Wible, David A.

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96 LAW JOURNAL -DECEMBER, I939to render final judgment for defendant; in fact, it would have beenerror for it not to have done so. 2 The federal rule laid down in theSlocum case," is based on the right of trial by jury guaranteed by the7th Amendment to the United State Constitution; it is said that whena verdict is set aside the issues are left undetermined, and until they aredetermined in a jury trial no judgment on the merits can be given. Ina persuasive dissent written by Hughes, J., and concurred in by Holmes,Lurton, and Pitney, JJ., the view is expressed that the rendition offinal judgment by the reviewing court would not be a violation of the7 th Amendment since the court would be deciding a question of law,not of fact, that is, whether there was sufficient evidence to go to thejury. In a later case 4 the Supreme Court sustained the rule of theSlocum case without a dissent. The Ohio Supreme Court finds noconstitutional difficulty in rendering final judgment,2" relying on anargument similar to that expressed in the dissenting opinion in theSlocum case. Moreover, the Ohio courts are authorized by statute torender final judgment in such cases. H. M. M.REAL PROPERTYREAL PROPERTY - TERMINATION OF A LEASE BYFORECLOSURE OF PRIOR MORTGAGEIn 1926, Kenyon Painter executed a mortgage to the plaintiff, theNew York Life Insurance Company, and in 1931 leased the premisesfor a seventy-month term to the Simplex Products Corporation, defend-ant in the case at bar. The defendant paid rent to Painter until Sep-tember, 1933, when by agreement payment of part of the rent wasmade to the plaintiff while the remainder was paid to the Union TrustCompany, which held a mortgage on the residue of the leased property.In December, 1934, the plaintiff brought an action to foreclose hismortgage, but failed to join the defendant-lessee as a party. Plaintiffdict, the reviewing court can render final judgment rather than remand the case for a newtrial if it holds that there was not sufficient evidence to go to the jury. Baltim. & Carol.Line v. Redman, 55 Sup. Ct. 89o. Note 45 Yale L.J. 166 (1935) zs Ia. L. Rev. 117( 5 Majoros v. Cleve. Lner. Rd. Co., 127 Ohio St. z5g, 187 N.E. 857 (1933); Crey-hound Lines v. Martin, 127 Ohio St. 499, 189 N.E. 244, 14 Ohio L. Abs. 327 (934)iLakeside Hosp. v. Kover, 131 Ohio St. 333, z N.E. (2d) 857, 6 Ohio Op. 54 (1936).23 See note 21, supra.24 Pederson v. Del., L. & W. R. Co., note 22, supra."1 Keller v. Stark Elec. Ry. Co., ioz Ohio St. 254, 13o N.E. 5o8, sz Ohio App. 3z6(292i); Ellis and Morton v. Ohio Life Ins. Co. , 4 Ohio St. 628, 64. Am. Dec. 6zo, iHand. 97, sz Ohio Dec. Rep. 47, 1 Hand. i9, sz Ohio Dec. Rep. 58 (1855).2 G.C. sec. 2Z223-38.NOTES AND COMI'MENTS 97subsequently bought in at a foreclosure sale. The defendant thereaftercontinued paying the rent to the plaintiff until June, 1935. The presentaction was brought for the collection of rent for the months of Decem-ber, 1935, to May, 1936, inclusive. Saying that the purchase of theproperty at the foreclosure sale operated to terminate the lease and thatthe subsequent monthly payments of the rent created a periodic tenancy,the Supreme Court of Ohio held that the defendant was liable for therent only for the periods of occupancy.'Assuming that the lessee is made a party to the foreclosure proceed-ings and that there is no subsequent attornment, all jurisdictions seem tobe agreed that the foreclosure of a prior mortgage will terminate a sub-sequent lease where there is no statute to the contrary.2 And this ruleapplies as effectively where the mortgagee-purchaser attempts to treatthe lease as continuing, bringing action for the collection of rent,' aswhere he desires the lease terminated.4 The theory is that the purchaserat a foreclosure sale of a prior mortgage does not take the reversionaryinterest of the mortgagor. The transfer of interest is regarded as occur-ring as of the time when the mortgage was executed, and the enforce-ment of that mortgage operates to extinguish subsequent encumberanceson the property.' It is to be noted that, although the bases for this ruleis apparently the protection of the interests of the prior mortgage, it isheld, nevertheless, to operate to his disadvantage in denying him theright to receive rent which accrues after the sale.There is a marked split in the decisions where the lessee is not joinedas a party to the foreclosure, the majority rule being that the lease insuch event is not terminated.6 The theory underlying this doctrine isthat for the decree of foreclosure to operate as against one who has aninterest in the property such as a lessee, it is necessary that he be joined asa party.' In the jurisdictions where this rule operates, it is applied asreadily for the advantage