mr. Wheelock and Mer. Stoddard, and so I agreed.  In consequence of this agreement, I made a few alterations in the house.  Possession was taken in November 1868.  They paid rent from that time until October or November last year.  [Mr. Bird admitted that the rent was regularly paid for two years.] It was agreed between me and the tenants that a lease should be drawn up.  I drew up a lease, and showed a copy to defendants.  We discussed the terms.  Mr. Wheelock proposed that an addition should be made, giving the option of continuing for a further period of three or five years, after the expiry of the period which the draft contemplated.  We did ultimately agree upon what I understood were to be the terms of the lease.  I had them put into writing.  I gave the document to Mr. Stoddard.

   Mr. ROBINSON - The defendants have been served with notice to produce this draft.  Have they it?

   Mr. BIRD - My clients have mislaid it, and cannot produce it.

   Witness continued. - The draft sent to defendants was a copy of that which I hold.  I cannot swear it was a verbatim copy, but I believe there was no substantial alteration; there was no alteration in the terms.  The draft I sent did propose to let the premises for five years.  The document was never returned to me, signed.  I asked Mr. Stoddard for it several times.  He said he had not it handy, had mislaid it.  There was no actual objection made.  Mr. Stoddard said he preferred having the lease for three years, but all arrangements were made with Mr. Wheelock, and the arrangement with him was for five.  It was agreed that the rent be paid monthly in advance.  There was no arrangement about a month's notice.

   Mr. BIRD admitted the demand and refusal to pay.

   To Mr. BIRD - After I began building the house, I did speak to other parties about becoming tenants of it.  Mr. Hancock spoke about it, and several others, but I forget their names.  Mr. Wheelock was often present while the building was going on, and any alteration her wished, I was willing to make, I also suggested alterations myself.  I cannot remember the month when the conversation took place between myself and Mr. Wheelock; I believe it was between June and November.  I do not remember anything being expressly said about drawing up a lease.  It was an understood thing.  The draft lease of which I have spoken was shown to Mr. Wheelock and Mr. Stoddard, some time after they had gone into the house.  I cannot swear to the time.  I think it was very shortly after they went in - within a month.  I had no intention of making it a yearly lease; it was for a term of five years.  The copy which was sent to defendants is to the best of my belief a copy of the document produced.

   Mr. BIRD pointed out that, in this document, the rent was to be paid monthly in advance.

   To Mr. ROBINSON. - I can mention alterations which were made at the special request of defendants.  An additional house was built for the watchman, and a dog kennel.

   Mr. ROBINSON, to define the date of drawing up the lease, called

   G. A. LINDSAY, who said - I knows the handwriting of this document.  It is Mr. Head's.  I went home on the 5th February 1869.  I remember seeing the document before I went home.

   This closed the case for the Plaintiffs.

   Mr. BIRD said his first duty was to apply for a nonsuit.  In doing so, he relied upon the 4th section of the Statute of Frauds, a Statute which had been said to be one of the wisest in the Statute Book.  This provided that no action should be brought to charge any person upon any contract on a sale of land or affecting any interest in land, unless a memorandum of agreement, signed by the parties, should be produced in writing.  Mr. Bird quoted Broome's Commentaries on Common Law, p. 379 and 390, to prove that an agreement for a lease is within the meaning of the Statute of Frauds; also Woodfall's Landlord and Tenant, p. 189. This action charged defendant on a contract for a year to year tenancy; but there was no evidence of an agreement in writing, to support such a contract.  The plaintiffs relied upon the implication drawn by the law in case of a tenant entering a property under a lease legally void; and argued therefrom a presumption of a yearly tenancy.  But a tenancy from year to year was a contract within the meaning of the 4th Section of the Statute of Frauds, and there should be some evidence in writing regarding it.

   The JUDGE. - Does the 4th Section apply to such a case?

   Mr. BIRD said if an agreement was to be in writing, surely a lease must be so.

   Mr. ROBINSON did not contend for a written agreement; he maintained that there was an oral demise.

   Mr. BIRD. - That is an agreement.

   Mr. ROBINSON. - Not at all.  This was not an action upon any contract regarding land.

   The JUDGE held that it was not necessary that an agreement should be signed, nor even that it should be in writing in such a case.  Some agreement must have been come to, under which the tenants entered upon occupation.  He must over-rule that objection.

