Bachrach v. Leventritt — 45 A.D. 533

Majority

p. 533

David Bachrach and Valentine Gumprecht, Appellants, v. George M. Leventritt, as Assignee for the Benefit of Creditors of Samuel W. Richards, Respondent.

Headnote

General assignment for creditors — an agreement to give thereby a preference to a landlord on condition that the assignee should not pay rent, construed.

A lessee in contemplation of making a general assignment for the benefit of his creditors entered into an agreement on June 9, 1897, with the lessors and the intended assignee, by which the lessee agreed to prefer the lessors’ claim for past due rent upon condition that the lessors should not ask or demand or be entitled to receive any rent from the lessee or “from the assignee under the general assignment aforesaid during or for the months of July, August or September, 1897,” The second branch of the agreement stipulated that the title to the lease should pass to the assignee, and that he might sub-let the premises “ provided, however, and this agreement is made upon the express condition, that such new tenant shall be acceptable to said landlords, and that this agreement shall be of no effect unless and until the same shall have been executed by said assignee, and unless the said tenant, on of before August 1, 1897, shall procure some person to be acceptable to the landlords, to guarantee in -writing the payment of the rent of said premises for said months of July, August and September, 1897, as the same is reserved in- said lease and at the times therein specified, and that upon the failure of said tenant to procure such guarantor, as herein agreed, this agreement shall terminate and become void, and these premises shall be forthwith surrendered to the landlords and the rent for so much of said term as shall then have expired shall at once become payable. It is also agreed that unless in the meantime a new lease shall have been executed between said landords and the tenant, to be procured by said Richards as aforesaid, the said remises shall be surrendered to said landlords on September 30, 1897.”

Held, that the provision as to the agreement becoming void applied only to the second branch of the agreement;

That upon paying the lessors the amount of their preference for past due rent the assignee acquired an absolute right to be relieved from the duty of paying rent for the months of July, August and September.

Appeal by the plaintiffs, David Bachrach and another, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New. York on the 29th day of June, 1899, upon the decision of the court, rendered after a trial at the New York Special Term, dismissing the complaint upon the merits.

William G. Wilson, for the appellants.

Samuel P. Goldman, for the respondent.

This appeal is from a judgment entered upon a dismissal of the complaint in an action for rent of certain premises in the city of New York, of which the plaintiffs were lessors and one S. W. Richards the lessee. The term was to begin on the 1st day of September, 1893, and end on the 1st day of May, 1903, the rent to be paid in equal monthly payments in advance on the first day of each and ■every month during the term. On the 1.0th of June, 1897, .Richards made an assignment for the benefit of creditors to the defendant.' At that time there were arrearages of rent due. On the day preceding the assignment, terms of an agreement between the landlords, the lessee and the intended assignee were agreed upon relating to the rent in arrear and to the unexpired term of the lease: That agreement was reduced to writing and signed by the parties. It is dated the ninth of June. The action is brought against tlie assignee to recover rent of the premises fordhe month of July, 1897, upon the theory that, by the terms of the agreement referred to, the assignee has become bound to pay rent for that month under the covenant of his assignor contained in the lease. ■ The assignee went into possession and it is conceded would be liable for the rent, unless he is absolved from that liability by the terms of the agreement of June ninth. The only question before the court relates to the construction of the agreement, which is set out in full in the record. Its recital shows that it was entered into between the parties in anticipation of Richards' making the assignment for the benefit of creditors. It states that he owes the plaintiffs the sum of §4,146.66 for arrears of rent of the premises, and that being desirous of securing that indebtedness to them, he agrees to make them. “ the second preferred creditors in the said general assignment subject to a prior preference of not more than twenty-five hundred dollars, for the sum of forty-one hundred forty-six and 66/100 dollars, upon the sole condition, however, that the said above-named Mrs. Valentine Gumprecht and David Bachrach, their heirs,' executors, successors and assigns, shall not ask or demand or be entitled to receive any rent from the said Samuel W. Richards or fi’om the assignee under the general assignment aforesaid, during or for the months of July, August or September, 1897.” There then follows an obscure and rather blind provision con

