ceedings involved here were instituted.

The trial court filed an opinion holding that, while inferable Pond "was given an interest in the lease," he was not shown to be an assignee of the lease, and under the facts stipulated his joint occupation of the premises with Ische Brothers, as a partner for conduct of the business carried on there, did not render his guilty of unlawful possession of the premises. Plaintiff's right to review was preserved by requests, objections, and exceptions timely made.

The question involved and argued by counsel is whether taking Pond into partnership, selling him an interest in the stock with a proportionate share in the profits, and committing to him management of the business then being conducted on the leased premises with the other members of the firm yet acting in an advisory capacity, violated the covenant in the lease against assigning or transferring the same or subletting the premises, or any part thereof, without written consent of the lessor.

Appellant's contention is squarely planted in the brief of his counsel, upon the proposition that "taking in a partner to a lease violates the covenant against assignment," which it is asserted all authority holds, that whether it violates a covenant against subletting is not involved, and cases cited to that point do not apply; while counsel for defendant insists the adjudicated cases hold that, under a similar covenant to that found in the lease under consideration, taking a partner into a business or trading firm, as done here, does not violate a covenant against either assigning or subletting.

In approaching the subject we are confronted with the general rule that forfeitures are not favored in law, especially when they devest estates, and restrictions in leases against assignments or subleases, as also other conditions in contracts providing for disabilities and for

183 N. W. 24.)

feitures, are to be given a strict construction against those for whose benefit they are introduced, when of questionable import or in any wise open to construction. Upon that point, and for illustration covering the question before us, it is said in White v. Huber Drug Company, 190 Mich. 212, 157 N. W. 60: "It has been said, however, that covenants against assignment or underletting are not favorably regarded by the courts, and are liberally construed in favor of the lessees. But this means only that the scope of the term 'assignment' will not be enlarged by the courts, and that the covenant will not be considered as violated by any technical transfer that is not fairly and substantially an assignment, as where a tenant, without license from his landlord, takes a third party into partnership and lets such party into joint possession with him."

Counsel for plaintiff urge that this recognition of the rule defendant contends for was irrelevant to the issue in that case, and mere dictum, necessarily no stronger than Roosevelt v. Hopkins, 33 N. Y. 81, cited as authority for the doctrine, which, it is argued, does not go that far, but was decided on the ground that the prohibition against assignment was not intended to interdict transactions between partners.

In the White Case the charged violation of a restriction in the lease under consideration was an assignment by one corporation to another, and it may be conceded what was said as to partners was only illustrative. It is, however, the interpretation of the Roosevelt Case, sustained by recognized authority as follows:

"Where the lessee is a firm, a mere change in the partners which compose it, or the taking in of a new partner, is not a breach of a condition against an assignment. Nor is such conduct on the part of the lessee a subletting." Underhill, Land. & T. p. 1050.

"The covenant [not to assign] is not broken by associating others

with the lessee in the enjoyment of the term; as by changing the membership of a firm." McAdam, Land. & T. 3d ed. p. 500.

"A condition against subletting or assignment is not broken where the tenant takes another into partnership with him and lets such person into joint possession of the premises. Nor is such a condition in a lease to a partnership broken by a change in the firm by the admission or withdrawal of partners, or by a dissolution of the firm and a transfer of the possession to one of the partners. But the organization of a corporation by the partnership and a transfer of the lease to such corporation is a breach." 24 Cyc. 969.

We think it may fairly be said from an examination of the decisions touching this question in other jurisdictions, both English and American, that the authorities are not entirely harmonious upon the subject, and cases are to be found on either side of the question. Conceding what was said in the White Case to be dictum, it may be noted in passing that, so far as this court has touched the question, it favored the view that taking in a partner does not in itself violate a condition against assigning a lease. In Tiffany on Landlord and Tenant, p. 925, the subject is discussed with citation of authorities, and it is said in part: "Upon the question whether a stipulation against an assignment or sublease of the premises precludes an assignment or sublease of part of the premises, or an assignment of an undivided interest therein, the cases, though few in number, are not in harmony."

It is unquestioned that the assigning of a lessee's entire interest in a lease to a partner or to others will work a forfeiture. In such cases the lessee is no longer interested in the premises, and seeks to put in possession a new tenant to attorn to the landlord. Here the old members of the firm did not, by any written instrument of demise, assign the lease or withdraw, but remained in the same business, conducted in the

same firm name as before, only with a new firm partner in joint occupation, for conduct of the business. No direct demise or even mention was made of the lease in that connection, and only by implication from the fact that defendant had purchased an interest in the business and become a partner in the firm can an assignment of any interest in the lease be claimed. Defendant was undoubtedly interested in the lease so far as it related to being maintained for the business conducted on the

tenant

premises leased, but Landlord and it does not follow assignment of that he became an partner. assignee of an in

lease-taking

terest in the lease, in violation of the wording of the prohibition against assigning. The provision of the prohibiting clause claimed to have been violated is that Ische Brothers "will not assign nor transfer this lease." By the disjunctive "or" they are further restricted from subletting "said premises, or any part thereof," which is not claimed to have been violated and which is in its essentials a distinct independent restriction, which plaintiff admits is not involved here.

