Majority
p. 110VIANY against FERRAN. Supreme Court, First District ; Special Term, May, 1868.
Headnote
Specific Performance of Covenant to renew Lease. —Appointment of Arbitrator.Under a lease in which the lessor covenants to give a renewal if the lessee ' should serve a notice binding himself to take and accept it, the rate of rent upon such renewal to be fixed by arbitration,—the giving of such notice becomes immaterial after the parties have both proceeded to the appointment of arbitrators.
In such case, if the arbitration fails, by reason of the arbitrator chosen being unable to complete the reference, and the parties failing to agree on another umpire, the lessee may maintain an action of an equitable nature to compel the execution of a renewal lease, and have a reference to ascertain what the amount of rent should be.
Motion .to dissolve an injunction.
This action was brought by Jean Viany against Auguste Eerran, to obtain specific performance of a covenant in a lease of real property, for a renewal, at a rent to be fixed by arbitration. It appeared that the parties had agreed upon Judge Daly as their arbitrator, or referee, under the covenant in the lease, but he having been unable to attend to the case, they had failed to agree .upon, any other. The plaintiff sought as relief in this action that the defendant be directed to proceed on his part with the arbitration and to appoint another, should the arbitrator appointed by the defendant refuse to act, and that the defendant be directed and required to execute a lease at the rent to be settled and determined on, as provided by the original lease and the covenants therein contained.
J. H. Pignolet, for the plaintiff.
p. 111—I. The plaintiff’s prayer cannot be granted for the following reasons, viz: (1.) With regard to agreements to refer to arbitration, it is clear that the court will not entertain suits for their specific performance (Price v. Williams, referred to, 6 Ves., 818 ; Street v. Rigby, Id., 815 ; per Sir W. Grant, in Gourlay v. Somerset, 19 Id., 429 ; Agar v. Macklen, 2 Sim. & S., 418 ; Gervaise v. Edwards, 2 Dr. & W., 80; South Wales Railway Co. v. Wythes, 5 De Gex, 800). (2.) The court will not entertain a bill of specific performance of an agreement to refer to arbitration, nor substitute the master for the arbitrators (Agar v. Macklin, 2 Sim. & S., 418).
H. Alker, for the defendant.
II. As to the further prayer for judgment, viz : In case this court should determine the above relief prayed for is not the relief plaintiff is entitled to, that then the just annual rent of said premises for tiie said term be fixed under order and direction of this court, and that the defendant be compelled specifically to perform the covenants and conditions in said original lease in respect to the addition of five years. The plaintiff is not entitled to this relief. (1.) Because there is want of mutuality in the contract or covenant to renew lease. (2.) A party not bound by the agreement itself, has no right to call upon a court of equity to enforce specific performance against the other contracting party, by expressing his willingness, in his bill, to perform his part of the contract. His right to the aid of the court does not depend upon his subsequent offer to perform the contract on his part, but upon its original obligatory character (Duvall v. Meyers, 2 Md. Ch. Dec.; see, also, Bodine v. Gladding, 21 Penn. [9 Harris], 50. (3.) A contract will not be decreed specifically if there be no mutuality,—i. e., if both parties cannot demand an execution, neither shall be favored (Boucher v. Vanbuskirk, 2 A. K. Marsh, 346 ). (4.) A conditional contract cannot be enforced unless the condition has been made absolute.
—I think the learned counsel for the defendant misconstrues the provisions of the lease as to the renewal. The lease provides that if the lessee, having per
p. 112
formed Ms covenants, gives notice in writing on or before Feb. 1, 1868, binding Mmself to take and accept a further term of five years from May 1, 1868, the lessor will grant a new lease for such further period. It then provides for the fixing of the rent by arbitration, and instructs the arbitrators as to the “principle” by which they are to govern themselves, but it gives no option to the lessee to accept or reject the lease after the arbitrators have acted. It simply very inartificially prescribes a rule of action for the arbitrators. The lessee’s obligation to take the new lease becomes perfect as soon as he gives the notice binding himself to take and accept another, lease for the further term. The moment that notice is given the obligation of the plaintiff to grant, and of the defendant to take, the new lease, becomes perfect and mutual. Whether the allegation in the complaint, that the plaintiff gave the notice that he would take the. further term, be denied or not, is not material, because both parties are estopped on that point by having proceeded to appoint arbitrators. That appointment being an act only to be done after notice that the new lease was to be taken, neither party, after making the appointment, can be heard to assert that the notice had not been given. The case then is briefly thus: The parties have entered into a covenant for a renewal of the lease • which, by the notice served by the plaintiff, became mutual and obligatory on both of them, and there is nothing to be done except to ascertain the rent, and that was to be fixed by arbitration. The arbitration was commenced, but fell through by reason of Judge Daly being unable to devote sufficient time to complete it, and the parties failing to agree upon any other umpire.
In Kelso v. Kelly ( 1 Daly, 419 ), Judge Daly, reviewing the authorities, says, “ Where a valid contract has been entered into for the renewal of a lease, by which it is provided that the amount of rent to be paid shall be settled by arbitration, and the party who is to give the lease refuses to appoint an arbitrator, a court of equity will compel specific performance, and order a reference to ascertain
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wliat the amount of the rent should "be” (see also Wells v. De Leyer, 1 Daly, 45 ).
This I understand to "be the settled law of this State, and I regard the principle as applicable to and decisive of the question in this case.
The motion to dissolve the injunction must therefore be denied. The costs may abide the event of the action.