   Mr. BIRD then went on to contest the inference that there was a yearly tenancy.  The plaintiff's position was that there was a yearly tenancy, because, when tenants entered under a void lease, and possession was given and rent passed, the law implied a tenancy from year to year.  And if that were all, he should agree with him.  But there was a corollary, that the payment of the rent must be made with some reference to a yearly tenancy.  They payment of rent was only a proof of contract, when it could be shown that the parties intended to enter into one.  Mr. Bird quoted Smith on the Statute of Frauds, and other authorities, to show how the Courts came to assume a tenancy from year to year.  In one case, the words "payment with reference to a yearly holding were used."  They appeared to have taken advantage of every possible ground to infer a yearly tenancy when there was a void lease, holding that payment for a quarter or half year - an aliquot part of a year -  implied a yearly tenancy.

   Mr. ROBINSON. - Is not a month an aliquot part of a year?

   Mr. BIRD contended that it was not.  An aliquot part meant a fraction of a year; and a month was itself a specific division of time.  This, then, was one ground of his defence. He denied that there was a yearly tenancy.  But he had a second ground of defence, which was that there was a monthly tenancy.  The Court must take the circumstances into consideration, in inferring the intention of the parties.  If the Court concluded that the agreement was not made with reference to a yearly tenancy, it must assume terms on the basis of the circumstances, chief of which was the payment of rental.  His contention was that the terms thus created were indefinite.  The term originally contemplated, five years, having fallen through for want of a signed agreement, the actual term became indefinite, and was just as likely to be for less as for more than a year.  It was just as likely to be for three, or for six months, ass yearly.  The plaintiffs contended for a yearly tenancy.

   Mr. ROBINSON said, they contended for five years.

   Mr. BIRD. - But there was no evidence to prove that; the Court could only look to a deed in that case, and there was no deed.  The payment of rent then became one of the principal circumstances.  And he submitted that, in this case, the presumption was no more in favour of a year than of less.  The Court could only hold a year's tenancy implied, with reference to circumstances; and Mr. Groom had said that he never contemplated a yearly tenancy; and the Court actually found a rental paid monthly.  Finding a monthly rental, it would not be justified in assuming a yearly tenancy; and in case of a monthly rental, a monthly notice to quit was sufficient.

   The JUDGE said it might as well be argued that a quarter was not an aliquot part of a year; it was an arbitrary division, no more an exact fourth than a month was an exact twelfth of a year.  He must look, too, at the custom of Shanghai, where monthly payments of rent were frequent.  Taking the original intention of a five years' lease into consideration, he was inclined to think the intention was rather in favour of more than a yearly tenancy, than less.

   Mr. BIRD - If the Court holds that the intention was more than a yearly tenancy, it is bound by the 4th Sec. of the Statute of Frauds.

   Mr. ROBINSON said this was really reproducing the objection which had been over-ruled at the beginning of the case.

   The JUDGE held that the Sect. did not apply in this case.  The 2nd. Sec. of the Statute expressly excepted leases not over 3 years.

   Mr. BIRD would now call witnesses to show the intention in regard to the lease.

   T. R. WHEELOCK - About the middle of 1868, I and Mr. Stoddard in tended to build a house for ourselves.  We went so far as to have plans drawn out.  Afterwards, Mr. Groom said - it's no use you building a house; I am going to build one; why not take mine?  We eventually agreed, and entered on Mr. Groom's house, in November 1868.  The draft lease was first submitted to me, so far as I can remember.  I never signed not approved of the draft.  I never instructed any one to write a spare copy.  I can't remember ever having asked Mr. Groom to make a spare copy.  It was agreed that the amount of the rent was to be Tls. 100 a month.  Nothing was said about yearly rental.  These are the receipts for the monthly payments.  I do not remember the word "quarterly" ever having been mentioned.  It was never my intention to take the presences from year to year, and I never agreed so to take them.

   To Mr. ROBINSON - Without being able to state positively, so far as I recollect, I did not see a draft lease for a year after I entered, notwithstanding what Mr. Lindsay says.  It was never my intention to take the house from year to year.  It was the original intention to take it for five years.  When I first paid my rent, I can't tell what my intention was.  I can't say whether I was then under the impression I should take the house for 5 years or not.  I had changed my mind about the 5 years, but I did not speak to Mr. Groom, and do not know if he had changed his mind.  I don't remember Mr. Groom adding a clause at my request, giving the option of extending the lease.  I don' say Mr. Groom is wrong in saying he spoke with me about that, but I don't remember it.  When I entered, I cannot tell that I thought at all about being able to leave at a month's notice.

   To the Court - I changed my mind because I thought five years very long time.  I had no definite intention in my mind, when I had changed, on the matter.

   To Counsel for Plaintiffs - I am not aware I gave Mr. Groom any notice that I had changed my mind.

   To the Court - We stayed from the 1st November, 1868, to the 30th of June, 1871.

