AGREEMENT

FOR A LEASE.

Cases in which

a future lease

has been held

not to make an agreement executory.

but the tenancy was to be "at and under all usual and customary agreements, as between landlords and tenants, where the premises are situate," and the landlord was to allow a proportionate part of the rent for three pieces of land, which were excepted from the farm agreed to be demised; it was decided that this could only be an agreement, on the ground that otherwise the parties must go to a jury, on every dispute, to see whether any particular covenant was usual or not, and also to determine the rent of the excepted land; and that the parties could not mean to constitute themselves landlord and tenant, till it was ascertained what was the rent, and what were the terms of the tenancy. (Morgan d. Dowding v. Bissell, 3 Taunt. 65; see also Price v. Williams, 1 Mee. & Wels. 6).

But the foregoing cases cannot be much relied on in the preparation the reference to of agreements, for the current of modern decision is certainly to the effect, that, except in cases in which the terms of the future lease are unascertained, a stipulation for a future lease will not render an agreement executory. Thus, where, after words of actual demise, there was an agreement to grant a lease when certain buildings had been finished by the tenant, it was held, that as the tenant had to lay out money on the premises, he took an immediate legal interest, with an agreement for a subsequent more formal assurance. (Poole v. Bentley, 12 East, 168). If, however, the landlord be to lay out money, that, it seems, is an argument against an actual demise. (Roe d. Jackson v. Ashburner, 5 T. R. 163; Regnart v. Porter, 7 Bing. 451). An agreement "to grant, seal, and execute a legal and effectual lease," upon specified terms, with a stipulation for the tenant "in the meantime, and until such lease shall be made and executed, to pay the aforesaid yearly rent in manner aforesaid, and to hold the said premises subject to the covenants above mentioned;" and also with a stipulation for the tenant to expend money on the premises, is a present demise. (Pinero v. Judson, 6 Bing. 206; S. C., 3 Moo. & Pay. 497; see, likewise, Wilson v. Chisholm, 4 Car. & Pay. 474. See, however, Bicknell v. Hood, 5 Mee. & Wels. 104). And in a similar case in which there was a stipulation as to the terms on which the tenant was to hold till the lease was granted; and also a proviso that the instrument should not operate as a lease or actual demise, it was held that the instrument was a mere agreement. (Perring v. Brook, 7 Car. & Pay. 360). An agreement to demise an unfinished house, for all the lessor's interest therein, at a specified rent, and with a stipulation for a future lease, with specified covenants, the tenant being to have the benefit of an existing insurance, was held to be a present demise. (Doe d. Pearson v. Ries, 8 Bing. 178; S. C., 1 Moo. & Scott, 259). But as the agreement in this case was for a demise of the whole interest, it seems to have been, in fact, an agreement for an assignment, and ought to have been held to have been an executory agreement, to be carried into effect by a deed of assignment, containing the necessary covenants, and a power of re-entry for the assignor. (See Palmer v. Edwards, 1 Doug. 187;

AGREEMENT

Doe d. Freeman v. Bateman, 2 B. & Ald. 168). And where A., a lessee for years, agreed to assign to B., on payment of a sum of money, FOR A LEASE. to hold at the rent and under the covenants and provisoes in the original lease, and a stipulation that in the meantime, until the assignment, B. should perform the covenants in the lease, and save A. harmless, it was held that the instrument was an agreement for an assignment, as the assignment was not to receive its effect (as in many cases) in consideration of a promised payment, but from actual payment and performance of the covenants in the meantime. (Hartshorne v. Watson, 5 Bing. N. C. 477). The observation, however, of Tindal, C. J., in this case, that" if the instrument had been intended to operate as an immediate assignment, the stipulation for keeping the assignor harmless by the performance of the covenants in the lease would have been unnecessary, for after the assignment the assignor would no longer have been liable to those covenants," appears to be incorrect, for all formal assignments contain a covenant to the same effect. (See ante, Vol. III. p. 338, n (h).) An agreement that A. shall let, and B. shall take, and on demand execute a lease and counterpart respectively, with stipulations inferring an immediate possession, was held to be a present demise. (Walker v. Groves, 15 East, 244). An agreement to let and take a farm on the lessor being satisfied as to the lessee's character, with a clause providing for the preparation of a lease, is an actual demise as soon as the condition as to character is satisfied. (Chapman v. Bluck, 4 Bing. N. C. 187). And it seems that if a valuation be a condition precedent to the lessee's taking possession, and the lessee (no such valuation having been made) pay a sum of money towards it, and be let into possession, he will be held to be in under the demise. (Id.) But it should be observed, that, in this case, subsequent transactions had occurred to shew that the parties had acted as actual landlord and tenant. And where, after words of actual demise, there was a provision that the rent was to be settled by a valuation, and to be secured by two sureties for the rent; and no valuation was made, and no sureties given, it was held that there was no actual demise. (John v. Jenkins, 1 Cro. & Mee. 227; S. C. 3 Tyr. 170). In this case it may be observed, that, at the date of the agreement, there was a prior subsisting tenancy between the parties; but after the agreement, the tenant, instead of continuing to hold, quitted the property and removed his goods. In the case of Alderman v. Neate, 4 Mee. & Wels. 704, an agreement to let, with a stipulation for a future lease and counterpart, to contain "covenants and agreements pursuant to the contract, and such other general clauses as are usually contained in leases," with an option for the lessee, instead of taking a lease, to purchase in fee, was held to operate as a demise. And where a person, being in possession as a yearly tenant, entered into a written agreement with his landlord, in the middle of a current half-year, to take the property for a term of fourteen years, a lease to be drawn up on the usual terms," it was held

