Western New York & P. Ry. Co. v. Riecke

These proceedings were instituted by the above-named plaintiff and respondent for the condemnation of certain property situated in the city of Buffalo. The fee of said premises had been •owned by the respondent Annar L. Riecke. The defendant Walker was a tenant in possession of a portion of said premises. The commissioners found that the entire value of such portion of said premises was $1,987.50, and that of that, sum the defendant Walker, for the loss •of his leasehold interest, suffered damages in the amount of $1,440. We think the damages thus allowed to the latter were excessive, and that, therefore, the order of the Special Term setting aside the report ■of the commissioners should be affirmed. But, while holding this, view, we disagree with the learned court below as to the decision of ■certain material questions which arose upon the first hearing, and will arise again; and therefore, while agreeing with the result reached, are led to express our views upon these questions, and, preliminary to so doing, shall state some of the principal facts appearing.

The defendant Annar L. Riecke in 1893 became the owner, subject to a mortgage of $500 to the defendant Wasson, of certain premises upon which were situated two houses, to each of which was apportioned substantially one-half of the land, and which premises includ•ed those involved here. June 15, > 1900, the defendant Harry E. Riecke, her husband, by an instrument under seal, leased one of these houses to the defendant Walker for a term of three years from that -date, with “the privilege of continuing in possession for the further period of five years.” The rent reserved in said lease was $15 per month in case the tenant conducted a saloon and used an upstairs room, which he did. Walker went into possession under said lease .about the date thereof. January 27, 1902, the Rieckes entered into a ■contract with the defendant Rea to convey to him for an express consideration said premises, reserving the right to remove the buildings. 'The deed under this contract was to be delivered February 15, 1902. These proceedings were commenced April 2, 1902, and the commissioners of appraisal, who were appointed without any contest, in addi

It is a well-settled rule of equity that, where the owner of real estate suffers another to purchase the same from a third person, and to erect buildings thereon, under the erroneous belief that he has a good title, which belief was engendered by acts or conduct upon the part of the owner,- which, although undesignedly, were inconsistent with his ownership and consistent with that of the supposed owner, the real owner will not be allowed to enforce his title against the purchaser. Town v. Needham, 3 Paige, 545, 24 Am. Dec. 246 ; Trustees, etc., v. Smith, 118 N. Y. 634 , 641, 23 N. E. 1002 , 7 L. R. A. 755 . It must be equally true that, where the real owner has by acts and conduct induced a belief in a prospective lessee of the premises that the title is in a third person, and permits the former to enter into a lease with the latter without disclosing the error, and observes the lessee making improvements upon the premises in reliance upon the lease, and for the purpose of increasing the value of the leasehold, such owner will be es-topped from denying to the lessee the rights which he intended to acquire under his lease. It is to be remembered, as stated in Trustees, etc., v. Smith et al., supra: “It is not necessary, * * * to constitute an equitable estoppel, that there should be a false representation or concealment of material facts. Nor is it essential that the party sought to be estopped should design to mislead. If his act was voluntary, and calculated to mislead, and actually has misled another acting in good faith, that is enough. * * * When a party, either by his declarations or conduct, has induced a third person to act in a particular manner, he will not afterwards be permitted to deny the truth of the admission, if the consequence would be to work an injury to such third person, or to some one claiming under him.” When the evidence is examined in the light of these principles, we think it is ample to sustain a finding of a valid lease by Walker of the premises. It presents, as to Annar Riecke’s conduct, all the elements of an equitable estoppel; knowledge that while she was the actual owner her husband was holding himself out as the owner, and authorized to contract as such, and of the fact that Walker was assuming obligations which would extend over a period of eight years under the belief that title was in her husband. It shows that, with an opportunity to disclose the real facts, she neglected thoughtlessly or designedly so to do, and acquiesced in the execution of the contract and in the making by Walker of improvements, which added to the value of the leasehold, and which it may well be inferred were made for that purpose in view of the long term which the lease had to run. She sat by and saw Walker deal with her husband as the real owner of the premises, and took part in the negotiations for the lease in which he

We think it cannot be sufficiently answered to all of this that Wallcei has received value for all that he has paid; that the occupation of the premises has been worth what he paid for them in the way of rent; and that, therefore, there is wanting in this case one of the necessary elements of estoppel—that of impending injury to the party in whose favor it is claimed. Upon the faith of the husband’s ownership, the tenant bound himself to the payment of rent for a term of years by a contract which he could not, upon his part, repudiate. It would have been no answer to the husband’s demand for rent to say that he was not the real owner of the property. The tenant, in making the contract, took his chances upon the decline in the rental value of the premises; and now, that the movement has apparently been in the other direction, it would be inequitable to deprive him of the just fruits of his contract in this respect, as well as of the value of the improvements which he has made.

We have discussed this case upon the theory that the tenant, under the terms of his lease, was entitled to a renewal for the term of five years upon the rent originally reserved. The provisions of the lease that he was to have the privilege of continuing in possession for the further period of five years was equivalent to a covenant of renewal. Crawford v. Kastner, as Adm’r, 26 Hun, 441 . And a simple covenant of renewal for a specified term, with no provisions as to the rent, implies a renewal at the same rent as originally provided. Tracy v. Albany Exchg. Co., 7 N. Y. 474 , 57 Am. Dec. 538 ; Western Trans. Co. v. Lansing, 49 N. Y. 499 , 503. Under these views the order appealed from should be affirmed with costs.

Order affirmed, with costs. All concur, McLENNAN, J., in result.