Crechale & Polles, Inc. v. Smith, Supreme Court of MS (1974)
Author: Bram

Parties: PL - Appellant - Chrechale - wants DF to pay 5 years rent as a holdover tenant

DF - Appellee - paid his rent on a monthly basis after the lease term, thereby creating a tenancy at will.

Cause of action/remedy sought: The following is an equitable action for specific performance

Procedural History: Trial court awarded complainant damages and pay rent for a leasehold premises, in addition to attorney's fees.  PL brought this suit to increase the judgment against DF.  This court affirms the trial court.

Facts: 2-5-64 PL enters into lease agreement with Smith for five years, from 2-7-64 through 2-6-69 (lease was up at this time).

12-68 or 1-69 alleged conversation -Smith meets with PL and attempts to extend the lease on a month to month basis until his new building is ready. PL states he told DF no. DF maintains he verbally OK'd a month to month, but refused to sign an agreement from DF's attorney.

2-4-69 DF send letter to PL, confirming the oral agreement-tenant sends letter of confirmation of agreement

2-6-69 PL sends letter telling DF to quit the premises, or face double rent as a holdover - LL orders tenant to quit the premises

3-3-69 DF pays his monthly rent, which PL accepts and cashes- T handed over check which LL accepted

4-6-69 DF sends PL check marked final payment, which PL does not accept- T tendered ck for March/April, LL rejected

4-7-69 DF sends PL telegram that he is tendering the premises for the purpose of the lessor's inventory, noting that PL had refused to do so by phone earlier that day- T sends telegram tendering premises

4-19-69 P's attorney rights to DF, stating that due to the holdover, they are considering this a renewal of the lease for 5 more years, ending 2-6-74- LL's atty sends letter asserting another term

4-24-69 DF's check again rejected by PL - T tenders a ck which LL rejects

4-29-69 another letter from PL attorney that the holdover was a renewal- LL attorney seeks lease

5-15-70 letter from LL to tenant for the past due rent

5-27-70 DF attorney tendered the keys to PL.

Issue(s): Under MS property law, did the holdover create a renewal of the lease when PL cashed the first rent check appellee sent in to him?

Holding: Yes.  Acts as such manifested an acceptance of the month to month agreement.

Court's Rationale/Reasoning:  PL was not responsible for the rent as a holdover tenant. When DF remained in the premises after the lease expired, PL had a choice to treat him as either a trespasser and evict him, or treat him as a tenant. After having elected not to accept DF as tenants, PL can not at a later date, after failing to pursue his remedy of eviction, change his election and hold them for a new term. His election once exercised is binding on the tenant and the landlord.

Possible effects: Landlords will be bound by their first election in dealing with tenants who remain after their lease expires.

Rule: Once a landlord elects to treat a tenant as a trespasser and refuses to extend a lease on a month to month basis, fails to pursue his remedy of ejecting the tenant, and accepts monthly checks for rent due, he in effect agrees to the extension of the lease on a month to month basis.  Had one of two options: eviction or acceptance & create new tenancy.

Did court avoid issues?: Doesn't the landlord have a duty to release the property to minimize his losses.

Dicta: No.