66

ARREEMENT

that the new agreement operated as a demise, although the effect of FOR A LEASE. it might be to cause a surrender of the previous term, and to merge the rent accruing due for the current half-year. (Doe d. Philip v. Benjamin, 1 Per. & Dav. 440).

Cases in which instruments containing no reference to a future lease do not operate as demises.

It remains to notice the cases in which instruments have been held not to operate as demises, although containing no reference to a future lease. An instrument cannot be held to be a lease, if it appear on the face of it that the intended lessor had not, at the time the agreement was executed, power to grant a lease. Thus, where the property was copyhold, and the agreement contained a stipulation that the intended lessor should procure a license for the lease, it was held that there was no present demise. (Doe d. Coore v. Clare, 2 T. R. 739). The reason, however, assigned by Lord Kenyon in this case was, that if the instrument were held to be a lease, a forfeiture would be incurred, which would be contrary to the intent of the parties. But in a recent case, in which the intended lessor agreed to grant the lease (an under-lease) as soon as he should have obtained his own lease, it was considered clear, on the general principle, that there could be no present demise. (Hayward v. Hassell, 1 Nev. & Per. 411). So a lease of copyhold for one year, or three years, as the custom allows, with a covenant for constant renewal during a longer term, and that, till the new leases are executed, the lessee may hold and enjoy, does not constitute a lease, because of the forfeiture it would occasion. (Montague's case, Cro. Jac. 301; Fenny d. Eastham v. Child, 2 Mau. & Sel. 255). An instrument purporting to be a letting for the tenant's life, cannot be a lease, because such an interest, being freehold, cannot pass by an instrument not under seal. Such an instrument will therefore, it seems, be held to be an executory agreement. (Stone v. Rogers, 2 Mee. & Wels. 443). If too the terms be indefinite, it seems that perhaps a lease for life may be decreed by a court of equity. (Browne v. Warner, 14 Ves. 156; Doe d. Warner v. Browne, 8 East, 165).

If the time when the tenancy is to commence, or the rent to become due, be not fixed by the instrument, it cannot operate as an actual demise. (Dunk v. Hunter, 5 B. & Ald. 322). So, too, if the instrument do not fix the commencement and duration of the tenancy, there is no demise. (Clayton v. Burtenshaw, 5 B. & C. 41 ; S. C. 7 Dowl. & Ry. 800). The expression, however, "does this day agree to let," will be construed to mean that the tenancy shall commence, and the rent become payable, from the date of the agreement. (Staniforth v. Fox, 7 Bing. 590; S. C. 5 Moo. & Pay. 589; see supra, p. 5). In Dunk v. Hunter, ubi supra, it was considered that a stipulation relative to the introduction of a clause for purchasing, shewed that the letting was to be by a particular instrument containing such a clause. (See, too, Doe d. Bromfield v. Smith, supra, p. 5). But it may be doubted whether such a stipulation alone would prevent an instrument from operating as a demise. (Alderman v. Neate, 4 Mee. & Wels. 704).

