January 24, 2016

Albert M. Greenfield and Co. v. Kolea - 475 Pa. 351, 380 A.2d 758 (1976) - Supreme Court of Pennsylvania

FACTS: D executed a lease to the P for property which had a garage which the P wanted to use to store cars in.  There were 2 leases signed: 1) "all that certain one story garage blding. and known as 5735-37 Wayne Ave.... to be used and occupied as storage of automobiles"  2) "all those... 5721-33 Wayne Ave.... to be used and occupied for the sale and storage of cars"  After P had the premises for 1 year a fire destroyed the building.

HISTORY: Trial court awarded P $7200.  Appellants motions for judgment n.o.v., arrest of judgment and new trial were denied.  Superior Court affirmed.

ISSUE: Is t liable to pay rent if the property he was renting is destroyed before the end of the contract?

HOLDING: Yes

RATIONALE: the old rule was the T was not relieved from his duty to pay rent.  REason was that an interest still remained in the soil.

2 exceptions:

1) where only a portion of the building is leased but there is total destruction of the building

2) doctrine of impossibility of performance: destruction of property that makes it impossible to meet contractual obligations

The T's lease did not convey any interest in the land but it is obvious that the purpose was frustrated.  The trial court erred in applying an old law from a society which was agriculturally based.  Today buildings are what are valuable.

DISPOSITION: Reversed Superior court order.  Remanded to trial court w/ instructions to grant appellants motion for judgment n.o.v..