of the purchaser at the foreclosure sale where'NV, x York Life Insurance Co. v. Simplex Products Corporation, 135 Ohio St. 5ox,zI N.E. (2d) i85, 14 Ohio Op. 396 (I939).'Peters v. Elkins, 14 Ohio Reports 344 (1846); Dolese v. Bellows-Claude-NeonCo., z6I Mich. 57, 245 N.V. 569 (193z); Waigreen Co. v. Moore, ii6 N. J. Eq. 348,173 Adt. 587 (1934).a Peters v. Elkins, supra.4 Doccnard v. Graff, 40 Iowa 597 (1875).TFFANY, (x ed. 19 1 o) LANDLORD AND TENANT, p. I I 18.0 Walgreen v. Moore, supra; Mfetropolitan Life Insurance Co. v. Childs, Z30 N. Y.285, 13o N.E. 295, 14 A.L.R. 658 ('9z), Gale v. Carter, 154 11. App. 478, 164 II.App. 545 (x9io); Dundee Naval Stores Co. v. McDowell, 6S Fla. iS, 61 So. IoS, Ann.Cas. 1915 A, 384 (x9x3). However many jurisdictions hold that the failure to join theles ce doei not operate to preserve the lease. Dolese v. Bellows-Claude-Neon Co., supra;McDermott v. Burke, et al., x6 Cal. 58o (x86o); Western Union Telegraps Co. v. AnnArbor R. R. Co., 90 Fed. 379 (x898); 14 A.L.R. 664.14Z C.J., p. 59.98 LAW JOURNAL -DECEMBER, 1939he wishes to treat the lease as continuing8 as for the benefit of the lesseedesiring to prevent ouster.' To uphold the mortgagee-purchaser's rightto collect the rent where the lessee is not joined in the foreclosure, thesejurisdictions treat the reversion of the mortgagor as passing to themortgagee-purchaser."0In the case of Nunn v. Hutchison" the Court of Appeals of SummitCounty, at the suit of a lessee, enjoined the sheriff from disturbinglessee's possession by a writ of possession because the lessee was not madea party to the mortgage foreclosure. This case was relied upon by theplaintiff in the case at bar as indicating that Ohio required the lessee tobe made a party to the foreclosure proceedings in order to terminate thelease. It may be noted, however, that the parties' rights in the propertywere not passed upon in the Nunn case, the court relying upon theprinciple that: "Writ of possession can be used only against parties toforeclosure suit."' 2 This decision seems consistent with the underlyingtheory of the majority doctrine, in that it protects the lessee where hisrights have not been passed upon in the foreclosure proceedings. Theinconsistency arises in jurisdictions where the mortgagee-purchaser ispermitted to rely on this rule as a basis for the continuation of the lease.In these jurisdictions the mortgagee, by intentionally excluding thelessee as a party to the foreclosure, may obtain the benefits of the leaseover the lessee's objection by the operation of a rule which exists for thebenefit of the lessee and to protect his interests.All of the authorities are agreed that even after the termination ofthe lease by foreclosure sale under a prior mortgage, the lessee by recog-nizing (i.e. "attorning" to) the purchaser, and the latter by acceptingthe lessee as his tenant, may create the relationship of landlord and ten-ant. The attornment may be made expressly or by implication, as inthe payment and acceptance of rent. 3 A conflict exists as to whetherthe original lease governs the tenancy or whether a new tenancy iscreated, the terms of which are determined by the facts surrounding theattornment. Most courts hold that the lessee's acknowledgment of themortgagee as landlord creates a tenancy at will which may mature intoa periodic tenancy upon the periodic payment of the rent. 4 Behind thisis the conception that the reversionary interest fails to pass to the mort-8 Ellveay Newspaper Workers, etc. v. Wagner Market Co., zio N.J.L. 577, x66Atl. 332 (1933)5 Metrolopitan Life Insurance Co. v. Childs, supra.0 Brush v. Fowler, 36 Ill. 53, 85 Am. Dec. 38Z (1864).10 Metropolitan Life Insurance Co. v. Childs, supra; Ellveay Newspaper Workers, etc.v. Wagner Market Co., supra.11 1 Ohio L. Abs. 283 (1922).'2 Syllabus 3, Nun v. Hutchison, supra.is TiFFANY, (x ed. igio) LANDLORD AND TENANT, p. 411-1 Cartside v. Outley, 58 Ill. 210, ix Am. Rep. 59 (871); Burke v. Willard, 24-3Mass. 547, 137 N.E. 744 (1923).NOTES AND COMMENTS 99-agee-purchaser. These courts hold that, since this reversion of themortgagor is not acquired by the purchaser at the mortgage foreclosuresale, there is no privity of estate or contract between the purchaser andthe mortgagor's lessee.15 Unless in some manner the mortgagee-purchaser acquires the reversionary interest of the mortgagor upon fore-closure, there seems to be no legal foundation for regarding the oldlease as continuing. New York, New Jersey, and Texas have held thatthe attornment by payment of rent binds the leasee for the term of theoriginal lease.'" But these are jurisdictions which treat the reversionaryinterest of the mortgagor as passing to the purchaser when the lesseeis not made a party to the foreclosure.We may approach the problem raised by the principal case from thepoints of view of two separate groups of jurisdictions. First, considerthe minority jurisdictions which hold that the foreclosure sale operatesto terminate the lease, regardless of the failure to make the lessee a partyto the foreclosure. 