
    LANDLORD AND TENANT — LIMITATIONS.
    [Lucas (6th) Court of Appeals,
    June 19, 1916.]
    Richards, Kinkade and Chittenden, JJ.
    Nasby Building Co. v. Walbridge Building Co.
    1. Lessor of Lease Forfeited for Nonpayment of Rent Waives No Right to Enforce Forfeiture by Foreclosure Proceedings or Receivership.
    Where a lease has been forfeited for nonpayment of rent, the • lessor does not waive his right to enforce the forfeiture by filing a cross-petition setting up his claims under a mortgage, nor by demanding judgment for accrued rent, nor by procuring the appointment of a receiver in the foreclosure action who collects the rents and holds them subject to the order of the court.
    2. Limitations not Applicable to Defenses not involving Set-off or Counterclaim.
    Statutes of limitation have no application to defenses not involving set-off or counterclaim.
    [Syllabus by the court.]
    Error.
    
      Howell, Roberts & Duncan and Geer $ Lame, for plaintiff in error.
    
      Tracy, Ghapmam & Welles, for defendant in error.
   RICHARDS, J.

In the court of common pleas the Equitable Life Assurance Society commenced an action for the foreclosure of a mortgage of one hundred and thirty-seven thousand dollars executed by the Walbridge Building Co. Among the defendants was a corporation known as the Nasby Building Co. which latter company had become the lessee of the premises involved, known as the Nasby Building in the city of Toledo, for a period of ninety-nine years from the first day of January, 1909. The Walbridge Building Co. filed a cross-petition setting up, among other things, that the lessee, the Nasby Building Co., had obligated itself to make the payments provided for in the mortgage already mentioned, and in addition had agreed to pay to the Walbridge Building Co. the sum of $13,000 by an unsecured obligation, and had agreed to pay also in installments certain rent for the premises. The Walbridge Building Co. further averred that the Nasby Building Co. was in default on making sundry of these payments upon the mortgage and on the rent, and was also in default in failing to make the payment of the $13,000 indebtedness. A receiver was appointed in the court of common pleas who took charge of and has been collecting the rent on-the premises. Thereafter the Walbridge Building Co. filed an amended and supplemental cross-petition making many of the same averments which were contained in its original cross-petition, and certain other averments in addition thereto showing that it was entitled to the possession of the premises in controversy, and praying that the lease and all the rights and interest of the Nasby Building Co. under the same be declared forfeited and possession awarded to the cross-petitioner. To this last pleading the Nasby Building Go. filed an answer admitting substantially all of the material averments contained in the amended and supplemental cross-petition, and denying other averments, and concluding its pleading by allegations of fraudulent representations on the part of the Walbridge Building Co. which induced the Nasby Building Co. to enter into the lease made in December, 1908. The Nasby Building Co. avers that by reason of these fraudulent representations it has been damaged in the sum of one hundred and twenty-five thousand dollars for which amount it asks a finding and judgment against the Walbridge Building Co.,

Numerous motions and demurrers were made and disposed-of in the court of common pleas and thereupon the Walbridge Building Co. moved for judgment in its favor against the Nasby Building Co. upon the pleadings, which motion was, on consideration, granted by the trial court and a judgment rendered excluding the Nasby Building Company from the possession of the real estate in controversy and awarding the same to the Walbridge Building Co. “free and clear of any and all claims of-said, the Nasby Building Co., on account of . any of the matters and things set forth in the pleadings heretofore filed herein.” To this judgment the Nasby Building. Company prosecutes error.

It is insisted that the judgment of the trial court is wrong for the reason that the Walbridge Building Co. having in its original cross-petition elected to demand payment of the rent which had accrued, and having procured the appointment of a receiver who had taken possession of the property, had thereby waived the right to insist on a forfeiture of the lease and to recover possession of the premises by reason of default in making the payments stipulated therein. We can not accede to this contention. This branch of the case is within the principles announced by Judge Hoadly in the ease of Campbell v. McElevey, 2 Dis. 574 (13 Dec. Re. 351), and does not fall within the terms of Owen v. Hickman, 2 Dis. 471 (13 Dec. Re. 289). The receiver is simply collecting the rent and holding the same subject to the order of the court.

Counsel further insist that the cross-petitioner is not entitled to recover the premises because of failure to make demand and give proper notice to justify a forfeiture of the lease. It is a sufficient answer to this contention that the lease itself waives these requirements, and those provisions we hold to be valid.

The most important question in this case is the one raised as to the application of the statute of limitations to the contention made by the Nasby Building Co. that the lease was induced by means of fraudulent representations of the Walbridge Building Co. Those representations, whatever they were, appear to have been made in December, 1908. The petition for the foreclosure of the mortgage in this ease was filed in April of 1915, and the amended and supplemental cross-petition of the Walbridge Building Co. was filed on August 21, 1915. The Walbridge Building Co. by reply set up the statute of limitations of four years, and insists that any claim made on account of fraudulent representations is barred by that statute. The court of common pleas sustained this contention and for that reason entered the judgment already stated. It will be noted from the pleading filed by the Nasby Building Co. that it does not ask for the cancellation or rescission of the lease by reason of the claimed fraudulent representations, but asks only for damages resulting to it by reason of such claimed fraud. The principle of law that defenses are held not to be barred by the statute of limitations is one which is well established by the authorities and is founded on reason. The rule is succinctly stated in 17 R. C. L., 745 and in 25 Cyc. 1063, and is applied in Hart v. Church, 126 Calif. 471 [58 Pac. 910; 59 Pac. 296; 77 Am. St. Rep. 206]; Butler v. Carpenter, 163 Mo. 597 [63 S. W. 823]; Williamson v. Brown, 195 Mo. 313 [93 S. W. 791] and Pinkham v. Pinkham, 60 Neb. 600, 611 [83 N. W. 837]. Manifestly the purpose of the statute of limitations is, as has been well said, to bar actions and not to suppress or deny matters of defense whether equitable or legal.

The lease provides not only for the payment of rent, but it contains appropriate provisions for the payment of the mortgage indebtedness held by the Equitable Life Assurance Society, and the allegations of the pleadings show that the defendant has violated its obligation in that regard as well as its obligation to pay the rent to the Walbridge Building Co. and to pay to the latter company the unsecured indebtedness of $13,000. In view of the fact that the Nasby Building Co. does not claim a rescission or cancellation of the lease on account of the alleged fraud, but seeks only to recoup damages by reason thereof, if the judgment in the court of common pleas had proceeded only to the extent of adjudging that the Walbridge Building Co. was entitled to the possession of the premises, it would be free from prejudicial error; but it goes much farther than simply to adjudge the possession of the premises to that company, and decides that that company shall hold the premises free and clear of all claims of the Nasby Building Co. on account of the matters averred in the pleadings. We have already seen that as to some of these claims, the claim for damages set up by the Nasby Building Co. is purely defensive and is not barred by the statute of limitations.

The judgment will be reversed and the cause remanded for further proceedings according to law.

Chittenden and Kinkade, JJ., concur.  