By the strict construction applied in case of restrictions gainst demise, a prohibition against assigning a lease does not prohibit assigning any interest therein, which is all that is claimed here. In Roosevelt v. Hopkins, supra, the lessees were partners under the firm name of Hopkins & Crow. Their lease provided they should not "demise, sell, underlet, or assign over said premises to any person or persons whatsoever." Crow retired from the firm, and the business was afterwards conducted by a new firm styled Hopkins & Brothers, which sublet a part of the premises. The court there said: "They neither demised, sold, underlet, nor assigned the entire property embraced in the lease. lease. They were not prohibited from subletting portions of the premises; and the exercise of this

right, therefore, gave no cause of action to the plaintiff."

"An assignment of a lease is the transfer of a tenant's whole estate therein to some third person.

If the grantor conveys a shorter term or a less estate than he himself had in the premises, or if a lessee for life grants a term of years, provided the life should continue so long, this is not an assignment of the freehold, but only a grant of a term, and will in neither case amount to more than an underlease." Taylor, Land. & T. § 426.

"By the assignment the tenant parts with his entire interest, and a new tenant takes his place, with whom the landlord must deal as with his predecessor." Underhill, Underhill, Land. & T. p. 1052.

No such situation presented itself

here. If Ische Brothers parted with title to any interest in the lease, which is but an inference, they did not part with their entire interest in the leasehold estate which they held in the premises, nor in the business. conducted there. They yet were entitled to possession as tenants and bound to attorn to the landlord as before. No difference in the authorized kind of business, manner of conducting it, or care of the premises, is shown or claimed. The stipulated facts do not sustain plaintiff's technical claim of forfeiture for violating the covenant of the lease forbidding its assignment, when measured by the rule of strict construction applicable to breaches of conditions working forfeitures of leasehold estates.

The judgment is affirmed.

For assignment of lease as breach of covenant against subletting, see the annotation in 7 A.L.R. 249.

Taking partner.

There are but few cases in point. In the reported case (MILLER V. POND, ante, 179), where a lease ran to "Ische Brothers, Will C. Ische and Charles E. Ische, copartners," and they sold to a third party a two-thirds interest in their stock of goods, giving him a bill of sale, and took him into partnership with them, no mention being made of the lease, it is held that this was no breach of a provision in the lease that "said parties of the second part further covenant that they will not assign or transfer this lease," there being no assignment of the lease and no prohibition against assignment of an interest therein.

Perhaps the most frequently cited American case on this subject is Roosevelt v. Hopkins (1865) 33 N. Y. 81, referred to in the reported case (MILLER v. POND). The first headnote in the Roosevelt Case is as follows: "A provision in a lease

against subletting the demised property, without the consent of the lessor, does not apply to a mere change in the business firm of the lessees, incident to the admission of a new partner or the withdrawal of an old one." It appears from the report of the case that the lessor in a lease to Hopkins & Crow, a firm consisting of the two defendants, sued them for a breach of covenants in the lease; that the lease provided "that the said party of the second part should not, during the continuance of the term, demise, sell, underlet, or assign over the said premises to any person or persons whatsoever, or for any term or time whatsoever," etc.; that a clause prohibiting underletting any part of the premises had been stricken out before the lease was executed by the lessee; that "the firm of Hopkins & Crow, the second party. was dissolved in the early part of the term, the defendant Crow retiring from the firm, and business was afterwards conducted by a new firm styled Hopkins & Brothers. This new firm sublet the part of the

premises used in the business of Hopkins & Crow, but continued in possession of the residue." The court, in affirming a judgment for the defendants, said, inter alia; "The dissolution of the partnership of the defendants was not a breach of their covenant, and subjected them to no new liabilities to the plaintiff (Hoffman v. Ætna F. Ins. Co. (1865) 32 N. Y. 405, 88 Am. Dec. 337). They neither demised, sold, underlet, nor assigned the entire property embraced in the lease. They were not prohibited from subletting portions of the premises; and the exercise of this right, therefore, gave no cause of action to the plaintiff." It appears from a copy of the printed appeal papers in the case that the original lease was to "Hopkins & Crow," which was a firm composed of Francis Hopkins and James N. Crow (the two defendants); that on its dissolution said Hopkins became the owner of Crow's estate and interest in the lease; that the subletting referred to in the report as by the new firm was done, not by the new firm, but by Francis Hopkins, and was of a part of the part of the premises used by the old firm; that the new firm was in existence before the dissolution of the old one, and consisted of said Francis, and of John and Frederick Hopkins; and that the complaint of the plaintiff was dismissed. The plaintiff, in his "Points" in the court of appeals, states that the new firm took the premises by agreement between the old and new firm, but there seems to be no foundation in the papers for this statement. The earlier papers do not indicate any contest by reason of the change in the firm, but the plaintiff's said "Points" made the above statement of fact, and also argued that "the dissolution of the partnership of the defendants, and transfer by them to the new firm of Hopkins & Brothers of the lease, being entirely voluntary, was a breach of the covenant not to assign the lease, and made them liable for damages." (The Hoffman Case cited by the court as aforesaid related to the construction of an insurance policy.)

