Relief from Forfeiture for Non Payment of Rent In Oregon
The jurisdiction of equity to relieve a lessee from forfeiture of a lease is well established:
"'Where the breach of the tenant's covenant causing forfeiture of the term is due to excusable accident or mistake, this may constitute ground for equitable relief under the general power of equity to grant relief in the case of accident or mistake.'" Caine v. Powell, 185 Ore. 322, 330, 202 P.2d 931 (1949) (quoting 32 Am Jur 756, Landlord and Tenant, 892 (1942)).
Indeed, "when the failure to pay rent in accordance with the terms of the lease is due to excusable neglect equity will ordinarily refuse to decree a forfeiture of the lease." Moore et ux v. Richfield Oil Corp., 233 Ore. 39, 47, 377 P.2d 32 (1962).
In all cases, however, relief from forfeiture may not be granted "'unless it can be done with justice to the other party.'" Caine, 185 Ore. at 331 (quoting John Norton Pomeroy, 2 Equity Jurisprudence, 451, 285 (5th ed 1941)).
Relief must be based on the good faith intentions of the lessee to pay rent. See Pomeroy, 2 Equity Jurisprudence, 452 at 292. It also depends to a great extent on each case's circumstances. Caine, 185 Ore. at 331.
The Supreme Court specifically noted in State Hwy. Comm. v. Demarest, 263 Ore. 590, 601, 503 P.2d 682 (1972), and in Fry v. D. H. Overmyer Co., Inc., 269 Ore. 281, 306, 525 P.2d 140 (1974), that each case must be assessed in light of its own facts.
Thus, in each case the court must assess whether a lessee's neglect is excusable and whether the circumstances otherwise permit equity to relieve the lessee. at issue in this case is whether defendants' unilateral mistake in misaddressing the rent payment was "excusable neglect or accident." Id. at 304.
The Supreme Court provided relief to the lessees in Caine, where the lessees were negligent in not reading the lease that provided a 10-day grace period for late payments of rent.
However, the lessees believed that they had a 30-day grace period based on an oral representation by the lessor's agent.
Thus, the court was presented not with a mere "failure, unaccompanied by other circumstances calling for the interposition of a court of equity, to pay an installment of rent within the statutory time," but with proof that the "lessees were misled by a representation of the lessor's agent into believing that the lease provided for a longer period of time." Caine, 185 Ore. at 330.
Similarly, in Moore, the Supreme Court granted relief to the negligent lessee who had been misled by its own agents. 233 Ore. at 46-47.
In contrast, in Grove v. the Hindquarter Corporation, 45 Ore. App. 781, 784, 609 P.2d 840 (1980), we noted that the mistake of the lessee's manager in simply forgetting to pay the basic rent, "completely uninfluenced by [the lessors], is not such a mistake as will justify the intervention of equity in the action."