Ballou v. Baxter — 28 N.Y. St. Rep. 431

Majority

p. 431

Henry C. Ballou, as Ex’r, Resp’t, v. Thomas W. Baxter et al., App’lts.

(Supreme Court, General Term, Fourth Department,

Filed December 7, 1889.)

Headnote

1. Lease—Surrender.

On January 1,1884, plaintiff’s testator leased to defendants certain premises for six years. After taking possession and on November 1, 1884, defendants became insolvent, and sublet to one H. for six months at a lower rent, reserving to themselves certain privileges. H. is still in possession. H. paid rent to the testator, who gave him receipts for rent at different times, but never gave him a lease. Defendants knew that H. was in occupation and was paying rent to the testator, but made no objection. In an action for the difference between the rent reserved in the lease and the lower rent, Held, that defendants were liable.

2. Same.

In order to make out a surrender of a lease by operation of law it is not enough that the landlord has accepted rent of the new tenant or that he is-in occupation. It must be clearly proved in some manner that the original parties have mutually agreed that the term be surrendered.

Appeal from judgment entered upon the decision of the court upon trial before the court without a jury at Oneida circuit, March, 1889.

The action is upon a lease for rent; the defense is surrender by operation of law.

On the 1st of January, 1884, Theodore P. Ballou, plaintiffs testator, and the defendants executed under their hands and. seals a lease by which Ballou rented to the defendants for the term of six and one-third years from January 1, 1884, certain premises in Utica called a wood shop and store, at the yearly rent of $660, payable quarterly.

The defendants entered into possession and remained to ¡November 1, 1884. At that date, having become insolvent, they subleased to one Hubley for the term of six months for the rent of $250, payable one-half February 1, 1885, and the other half May 1, 1885. In the lease to Hubley the defendants reserved to themselves certain privileges in connection with the use of the store. Hubley, or his firm, Hubley & Baxter, went into possession, and have so continued down to the time of the trial. On the 30th of January, 1885, Ballou notified Hubley & Baxter that there was due him for rent of the prem-_ ises under the lease to defendants, one-quarter, being $165, due ¡November 1, 1884, and one-quarter due February l, 1885, and that they should pay him any rent they owed for the premises, and forbade their paying to any one else. They thereupon paid to Ballou the rent on the under lease, his receipt given to them on the last quarter reading as follows:

“ $125. Utica, May 2, 1885. ¡Received from Hubley & Baxter their note for $125 and interest at three months, for rent. to May 1, for the Meadow street building, 3 and 5.

“T. P. Ballou.”

At the expiration of the under lease May 1, 1885, Hubley & Baxter saw Ballou and talked with him on the subject of their

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continuing in possession. The conversation itself is not shown. They remained in possession, paid Ballou $125 quarterly, he going to the premises for it and receipting it to the firm. The receipt given August 1, 1885, reads: “ Received from Hubley & Baxter $125 for one quarter’s rent, Meadow street

“T. P. Ballou.”

The defendants knew that Hubley & Baxter were occupying after May 1, 1885, and were paying rent to Ballou and made no objection. Ballou testified in a deposition taken before trial that after May 1, 1885, Hubley & Baxter would not pay a larger rent than under the under lease. Hubley testifies generally that Hubley & Baxter never had any lease from Ballou.

In June, 1885, Ballou brought an action in the supreme court against these defendants for the balance of the rent under the lease to May 1, 1885, after crediting the $125 for two quarters received from Hubley & Baxter, and recovered judgment therefor in February, 1886.

The present action is for the rent due under the lease August 1 .and November 1, 1885, and February 1, May 1 and November 1, 1886, less the $125 per quarter paid by Hubley & Baxter, the ■difference being forty dollars per quarter. After the commencement of this action T. P. Ballou died, and the plaintiff was substituted in his stead.

C. D. Aclams, for app’lts; M J. Richardson, for resp’t.

The claim of the defendants is that from and after May 1, 1885, the lease and term were surrendered by operation of law and the defendants thereby discharged from all liability for rent. There was no express surrender ; there was no •agreement between the defendants and Ballou on the subject. The defendants sub-leased to Hubley, such lease expiring May 1, 1885. This action is for rent accruing after that date over and above what Ballou received from Hubley & Baxter. The latter remained in possession without objection from defendants, but no arrangement between them and defendants, or between them and Ballou, is shown. They stayed there, and paid to Ballou $125 a -quarter, being at the same rate they paid prior to May 1, 1885. The main circumstance to support the position of the defendants is the receipt by Ballou of the rent from Hubley & Baxter.

