Front Page Titles (by Subject) § 157.: Statutory liability of lessors for the acts of lessees.— - A Treatise on State and Federal Control of Persons and Property in the United States considered from both a Civil and Criminal Standpoint, vol. 2
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§ 157.: Statutory liability of lessors for the acts of lessees.— - Christopher G. Tiedeman, A Treatise on State and Federal Control of Persons and Property in the United States considered from both a Civil and Criminal Standpoint, vol. 2 
A Treatise on State and Federal Control of Persons and Property in the United States considered from both a Civil and Criminal Standpoint (St. Louis: The F.H. Thomas Law Book Co., 1900). Vol. 2.
Part of: A Treatise on State and Federal Control of Persons and Property in the United States considered from both a Civil and Criminal Standpoint, 2 vols.
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Statutory liability of lessors for the acts of lessees.—
Independently of statute, the lessor is not in any manner responsible for the wrongful acts of his lessee. The owner of an estate for years in lands is, during the continuance of the tenancy, as independent an owner, so far as the liability to the State or to the individual is concerned, as the tenant in fee. Certain uses of lands may be prohibited, because of their injurious effect upon the person or property of others, and the doing of such acts at once becomes unlawful. The State may punish the wrongdoer by the imposition of penalties or otherwise, and the individual who has suffered damage in consequence of the wrongful act, may recover damages of him in the proper action.
It is often a difficult matter to secure the enforcement of a public regulation, particularly if it concerns the manner of using premises, which does not involve a direct trespass upon the rights of others. Inasmuch as the proprietor of lands is only a tenant of the State, the terms and conditions of whose tenancy may be so regulated as that the public good may not suffer, the State may impose upon the landlord the duty of securing the enforcement of the law in respect to the prohibited use of the premises, by imposing on him a penalty for leasing his lands with the intent or knowledge that the premises will be used for unlawful purposes; and the State may also provide it to be his duty, as well as right, to enter upon the land for the purpose of forfeiting the lease, whenever it comes to his knowledge that the lessee is making an unlawful use of the premises. The performance of this police duty may become very burdensome, but the constitutionality of the law which imposes it cannot be questioned. Thus it has been held to be reasonable to impose a penalty on the owner of a house for permitting his house to be used for prostitution.1 But while the State may impose this police duty upon the lessor to prevent the lessee from making an unlawful use of the premises, he can only be required to exercise reasonable care in the performance of the duty; and his responsibility under such statutes is confined to those cases in which he has actual knowledge of the wrongful use of the property.1 It is furthermore true, that the State cannot, in imposing this police duty, as was done in one case by the New York legislature, declare the lessor to be responsible to third persons who may have been damaged by the unlawful use of the premises. The New York statute, just referred to, created a cause of action for damages, in favor of the person or property which was damaged by the act of an intoxicated person, against the owner of real property, whose only connection with the injury is that he leased the premises where the liquor causing the intoxication was sold or given away, with the knowledge that intoxicating liquors were to be sold thereon. The act was declared by the New York Court of Appeals to be constitutional,2 but we hope to show that it was an amazing, and altogether unconstitutional, interference with civil liberty and private property. The language of the court indicates that they appreciated the practical scope and effect of the statute, and it will be profitable for the reader to quote from the opinion of the court, in describing the character of this piece of legislation. The court say: “To realize the full force of this inquiry it is to be observed that the leasing of premises to be used as a place for the sale of liquors is a lawful act, not prohibited by this or any other statute. The liability of the landlord is not made to depend upon the nature of the act of the tenant, but exists irrespective of the fact whether the sale or giving away of the liquor was lawful or unlawful, that is, whether it was authorized by the license law of the State, or was made in violation of that law. Nor does the liability depend upon any question of negligence of the landlord in the selection of the tenant, or of the tenant in selling the liquor. Although the person to whom the liquor is sold is at the time apparently a man of sober habits, and, so far as the vendor knows, one whose appetite for strong drink is habitually controlled by his reason and judgment, yet if it turns out that the liquor sold causes or contributes to the intoxication of the person to whom the sale or gift is made, under the influence of which he commits an injury to person or property, the seller and his landlord are by the act made jointly and severally responsible. The element of care or diligence on the part of the seller or