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But in the ordinary case of a lease of a building for any purpose at the discretion of the lessee, if there has been a breach by the lessor of a covenant to repair, the rule which measures the damages by the difference in general rental value is usually compensatory, and in most cases best satisfies the demands of justice.
... The claim that the cost of repairing the walls is the measure of damages cannot be sustained. If the tenant had elected to repair the walls it is possible that he could have charged the necessary expense to the landlord, or recouped the amount in an action for the rent. But a tenant is not bound to make permanent and important repairs, which the landlord was to make, but may seek his remedy by action to recover the damages or by counterclaim” (20). In another case the defendant covenanted in a lease of a store-room to plaintiff that he would put a new roof on it by such a time, provided that he should not be liable for any damage to plaintiff's goods by rain or snow before that time; and it was held that the defendant was not liable for the damages from the weather after the date referred to by reason of his refusal to perform his covenant. The court said that the plaintiff was bound to protect his goods from a known danger or bear the loss (21)
§ 63. Liability of landlord for repairs and improvements made by tenant: In general. In the absence of contract or statute, the law imposes no obligation on the
(20) Thomson-Houston Electric Co. y. Durant Land Co., 144 N. Y. 34.
(21) Hendry v. Squier, 126 Ind. 19.
landlord to pay the tenant for repairs or betterments made by him, and the tenant cannot even set them off against his liability to pay rent. “The tenant is presumed to repair and improve for his own benefit; and his right to the result of his labor expended for that purpose is to reap the enhanced benefit during the term, and, within certain limitations, to remove the improvements before its expiration. It is only by virtue of an express agreement by the landlord to pay for improvements that the tenant can recover their value of him. But a special promise may be implied from conduct; and, if the landlord leads the tenant to believe that the value of the improvements he may thereafter put upon the premises will be deducted from the rent or paid to him, a contract to do so may be implied, and a promise to pay, thus imputed to the landlord, is a counterclaim in an action for the rent. But the mere fact that the landlord permits the tenant to make permanent improvements without protest or warning that he will not pay, raises no presumption that he intends to do so" (22). If no rule has been provided by the lease as to how the value of the improvements is to be ascertained, a court will estimate them by their present value to the land, though much less than their original cost to the lessee.
§ 64. Same: Lessor's assigns. A stipulation in the lease that the landlord shall pay for improvements put on the premises by the lessee during the term or renew the lease entitles the landlord to terminate the lease at
(22) Gocio v. Day, 51 Ark. 46.
the end of the term by paying for the improvements, or at his option to escape liability for the improvements by tendering a new lease; but he must make his election by the end of the lease or he loses his right to choose, and if he has put it out of his power to renew by selling the land in the mean time, he must pay and is in no way relieved from his covenant by disposing of the property. On the other hand it is a covenant running with the land and the reversion though assigns are not mentioned ; and unless the tenant has agreed to surrender possession before being paid, he may retain possession until he is paid for his improvements, with liability for ground rent after the expiration of his term, and in the mean time he may prosecute suits for the money against the lessor and the grantee of the reversion. The fact that the lessee is in possession of the land charges all purchasers with notice of his rights if they do not take the pains to inquire of him, and they cannot escape liability either on the ground that they were not party to the contract or did not know of it, as it runs with the reversion. The assignee of the tenant may claim all the rights of the tenant and sue the lessor of his grantee (23). If the lease provides that the lessee shall not sublet or assign without the lessor's assent, an assignment without his consent would confer no such rights on the assignee; and the right of the lessee may in many cases be lost, as by
(23) Ecke v. Fetzer, 65 Wis. 55; Franklin Land M. & W. Co. v. Card, 84 Me. 528. In the older cases and in some states today it is held that covenants to pay for improvements to be made do not inure to the benefit of the assignee of the term if assigns are not mentioned in the lease. Etowah Min. Co. v. Wills Val. Min. Co., 121 Ala. 672.
the surrender, abandonment, or forfeiture of his term. If a tenant makes improvements under such a covenant in his lease and then is ousted by a paramount title, he may claim compensation for permanent improvements, as a bona fide occupant.
$ 65. Liability of tenant to make repairs and improvements: In absence of contract. In the absence of any contract the tenant is bound to repair or make good all injuries to the premises due to his negligence or wrong, and to make such slight incidental repairs as are necessary to keep the buildings wind and water proof; but he is not bound to make substantial repairs nor make good the natural deterioration from ordinary wear and tear, or replace old materials with new. For injuries to the premises from reasonable use according to the lease, or for destruction from accident without negligence on his part he is not liable. But if he uses the premises for a purpose in violation of his contract he does so at his peril. Subtenants are under the same liability. A lessor was permitted to recover against a sublessee for the destruction of a warehouse resulting from the storing of cotton in it, a risk not contemplated by the lease; and it was held to be no defense that the lessor had already recovered the amount of his loss from a fire insurance company, which was a matter wholly between the owner and the insurance company for which the insurers had been fully paid by the premiums (24). Of course the burden of proving the negligence of the tenant and that it produced the loss is on the party seeking to recover
(24) Anderson v. Miller, 96 Tenn. 35.
because of it. At common law the tenant had the right to take from the premises the timber necessary to make repairs ($ 48, above).
$ 66. Same: Under contract. When the tenant has covenanted to make repairs he is bound to do so. If the covenant is general he must make the repairs regardless of the cause of the damage, unless it be the fault of the lessor himself. If there is a total destruction of the premises from inevitable accident this general covenant requires the tenant to rebuild, except where there are statutes, as there are in a few states, that such covenants shall be given a narrower construction unless the intention of the parties is clearly expressed that the tenant shall be bound to rebuild. An agreement of the tenant to repair or build requires him to furnish and pay for the materials with which to make the repairs, except in so far as his right to estovers enables him to take the materials from the demised premises ($ 48, above). In this case also the fact that the landlord's loss has been made good by insurance is no defense to the lessee for breach of this covenant. “In the present case, although the defendant had, under his hand and seal, stipulated that he would keep in repair, support, and maintain the fences and buildings, with the exception of natural decay, he was undoubtedly astonished at being called upon to rebuild a house, the use of which he had enjoyed but for a year; and yet he has, in express terms, covenanted so to do. His excuse would be that he never read the covenants in his lease, or that he did not understand the force and effect of the terms. But the law does not protect