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Tracy v. Albany Exchange Co.

7 N.Y.3d 472 Court N.Y. English

Delivered by *474 Jewett, J.

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p. 472
Tracy v. Albany Exchange Company.

Headnote

Lease. — Covenant to renew,
A covenant that the lessee shall have the refusal of the premises, at the expiration of the lease, for a specified term, is a covenant to renew, for the same rent, for such term; and the lessor is bound to renew, whenever the lessee makes his election.
Where covenants are independent, the breach of one is no excuse for the nonperformance of the other.
Appeal from the general term of the Supreme Court, in the third district, where a judgment entered in favor of the plaintiff, in a case tried before the court, without a jury, had been affirmed.
This was an action to recover damages for the breach of a covenant, contained in a lease from the defendant to the plaintiff, of a store in the Albany Exchange building, that the plaintiff should have" the refusal of the premises, at the expiration of the term, for three years longer.
*It appeared, on the trial before Parker, J., ^ without a jury, that the lease was executed by ^ ' the parties on the first day of February 1847, granting the premises to the plaintiff for two years and six months from the first day of November 1846, at the rent of $1000 per year, payable quarterly, and contained the following covenant: “The said party of the second part to have the refusal of the premises, at the expiration of this lease, for three years longer.” On the first day of February 1849, the plaintiff requested the defendant to execute to him a new lease of the premises, for three years from the first day of May following, at the same rent as that reserved in the lease before mentioned, the latter being the day on which the then term would
p. 473
expire. The defendant refused to do so, unless the plaintiff would pay $1200 per year rent, instead of $1000, and subsequently gave notice to the plaintiff, that unless he would take a new lease for the premises, at a rent of $1200 per annum therefor, the defendant would rent the premises to another. Subsequently, and on the 10th day of February 1849, the plaintiff took from the defendant a lease for one year, from the first day of May following, at the rent of $1200 per annum, protesting, at the same time, against the right of defendant to exact an increased rent, and claiming to reserve his right of action, and for which this action was brought.
It was admitted by the pleadings, that the plaintiff demanded performance of the covenant, at the expiration of the first term, and that the defendant refused. *It was admitted, that the premises were worth $1200 per year, and were rented by the defendant for that sum. It was also admitted, that the sum of $57 remained due on account of the retit of the premises from the plaintiff to the defendant, from the first day of February 1849, being part of the quarter’s rent falling due on that day, and the further sum of $250 from the first day of May 1849, being the quarter’s rent due on that day, which sums still remained unpaid, and to recover which the defendant had brought a suit against the plaintiff.
The learned judge decided, that the plaintiff was entitled to recover the sum of $600, less a rebate of interest on $200, from the day of the trial to the 1st May 1851, and entered judgment accordingly; to which the defendant excepted. And the judgment having been affirmed at general term, the defendant took this appeal
Reynolds, for the appellant.
Mill, for the respondent.

(after stating the facts.) — The decision of the main question arising in this case, must "turn upon the true construction of the words of the covenant for a breach of which this action is brought, which are, “The said party of the second part to have the refusal of the premises, at the expiration of this lease, for three years longer.” There are several decisions showing that a covenant in a lease to renew it, without providing in respect to the term to be granted, or the amount of rent to be paid, implies a renewal for the same term and rent. But a covenant to renew upon such terms as might be agreed upon is void for uncertainty. (Rutgers v. Hunter, 6 Johns. Ch. 218 ; Whitlock v. Duffield, 1 Hoffman Ch. 110; 4 Kent Com. 108; Abeel v. Radcliff, 13 Johns. 297 ; 1 Hilliard Ab., ch. 15, § 78.)

Whatever ambiguity there may be in the words of the covenant, the intention of the parties, to be collected from them, considered in connection with the whole instrument, obviously was, that the plaintiff, at his election, should have a renewal of the lease for the premises, for the further term of three years, to commence at the expiration of the existing lease, for the same annual rent as the former, payable quarter-yearly. Although the intent of the parties be in opposition to the strict letter of the contract, it must prevail, when clearly ascertained from it. *(2 Kent Com. 555; Parkhurst v. Smith, Willes 332; Hathaway v. Power, 6 Hill 453 ; Hobart 277.)

The plaintiff was not restricted to the time when the term granted by the lease expired, to make his élection for a renewal for the farther term; and if made, and a renewal demanded, the defendant was bound to comply with his covenant in that respect. The plaintiff, in February 1849, made his election and demanded a performance; the defendant refused, unless he would consent to take a renewal at an enhanced rent, and gave him notice that unless he would do so, the defend

p. 475
ant would rent the premises to another; this, I think, constituted a breach of the covenant by the defendant. The taking of the lease by the plaintiff for a different term, under the circumstances, could not operate as a surrender of the first, or as a performance of the covenant by the defendant. The term of this second lease did not commence until the expiration of the first; and besides, the evidence shows that it was not intended by the plaintiff to relinquish or surrender, or by the parties that it should be accepted as a performance of the covenant, and that should be regarded as. decisive of the question. (Gybson v. Searl, Cro. Jac. 176; Van Rensselaer v. Penniman, 6 Wend. 569 , 579; Bogart v. Burkhalter, 1 Denio 125 .)

As to the objection made by the defendant, that there was rent in arrear, and, therefore, the plaintiff was not entitled to a further lease, the covenant being independent, the liability of the defendant for the breach of the covenant in question remained. The payment of the rent was not a condition precedent to the right of the plaintiff to a renewal of the lease under the covenant, and he might bring his action for a breach of it, although he was guilty of a default in the payment of his rent or performance of his covenant. (Dawson v. Dyer, 5 Barn. & Ad. 584.)

The measure of damages was correct. It was confined to the difference between what the plaintiff was to have paid for the rent for the term, and what he was compelled to pay under the new lease. (Masterton v. Mayor of Brooklyn, 7 Hill 61 ; Driggs v. Dwight, 17 Wend. 71 .) The judgment should be affirmed.

Judgment affirmed-

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