7 In treating the mortgagor's reversionary interestas not passing to the mortgagee-purchaser even where there is a subse-quent attornment, these courts are consistent in their approach and afforda reliable rule for predicting the effect of a foreclosure sale on tides andinterests. On the other hand, it may be noted that in the principal casethe defendant-lessee is enabled to take advantage of a situation which hehad not contemplated when entering into the lease or at any time there-after, and to benefit by a rule which is based upon the protection of theprior mortgagee as against junior encumbrancers. The plaintiff-mort-gagee evidently proceeded with the foreclosure of his mortgage believingthat he would continue to receive the rentals for the remainder of thelessee's term, and the lessee by his continued monthly payments indicatedthat he regarded the lease as continuing after the foreclosure. Had themortgagee known that the foreclosure sale would operate to terminatethe lease, he might well have refrained from foreclosing the mortgage,accepting the monthly payments of rent until the term had expired.Would a more desirable decision have been reached in the majorityjurisdictions which hold that the lease is not terminated when the lesseeis not made a party to the foreclosure?"8 The plaintiff would haveprevailed in any of these jurisdictions, but it may be questioned whetherthe decision should turn on the failure of the mortgagee to make the'-,IMcarland Real Estate Co. v. Joseph Gerardi Hotel Co., zoz Mo. 597 (i9°6).1" clly v. Osborne, 17z App. Div. 6, 157 N.Y.S. ssoo (1916); Ellveay NewspaperWor:rs, Ce. v. Wagner Market Co., supra; Peck and Hills Furniture Co. v. Long, 68S.W. (2d) zS8 (Texas, 1934)." Supra, note S. As a result of the decisions in Peters v. Elkins, supra, and in theca e at bar, it it apparent that Ohio may be included in this group of jurisdictions." Supra, note s.I00 LAW JOURNAL- DECEMBER, 1939lessee a party to the foreclosure proceedings, since such application againinvolves employing a rule which has its basis in the protection of therights of the party against whose interest it is utilized. Hardship mightbe worked against the lessee as in the case of Metropolitan Life Insur-ance Company v. Childs9 where the lessee, in reliance upon a fore-closure proceeding to which he was made a party, vacated the premises,only to find later that the mortgagee had withdrawn his name as aparty to the foreclosure shortly before the actual sale.In Curry v. Bacharach Quality Shops Inc.,2" the Supreme Court ofPennsylvania held that by force of the operation of a statute2" of thatstate, the purchaser at a mortgage foreclosure had the option of affirm-ing or disaffirming a subsequent lease, but, having once affirmed thelease he stood in the position of assignee of the reversion and could notsubsequently disavow the lease. By statute22 the interests of the lesseeare also protected so that he cannot be dispossessed unless the mortgagee-purchaser makes him a party to the foreclosure (scire facias in Pennsyl-vania)." The Pennsylvania solution appears to the writer to be a happyone. It is definite in that it confers upon one party, the purchaser, theright and obligation of determining whether or not the lease shall con-tinue in effect; and at the same time it protects the lessee from evictionwhere he has not been notified of the disaffirmance of the lease.D. A. W.TORTSTORTS -F ORMS OF ACTION - TRESPASS - BATTERYOR NEGLIGENCEA sheriff was pursuing an escaping misdemeanant who had previ-ously been arrested by him. While engaged in the pursuit the sherifffired several shots intending to frighten the misdemeanant into stop-ping; one of the bullets struck the plaintiff, a bystander in the publicstreet. The Court of Appeals for the Third District held the sheriffliable to such person saying that the sheriff "commits an act of trespassagainst the person so injured."'At early common law an action in trespass could be maintainedwhenever the injury was direct and with force. Hence, an action couldbe maintained in trespass if the plaintiff could prove that the defendant"e Supra, note 5.21 271 Pa. 364, 117 Atl. 435 (92).2122 P.S., Sec. 2611 (1836).12 i P.S., Sec. 309 (i9oi).23 Nevil v. Heinke, 2z Pa. Super. 614 (1903)."Young v. Kelly, 6o Ohio App. 382, zi N.E. (zd) 6oz (938).

Real Property -- Termination of a Lease by Foreclosure of Prior Mortgage

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Real Property -- Termination of a Lease by Foreclosure of Prior Mortgage

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