AGREEMENT

FOR A LEASE. Principles on which agree

ments for leases

should be fram

An agreement to demise by indenture, upon certain terms, without any reference to a present holding, is merely an agreement, for there can be no demise till the instrument is executed. (Hegan v. Johnson, 2 Taunt. 148). And this is the only principle on which agreements for leases can be safely drawn. But it must be observed, that a stipulation in such an agreement, that until the execution of ed. the lease the tenant shall hold on the terms of the lease, will make the instrument operate as a demise. (Pinero v. Judson, 6 Bing. 206; Wilson v. Chisholm, 4 Car. & Pay. 474; see supra, p. 6; see, too, Doe d. Warner v. Browne, 8 East, 165; Browne v. Warner, 14 Ves. 156). But the effect of such a stipulation may, it seems, be qualified by the last stipulation in the text. (Perring v. Brook, 7 Car. & Pay. 360). Where, in an agreement under seal, the lessor covenanted to grant a lease by indenture, when the tenant should have paid a sum of money, payable by instalments in three years, and the tenant was to have immediate possession, and covenanted to pay a fixed rent till the lease was granted; and that if the rent were in arrear, the landlord might enter and distrain; and the landlord did distrain for rent in arrear:-It was held, that whether there was or was not an actual demise, the relation of landlord and tenant had been created, at least as against the landlord. (Hancock v. Caffyn, S. C. 1 Moo. & Scott, 521).

Bing. 358;

Where, however, there was an agreement to grant a lease upon certain specified terms, but there were no words in the agreement which could create an immediate tenancy, except a stipulation "that until such lease shall have been granted as aforesaid, it shall be lawful for the said [intended lessor,] his executors, administrators, and assigns, to distrain for all or any part of the rent which may become due from the said [intended lessee], his executors, administrators, or assigns, in respect of the said premises, hereby agreed to be demised at any time after the execution of this agreement:"-It was held, that this stipulation did not make the instrument operate as a demise, for if there was an actual demise, there was no occasion for a special power of distress. (Bicknell v. Hood, 5 Mee. & Wels. 104).

In Doe d. Coore v. Clare, 2 T. R. 739, and supra, p. 8, Lord Effect of stamp. Kenyon assigned as a reason for holding the instrument in question to be an agreement, that it was stamped as such, and not as a lease; but there can be no doubt that this view of the matter was altogether erroneous, and that the court will first decide what the instrument is, and then see if it is rightly stamped. See several of the cases cited in this note, particularly Doe d. Walker v. Groves, 15 East, 244.

of the agreement.

So, too, the form of the agreement is not of much consequence, As to the form and it is not material whether it be under seal or not. (Hancock v. Caffyn, 8 Bing. 358; 1 Moo. & Scott, 521; supra; Tempest v. Rawlings, 13 East, 18, supra, p. 5). A lease may be constituted by letters. (Chapman v. Bluck, 4 Bing. N. C. 187).

AGREEMENT

FOR A LEASE. Construction guided by subsequent acts.

Inexpediency of agreements for leases.

Nature of tenancy under an agreement.

The subsequent acts of the parties may be of consequence in conStruing an instrument. (See Hancock v. Caffyn, 8 Bing. 358; S. C. 1 Moo. & Scott, 521; Knight v. Benett, 3 Bing. 361; Cox v. Bent, 2 Bing. 185; Regnart v. Porter, 7 Bing. 451, and several of the cases previously cited).

In conclusion, it is to be observed, that when an immediate possession is intended, no lawyer ought ever to recommend an agreement for a lease, or to prepare such an instrument, without protesting against it. An agreement should never be made the substitute for a lease, it ought only to be used where a building is to be erected or repaired, or some other act done before the lease is to be granted. The precedent in the text is given only because parties often insist on an agreement in preference to a lease, in order to save expense; and when such is the case, the practitioner must follow a form like that in the text, as the only means of preventing the instrument from being held to be a demise. Perhaps a power of distress may be added. (See Bicknell v. Moore, supra, p. 9).

Independently of the risk of litigation, which parties incur by entering into agreements for leases, the situation of both parties is much less favourable than under a lease. For the tenant, having no legal interest, is liable to ejectment at law, at the will of the landlord, and can only remedy the injury by a suit in equity. The landlord cannot distrain for his rent, but is driven to bring an action for use and occupation. (Hegan v. Johnson, 2 Taunt. 148; Dunk v. Hunter, 5 B. & Ald. 322; Warman v. Faithfull, 5 B. & Ad. 1042; and many of the cases previously cited). After, however, rent has been paid, a tenancy from year to year is constituted at the rent and upon the terms stated in the agreement, and therefore the landlord may then distrain for rent and may bring an action for a breach of the stipulations contained in the agreement. (Knight v. Benett, 3 Bing. 368; Cox v. Bent, 5 Bing. 185; Tempest v. Rawlings, 13 East, 18).