landlord does not enter into the question of liability. The statute imposes upon the dealer and the landlord the risk of any injury which may be caused by the traffic. It cannot be denied that the liability sought to be imposed by the act is of a very sweeping character, and may in many cases entail severe pecuniary liability; and its language may include cases not within the real purpose of the enactment. The owner of a building who lets it to be occupied for the sale of general merchandise, including wines and liquors, may under the act be made liable for the acts of an intoxicated person, where his only fault is that he leased the premises for a general business, including the sale of intoxicating liquors, in the same way as other merchandise. The liability is not restricted to the results of intoxication from liquors sold or given away to be drunk on the premises of the seller. There is no way by which the owner of real property can escape possible liability for the results of intoxication, where he leases or permits the occupation of his premises, with the knowledge that the business of the sale of liquors is to be carried on upon the premises, whether alone or in connection with other merchandise, or whether they are to be sold to be drunk on the premises or to be carried away and used elsewhere.” In declaring the act to be constitutional, the court continue: “There are two general grounds upon which the act in question is claimed to be unconstitutional; first, that it operates to restrain the lawful use of real property by the owner, inasmuch as it attaches to the particular use a liability, which substantially amounts to prohibition of such use, and as to the seller, imposes a pecuniary responsibility, which interferes with the traffic in intoxicating liquors, although the business is authorized by law; and, secondly, that it creates a right of action unknown to the common law and subjects the property of one person to be taken in satisfaction of injuries sustained by another, remotely resulting from an act of the person charged, which act may be neither negligent nor wrongful, but may be in all respects in conformity with the law. * * * The right of the State to regulate the traffic in intoxicating liquors, within its limits, has been exercised from the foundation of the government, and is not open to question. The State may prescribe the persons by whom and the conditions under which the traffic may be carried on. It may impose upon those who act under its license such liabilities and penalties as in its judgment are proper to secure society against the dangers of the traffic and individuals against injuries committed by intoxicated persons under the influence of or resulting from their intoxication. * * * It is quite evident that the act of 1873 may seriously interfere with the profitable use of real property by the owner. This is especially true with respect to a building erected to be occupied as an inn or hotel, and especially adapted to that use, where the rental value may largely depend upon the right of the tenant to sell intoxicating liquors. The owner of such a building may well hesitate to lease his property when by so doing he subjects himself to the onerous liability imposed by the act. The act in this way indirectly operates to restrain the absolute freedom of the owner in the use of his property, and may justly be said to impair its value. But this is not a taking of his property within the constitution. He is not deprived either of the title or the possession. The use of his property for any other lawful purpose is unrestricted, and he may let or use it as a place for the sale of liquors, subject to the liability which the act imposes. The objection we are now considering would apply with greater force to a statute prohibiting, under any circumstances, the traffic in intoxicating liquors, and as such a statute must be conceded to be within the legislative power, and would not interfere with any vested rights of the owner of real property, although absolutely preventing the particular use, a fortiori the act in question does not operate as an unlawful restraint upon the use of property. * * * The act of 1873 is not invalid because it creates a right of action and imposes a liability not known to the common law. There is no such limit to legislative power. The legislature may alter or repeal the common law. It may create new offenses, enlarge the scope of civil remedies, and fasten responsibility for injuries upon persons against whom the common law gives no remedy. We do not mean that the legislature may impose on one man the liability for an injury suffered by another, with which he has no connection. But it may change the rule of the common law which looks only to the proximate cause of the mischief, in attaching legal responsibility, and allow a recovery to be had against those whose acts contributed, although remotely, to produce it. This is what the legislature has done in the act of 1873. That there is or may be a relation in the nature of cause and effect, between the act of selling or giving away intoxicating liquors, and the injuries for which a remedy is given, is apparent, and upon this relation the legislature has proceeded in enacting the law in question. It is an extension by the legislature of the principle, expressed in the maxim sic utere tuo ut alienum non lædas to cases to which it has not before been applied, and the propriety of such an application is a legislative and not a judicial question.”1