   L. H. STODDARD, sworn, said - I am a citizen of the United States.  Mr. Wheelock and I had some thought of building for ourselves, but changed our intention on a proposal from Mr. Groom that we should take a house he was building.  We entered the house in the middle of November, 1868, and were to pay a monthly rental of Tls. 100.  There was no talk of it being yearly or quarterly.  I can't say positively when I first saw the draft of lease, but I think it was several months after we had been in occupation.  I did not approve of it, and did not sign it.  It was never my intention to take the premises by the year, or from year to year.  Rent had always been demanded and paid on the first of every month.  The rental was described in the lease shown to me, as a monthly rental.

   To Mr. ROBINSON - The rental was paid monthly in accordance with the arrangement with Mr. Groom.  Ass to whether other houses in the road are paid monthly, I cannot say.  If asked whether w house in the Bubbling Well Road were worth so much - I should say so much a month, not so much a year.  I knew Mr. Hannen's rent next door, but I do not know the term for which he had the house, though I know it was to let after he went away.  I never signed nor approved the draft of lease.  I disapproved of it, but I cannot say if I ever communicated my disapproval to Mr. Groom, nor whether I ever told him, or led him to understand that I would not be his tenant for five years.  I do not recollect any conversation with him at all to that effect.

   Mr. BIRD submitted, having no further evidence to call, that what he had adduced proved conclusively, and there was no evidence against it, that it was the intention of the parties to take the house by the month, if any evidence of intention was to be gathered from their evidence at all.  As a point of law, he submitted the Court would presume nothing which did not arise out of the evidence of parties.  It was for the Court thus to ascertain what was the term created under law, and the law only held that a yearly tenancy was created by the payment of rent for aliquot parts of a year.  If he referred to the cases showing that, where there were circumstances evidencing that it was not the intention of parties to take a house from year to year, the Court should not then raise the presumption.

   His Lordship observed that the presumption was assumed prima facie.

   Mr. BIRD said it was, unless rebutted by evidence to the contrary.  He contended that there was in the present instance the evidence required to do this.  Both Mr. Wheelock and Mr. Stoddard denied that they took or intended to take the premises from year to year.  True, there was an agreement for five years, but it the Court could not recognise.  The ordinary legal presumption was raised on the term for which rent was paid, and monthly payment meant a monthly responsibility.

   His Lordship said the intention appeared to be to enter for a longer period.

  Mr. BIRD said, yes; to take the house for five years, but the proposition with regard to verbal agreement for long periods scarcely applied in this case, because that principle was that, where the tenant entered in England for over three years under an agreement, then he became naturally a tenant from year to year, because there the payment of rent would be described as for half or quarter of a year. In this particular instance, however, the rental was a monthly one, demanded and paid monthly, and the matter did not stand as if the lease had been drawn up or instructions given for drawing it up before entering, but the evidence went to show, and Mr. Groom's evidence was not sufficiently categoric on that point, that they occupied the premises on a monthly rental for nearly a year before any lease had been shown to them. Under these circumstances the yearly tenancy, requiring six months notice to quit, was in force, which month's notice had been given.  The presumption relied on from the cases quoted was one which arose in England under the different conditions he had noticed.

   His Lordship questioned if there was anything to negative that presumption in the case here.

   Mr. BIRD did not see how the Court could, in the face of the monthly payment, assume that it was the intention of the parties to make the tenancy from year to year.  It really depended - and was the principle from which the presumption was argued - on the period of the payments, whether the period of tenancy, when not expressly mentioned, was from year to year.  The nullity of the agreement required them to fall back on the terms of payment.  The first point to suggest itself to the mind of a judge, was how the rent was paid?  If the word "year" was mentioned in connection with the payment, as for aliquot parts of a year, then the Court assumed a yearly taking.  In the present case the word "year" was not mentioned, and the evidence all went against the assumption of a yearly taking.  The house was not of a class ordinarily let for terms of years or from year to year.

   Mr. ROBINSON said as a matter of fact, the facts were against this statement.

   Mr. BIRD insisted that there were lots of houses taken by the month.  The learned counsel then showed that the case of a farm tenancy, quoted on the other side, did not apply, the decision in favour of the tenant, that his tenancy was yearly, being for his protection against summary ejectment, and was extended only to houses let for a term of years or from year to year. The learned counsel here quoted in support of his argument that the terms of payment formed the presumption as to term of tenancy.  It might be said that Messrs. Wheelock and Stoddard were left in possession of these premises on the understanding that they were to take them for five years, but that was void, and the law could not presume from that a yearly taking.  Why, even in the lease, should the thing be described as a monthly rental?  The word year was not used.  If it had said a yearly renal of Tls. 1,200, payable monthly in advance, there would have been no case for his clients.  But the word "annual" did not appear; and as the rent was payable monthly, the lease was inconsistent with a yearly holding.  Many houses in Shanghai were held by the month; and the Court could not assume that the presumption made out by the law was here the intention of the parties.  It was easy enough to understand why the Court should hold that, in the majority of cases at home, but it was very different out here.  On the face of the lease, what was the presumption arising at law as to the intention of the parties?  What ground could the Court have for assuming a yearly holding?  The whole case lay in a nutshell.  The term was indefinite, and it was for the Court to decide what it was, but he submitted that it was a monthly one, and that a month's notice was sufficient, nor could he see how the Court could come to any other conclusion from the case before it.