p. 535

icerning an entirely different subject, namely, what shall bé done with the "nnexpired term of .the lease.; and .respecting that;-'the: parties agreed that the’ title to the lease’'Should -passto the assigned, ■under the general assignment, and the lessors Consented to the sale;' assignment and subdet-tm-g-of "the premises under the lease by the assignee, to whomsdevér he . should deem suitable and i proper, ■“’provided,- however, and this agreement-is made upon- the'express-condition, that such newtétiant shall be acceptable to said landlords, and that this agreement shall be of no effect unless and until the same shall have been, executed by. said assignee,' arid unless'-the1 said tenant,-on or before August 1, 1897; shall procure some person, to ■be acceptable to the landlords, to guarantee in writing’the payment of the rent of said- premises- for said months of- J uly, August and Septein'b.er, 1897, as the same'is resérved-in said lease and:at the times therein specified; arid that upon the failure of said tenant to procure such guarantor, as herein agreed, this agreement shall' terminate and become void; and these premises'shall be forthwitlCsufrendered to the landlords and the rent for so much of said term as shall then have expired shall at onrie'bécome payable. It is also agreéd that unless in ’ the meantime -a new lease shall have- been gxecuted between said'landlords'and thé tenant, tó be! procured by said Richards [lessee] as aforesaid, the said premises shall be surrendered to said landlords on September 30, 1897.” It is' claimed by the plaintiffs that by force of the latter stipulations of the agreement the' assignee has' become' liable to pay the rent for the month of July; but it seems quite apparent that the second branch of this .agreement was intended to be entirely independent of the first, and that is the practical construction the parties themselves have given it. The preference •' óf. thé indebtedness for past due rent was made upon the express condition that the assignee should not be chargeable with any rent to aerue for the months of July, August and September, and on the 29th of July, 1897, and as the agreed statement of facts- in the case shows, the whole amount'of that preference was paid to the landlords, and thus that part of the agreement was executed and the consideration for the assignee’s exemption from liability paid. .

Construction must be given to the whole agreement so that all of its parts may become operative and none of thérri' be destroyed’, if

p. 536

that is possible. There is ho real irreconcilable repugnancy in its provisions. The assignee was to. take the title to the lease in. order that it might be assigned by him to some tenant to be procured ; apparently, according to the last sentence of the agreement.,, by Richards. The landlords consent to a sale and assignment of the lease upon the express condition that the tenant to be found shall be acceptable to them and the assignee, and that such tenant, on or before August 1, 1897, shall procure a person to guarantee the rent of the premises for those very three months, showing that it was in the contemplation of the parties that the tenant to be found should be responsible for the rent accruing for those three months. The assignee evidently did not take the lease for the purpose of retaining the premises for his own use; he could have put a tenant in possession at any time, and that tenant was to pay the rent for the very month of July now sued for. , ...That the, assignee was not to pay it is evident from the tirst branch of the agreement. An acceptable tenant to both parties might go into possession at any time after the tenth of June and have the wlrnle month of July within which to' procure the guaranty for rent; and if he should not procure that guaranty, then the agreement by which he entered into possession would become void and he, the tenant, become liable for so much ' ' ' ' ' . . . O of the rent of the term as should then have expired. Then if ,a tenant was not procured by the thirtieth of September; the premises were to be surrendered back to the landlords.

The agreement with respect to the assignee taking the lease and the procurement of a tenant is one, in substance, separate and distinct, from the first' branch of the instrument; and the provision with respect to the agreement terminating and becoming void applies, only to the second branch. Otherwise the whole instrument would have ■become nullified and the plaintiffs would not have been entitled to receive the amount of the preference, which was actually paid to them on the twenty-ninth of July.

The contract was properly construed by the court below, and the judgment should be affirmed, with costs.

Van Brunt, P. J., O’Brien, Ingraham and McLaughlin, JJ., concurred.

Judgment affirmed, with costs.