In Talbot v. Whipple, 14 Allen, 180 , it is said that any acts which are equivalent to an agreement on the part of a tenant to abandon, and on the part of the landlord to resume, possession of demised premises amount to a surrender of a term by operation of, law. There must be some act which implies that both parties have agreed to consider the surrender as made. Beall v. White, 94 U. S., 389 . A surrender is implied when another estate is created by the reversioner or remainderman, with the assent of the termor, incompatible with the existing estate, or term. Coe v. Hobby, 72 N. Y., 145 ; Smith v. Kerr, 108 id., 36; 13 N. Y. State Rep., 115. It will not be implied against the intent of the parties as manifested by their acts. In Smith v. Niver, 2 Barb., 180 , it is said by Judge Harris that a lessor, who has consented to a change

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of tenancy and has permitted a change of occupation and received rent from the new tenant as an original and not as a sub-tenant, cannot afterwards charge the original tenant for rent accruing during the occupation of the new tenant. A similar rule was applied in Page v. Ellsworth, 44 Barb., 636 , as applicable to a party holding over after the expiration of the term. Upon this subject Judge Mullin, in Bedford v. Terhune, 30 N. Y., 463 , after referring to several cases, says: “ It will be seen that in all of the cases a mutual agreement between the lessor and the original lessee that the lease terminates, must be shown. It is not necessary that the agreement should be express; it may be inferred from the conduct of the parties. The occupancy by some other than the lessee is, of course, a circumstance to show a surrender; but as the new -occupant may enter as tenant of the lessee, or as his assignee, or -even as a trespasser, and thus his occupancy be consistent with the continuance of the first lease, it is absolutely essential that it should be clearly proved that the original lessee assented to the termination of his term; it must be proved that the lessor and lessee mutually agreed to a surrender of the term, and that proved, the original tenant is no longer liable; but the new tenant, if there is one, is liable.” In Wilson v. Lester, 64 Barb., 431 , it was held that the mere receipt of rent from the assignee of the lease will not have the effect to discharge the original lessee when there is no proof of the surrender of the premises and an acceptance of the assignee as tenant. So in Laughran v. Smith, 75 N. Y., 206 , it was held that the fact that the plaintiff, with knowledge that defendant had ceased to occupy, collected and accepted, from the occupants, rent accruing after defendant left did not discharge defendant from liability and did not establish a surrender or a new letting. In Winant v. Hines, 6 N. Y. State Rep., 261, where the tenant left before the expiration of the term and the landlord re-let for the rest of the term at a reduced rent, it was held that the landlord could recover of the original tenant the balance of the rent under the original lease, after crediting what he received from the new tenant.

In the present case, the original lease has not yet expired. For aught that appears, the defendants can resume possession for the balance of the term at any time subject to such rights as Hubley •& Baxter may have as tenants holding over. In the lease to them, the defendants reserved certain privileges. For aught that appears, they continued to have those privileges during the subsequent occupancy of Hubley & Baxter, and during the time covered by the rent here sued for. Ho contract is shown between Ballou and Hubley & Baxter, so that the only obligation held by Ballou is the one against tlie defendants. Did the receipt by Ballou, after the termination of the under lease, of rent at the same rate he had before received from the same parties indicat an intention to release defendants and accept the under tenants as his ? It did not have that effect before, as adjudicated in the action brought for the balance of the rent prior to May 1, 1885. There is nothing to show a different intention afterwards. The

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presumption is that it was received on the same basis. The form of the receipts is substantially the same. It was not received as upon an original tenancy, for there was no promise by Hubley & Baxter to pay Ballou, and there was, therefore, no acceptance by Ballou of Hubley & Baxter in place of defendants. Without objection from defendants, and to their knowledge, Ballou received and receipted for such sums as Hubley & Baxter were willing to pay, and which presumptively represented the rent due from Hubley & Baxter as holding over on the under lease. This was not inconsistent with Ballou retaining his claim on defendants for the balance.

We think the defense of surrender by operation of law was not made out, and plaintiff properly recovered.

Judgment affirmed, with costs.

Hardin, P. J., and Martin, J., concur.