Stewart v. Childs Co.
86 N.J.L. 648 (1914)
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Rule of Law:
A landlord's breach of a covenant in a lease, such as failing to keep a cellar waterproof, does not constitute a constructive eviction that justifies a tenant's non-payment of rent unless the landlord's action is of a grave and permanent character done with the specific intent to deprive the tenant of the enjoyment of the premises.
Facts:
- A landlord and tenant entered into a 20-year commercial lease for a property intended to be used as a restaurant.
- The lease contained a covenant in which the landlord guaranteed to keep the basement waterproof at his own expense throughout the lease term.
- Shortly after the tenant opened for business, water began to accumulate in the basement, sometimes reaching depths of two to three feet.
- The water intrusion was wholly due to the fact that the basement walls and foundations were not waterproof, as the landlord had guaranteed.
- The tenant required the use of the basement for its business operations, including storage and housing for its coffee-making apparatus.
- After several years of dealing with the persistent water issue, including periods of moving out and subletting, the tenant permanently abandoned the premises in 1909.
Procedural Posture:
- The landlord (plaintiff) initiated a suit in the Hudson Circuit Court (a trial court) against the tenant (defendant) to recover unpaid rent due under a written lease.
- At trial, the tenant defended by arguing that the landlord's failure to keep the cellar waterproof constituted a constructive eviction, relieving them of the duty to pay rent.
- The trial judge ruled that the landlord's breach of covenant was not a valid defense for non-payment of rent and directed a verdict for the plaintiff in the amount of $4,350.
- The defendant (appellant) appealed the trial court's judgment to this court, alleging the trial judge's ruling was an error of law.
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Issue:
Does a landlord's passive failure to fulfill a covenant to keep a cellar waterproof, which interferes with the tenant's business, constitute a constructive eviction that relieves the tenant of the obligation to pay rent after abandoning the property?
Opinions:
Majority - Black, J.
No, a landlord's passive failure to fulfill a covenant to keep a cellar waterproof does not constitute a constructive eviction. A constructive eviction requires more than a mere breach of a promise; it must be an act of a 'grave and permanent character done by the landlord with the intention of depriving the tenant of the enjoyment of the demised premises.' The court found no evidence that the landlord acted with such intent. The water in the cellar resulted from the landlord's failure to ensure the walls were waterproof, which is a breach of covenant, but not an intentional act to oust the tenant. Therefore, the tenant's covenant to pay rent and the landlord's covenant to maintain the cellar are independent, and the tenant's remedy is to sue for damages for the breach, not to withhold rent as a defense.
Analysis:
This decision reinforces the traditional common law doctrine that lease covenants are independent, meaning a breach by one party does not excuse performance by the other. It sets a high bar for tenants claiming constructive eviction by requiring proof of the landlord's specific intent to interfere with the tenant's enjoyment, not just a failure to perform a duty. This makes it more difficult for tenants to abandon a property and cease rent payments due to a landlord's failure to repair, pushing them instead toward suing for damages while continuing to pay rent.