   Mr. ROBINSON asked of it was his Lordship's wish he should reply.

   His Lordship having expressed assent,

   Mr. ROBINSON said, notwithstanding his learned friend had discovered that the case lay in a nutshell, it had taken him (Mr. Bird) rather a long time to extract the kernel.  His learned friend's argument rested on the hypothesis that the parties did not intend a yearly tenancy. But it seemed to him (Mr. R.) that their intention was to create a term of 5 years.  His friend contended that was void, but he submitted that it was by no means so.  On the contrary, though the term itself was void - there was no actual demise for the term of five years by law - the evidence of the parol demise was evidence of the intention of the parties.  Then, that law said that inasmuch as there had been occupastion and payment of rent, the term for which they shall be considered to contract shall be a tenancy from year to year. 

   His friend had endeavoured to build an argument upon the reservation that the rent should be monthly.  Bu the went so far as to say that it would make no difference if the rent were payable day by day, if they had taken a parol lease for seven years, it would be simply absurd that the tenancy should cease at a day's notice.  Something must be found in the contract between the parties to show that it was taken for a less term that a year.  But here the direct evidence was all one way, and the evidence of Mr. Wheelock and Mr. Stoddard was all negative.  It was very unfortunate that, though the other side could produce rent receipts, they could not produce the lease.  Mr. Wheelock had, however, admitted that it was the intention to take the house for five years, but he did not remember a conversation he had with Mr. Groom.  The Court could not allow the evidence of Mr. Wheelock to weigh against Mr. Groom's positive even fence.  There was a conversation regarding the clause giving the option of renewing the lease.  The one did not remember it, while the other said they had such a conversation.  His friend said the mere fact of the rent being paid monthly showed an intention of a monthly tenancy.  Supposing the case that Mr. Groom was going to build a house, and being asked to make it to suit certain tenants, and whist he would let it fort, replied Tls. 100 a month; and it having been built as required, would the Court hold that there was an agreement for as monthly tenancy?

   The original intention was admitted to have been for five years; the law said that, so far as the term went, this could not be carried out; but every other stipulation consistent with it should, as in a yearly tenancy, if occupancy were taken.  In Lee v.  Smith, which was a parol demise for seven years, the reservation was that the rent was payable quarterly, and taking into consideration the system of paying monthly here, the case was perfectly analogous.

   His LORDSHIP believed that the custom extended here to taking houses by the month as well as paying rents monthly.

   Mr. ROBINSON said the very large bulk of the houses were let for terms with rents payable monthly, and the exceptions were exceedingly rare.  If every hong in the place were taken, it would be found that the custom was to pay rents monthly, if the properties were in Shanghai, and quarterly, to suit exchange, if absent.

   Mr. BIRD observed that the statements just being made were unsupported.

   Mr. ROBINSON might mention, as a matter of fact, that Mr. Groom had four other houses along the same road, all of which were let for terms, and all of which paid monthly rentals.  That was the usual reservation of rent throughout this place, and the inference which would be drawn from it in England, could not be drawn from it here.  But this, after all, was nothing, if there was nothing else to show that the parties intended a term of tenancy.  There was evidence, however, that they intended five years; it was true this agreement was void, and that was the very thing that made the tenancy one from year to year.  In Lee v. Smith, as the agreement for seven years was void, by the Statute of Frauds the defendant was considered a tenant from year to year.  He again adduced the authority he had quoted in opening (Woodfall on the subject of how leases are made), and contended that all stipulations, other than the term, consistent with yearly tenancy, were to be upheld in the case before the Court.  The authorities were so clear and so express, he could not conceive how the proposition could be doubted.  He believed he had now called the attraction of the Court to all the points.

   His LORDSHIP thought he must consider the lease as one from year to year.  The word monthly in the document he did not think sufficient; rent payable monthly was the usual way in which rents were paid here, and he should be going contrary to all the precedents on the question if he decided that the tenancy was anything else than one from year to year.  That the rental should be described as monthly did not really invalidate the term from year to year.

   Judgment for plaintiff with costs.

Published by Centre for Comparative Law, History and Governance at Macquarie Law School