In Maloney v. Smith (1918) 16 Ala. App. 595, 80 So. 169, it was held that the taking of a partner is not a breach of a condition against subletting in a lease of the premises where the partnership business is carried on.

Where a lease from A to B, "and those whom he may associate with him for the purpose" of mining, contained a clause "the said B not to sell or assign this lease, under forfeiture of the same, without consulting said A," it was held that B would not incur a forfeiture by recognizing by conveyance his associates, on behalf of whom and himself he procured the lease, and that, therefore, a bill by them to require him to do so was not demurrable. Hargrave v. King (1848) 40 N. C. (5 Ired. Eq.) 430, 8 Mor. Min. Rep. 408.

In Boyd v. Fraternity Hall Asso. (1885) 16 Ill. App. 574, where a hotel was leased to husband and wife, and the husband, with the knowledge and implied assent of the wife, carried on a saloon business in one of the rooms, of which he had exclusive possession for that purpose, and later took in a partner in the business of keeping a saloon in such room, it was held that there was no breach of the provision in the lease that "it is further agreed by the party of the second part, that neither they nor their legal representatives will underlet said premises or any part thereof, or assign this lease."

But in Roe ex dem. Dingley v. Sales (1813) 1 Maule & S. 297, 105 Eng. Reprint, 111, the taking of a partner by a lessee, and agreeing that he should have the exclusive use of part of the premises and the joint use of the rest of them, was held to breach a provision in the lease for re-entry in case the lessee, his executors, etc., should demise, lease, grant, or let the said demised premises, or any part or parcel thereof, or convey, alien, assign, or set over the indenture or his or their estate therein, or any part thereof, to any person or persons whomsoever, for all or any part of the said term, etc.

Varley v. Coppard (1872) L. R. 7 C. P. (Eng.) 505, 26 L. T. N. S. 882, 20 Week. Rep. 972, herewith referred to,

seems to be taken as authority for the obiter statement in Emery v. Hill (1892) 67 N. H. 330, 39 Atl. 266, that if a lessee firm admits new members, and transfers to the new partnership their interest in the lease, the transaction would be an assignment of "the lease" or "an interest therein," within a restrictive covenant. But it appears from mems. on pp. 332 & 80 of 67 N. H. that this was in one of certain opinions, which, while approved by a member of the court, were prepared by someone else from the deceased chief justice's notes, etc., which were often brief.

In Blessing v. Fetters (1919) 40 Cal. App. 471, 181 Pac. 108, where it was held that there had been a waiver, a lessee of hotel premises, under a covenant not to assign the lease without the written consent of the landlord, took in a partner and assigned to him without the landlord's written consent a half interest in the lease and moneys deposited under its terms, and the court said: "Though the assignment of the half interest in the lease to banks and its use by the partnership were without the written consent of the landlord and in violation of the covenant in the lease, they did not create a forfeiture of the lease, especially after the landlord had accepted the rent with knowledge of the assignment."

While this annotation does not include the question whether or not a contract by the lessee with a third person, who is to have a share of the profits of the business conducted on the leased premises, makes the third person a partner, it may be permissible to refer to Boston Elev. R. Co. v. Grace & H. Co. (1901) 50 C. C. A. 239, 112 Fed. 279, where the lessee of premises, upon which it had, in the lease, agreed to erect and maintain a chute and other amusement structures, contracted with a thirdparty corporation to build a chute, agreeing that the said third party should have a lien upon the enterprise and its income, and exclusive possession until the amount owing to it under the contract was paid, whereupon it should have a one-third in

terest in the chute enterprise and its incidents. It was held that the third party was the agent of the lessee, which had not by the contract breached the provision in the lease against subletting, and that, upon the completion of the contract as to building and payment, so that the third party became equitably entitled to an assignment of one third of the lessee's interest in the enterprise and lease, there would be no breach of the aforesaid provision until there had been a delivery of such an assignment. It may be noted also, in this connection, that in Markowitz v. Greenwall Theatrical Circuit Co. (1903) - Tex. Civ. App. -, 75 S. W. 74, it was held that the employment by the lessee of an opera house, of a person as business manager of the opera house during the term of the lease, and an agreement to pay him a share of the profits, was not a subletting or an assignment, and not a transgression of a statutory prohibition against subletting without the landlord's consent. Assignment to a cotenant.

Perhaps the real explanation of the conflict in the cases is in general that some construe the restriction strictly against the lessor, and others do not.

The leading English authority on the point is Varley v. Coppard (Eng.) supra, where a lessee had, with the lessor's consent, assigned his estate in the premises to two persons who were partners in trade, and on the dissolution of the partnership one of the assignees assigned his estate and interest in the premises to the other without the lessor's consent. It was held that this second assignment was a breach of the provision in the original lease, that neither the lessee nor his assigns, etc., should assign the demised premises without the consent of the lessor. The court said: "The covenant, though it relates to the estate of the two, necessarily involves the interest of each; it means that neither of them shall assign the whole or any part of his interest without consent; otherwise, a tenant might assign all but a sixty-fourth part."

While in Bristol v. Westcott (1879)