Conceding that the sale of intoxicating liquors may be prohibited altogether, or subjected to whatever other police regulations the legislature may see fit to impose, and this we do not admit to be true, without most material qualifications,2 the claim is still made that this kind of legislation is unconstitutional. The State may impose upon the lessor the police duty of preventing, as far as it lies in his power, the lessee from making an unlawful use of the premises, and may impose upon him penalties for his failure to eject the lessee. This is a legitimate police regulation. It is simply compelling the owner of property to perform a duty to the public which no one can do so well as he; and he cannot complain if the profits of his property have been diminished by the regulation. Neither he nor his lessee has an indefeasible right to make use of his property in a way to injure another in person or property. And he as well as the lessee can be made to respond in damages to any one who has suffered injury by and through his unlawful act. But in order that any one may recover damages of another, he must show that the damages were caused by the wrongful act. It is only on such a showing that any one can maintain a suit for damages. It is not a subject for police regulation to determine what is the cause of the damage. It is a judicial question of fact, to be determined in a judicial inquiry, free from any control on the part of the legislature. The legislature cannot determine when the legal relation of cause and effect exists between two facts. It will probably be granted that in one sense the relation of cause and effect exists between any two facts that may be selected. In organized society the lives of men are so intimately bound up with each other, there is so much influence and counter influence, that it is difficult to say whether anything now known would have happened, if some antecedent fact had not occurred, it matters not how remote. To apply the reasoning to the facts of the case in question, for the purpose of easier illustration, if the lessor had done his duty to the public in preventing an unlawful use of the premises, the injury to the third person would not have occurred through this intoxication, but likewise the injury would not have happened, if the lessee had not broken the law in making the prohibited use of the land. Nay, further, the joint wrongful acts of the lessor and lessee would not have caused the injury, if the purchaser had not been guilty of the vice, and, under the peculiar circumstances of the present case, the crime, of intoxication. Here are three unlawful acts, following each other in the order of sequence, followed by an injury to a third person. The common-law rule, which made the proximate cause responsible for the damage, to the exclusion of the remote cause, would have declared the intoxicated person to be alone responsible. Indeed, when one considers the fact that the same damage could have been caused as easily by an intoxication produced by liquor bought from some other dealer, within or without the State in which the sale of it is prohibited or regulated, and as easily, whether the lessor did or did not know of the sale of the liquor by his lessee; when it is still further considered that in the New York case there would have been no violation of law, had no injury been inflicted on another by the intoxicated person, the conclusion becomes irresistible that the damage was not caused by the wrongful act of the lessor or the lessee. The New York court holds that the legislature “may change the rule of the common law, which looks only to the proximate cause of the mischief, in attaching legal responsibility and allow a recovery to be had against those whose acts contribute, although remotely, to produce it.” If this rule of the common law was itself a police regulation, it would of course be subject to legislative change; but it has been established by the accumulated experience of ages as the best rule for the ascertainment of the cause of a damage, and is no more subject to legislative change than is the law of gravitation.1 This subject, and the facts of this particular case,2 has been given this extended consideration, because it was an extraordinary exercise of police power, and furnished a most striking example of the great uncertainty that now prevails in the legal minds of this country, concerning the constitutional limitations upon the police power of the government.
McAlister v. Clark, 33 Conn. 91; People v. Erwin, 4 Den. (N. Y.) 129; Territory v. Dakota, 2 Dak. 155.
State v. Frazier, 79 Me. 95; State v. Smith, 15 R. I. 24; People v. O’Melia, 67 Hun, 653; Troutman v. State, 49 N. J. L. 33; Hornsby v. Raggett (1892), 1 Q. B. 20; Fisher v. State, 2 Ind. App. 365; Borches v. State, 31 Tex. Cr. 517; Swaggart v. Territory (Okl. 1898), 50 P. 96.
Bertholf v. O’Reilly, 74 N. Y. 509 (30 Am. Rep. 323). Somewhat similar to the New York statute, which is so fully discussed in the text, but not so important, is the Ohio statute, which creates, in favor of the government, a lien upon the real estate, to secure the payment of the liquor license. Anderson v. Brewster, 44 Ohio St. 576.
Bertholf v. O’Reilly, 74 N. Y. 524 (30 Am. Rep. 323).
For a discussion of limitation upon the power of the government to prohibit the sale of intoxicating liquors, see ante, § 125.
See ante, § 60, for a further and more general discussion of this question of remote and proximate cause.
Bertholf v. O’Reilly, supra.