McIntosh v. Rector of St. Phillip's Church — 30 N.Y. St. Rep. 191

Majority

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Martin McIntosh, App’lt, v. The Rector, etc., of St. Phillip’s Church of the City of New York, Resp’t.^[1]

(Court of Appeals, Second Division,

Filed March 18, 1890.)

Headnote

Specific performance—Lease—Covenant for rebew al.

In 1864 defendant leased to the Magills a lot for twenty years and three months, on which the latter covenanted to erect within seven years a four story brick dwelling-house, or the lease was to be void, with an agreement by defendant that if the covenant was kept, and the building left standing, at the end of the term, to give another twenty-year lease, or pay for the dwelling house. In 1868, for §500, the defenda- t, by a writi..g, released the lessees from the covenant to build, and consented to their assigning the-lease to plaintiff, who erected a four story building on the lot, which was used as a ca/rriage f tctory, which remained standing at the end of the term. Held, that upon the established facts there was no waiver of the covenant against assigning and sub-letting, and that there was a total failure of consideration for the renewal of the lease or the obligation to pay for the building.

Appeal from a judgment of the general term of the superior court of the city of New York, affirming a judgment entered upon a decision of the special term.

The action was brought to enforce specific performance on the part of the defendant of certain covenants in a lease executed by it to Robert and David Magill. On January 11, 1864, the defendant leased to said Magills a lot of land on Thirteenth street, in New York city, for the term of twenty years and three months.

The lessees covenanted therein to erect on the premises within seven years a good and substantial brick dwelling-house-of at least, four stories in height above the basement, and in default of the erection of said dwelling-house the lease and the estate thereby' granted should thenceforth cease and be void. Said lessees further agreed not to assign said lease, or sub-let all or any part of said premises without the consent of the lessor to be firstobtained in writing and under seal.

The lease contained the further provision “ that if the said par

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ties of the second part * * * shall erect and build * * * on the premises hereby demised such dwelling-house as is above described, * * * so that such dwelling-house shall be standing on the said premises at the end and expiration of the said term, and shall faithfully perform all the other covenants and agreements on their part to be performed, the said parties of the first part * * * will at such end and expiration of said term, at their option, either grant unto said parties of the second part * * * a new lease of the said premises hereby demised for a further term of twenty years, * * * or will pay to the said parties of the second part the just and fair value of any dwelling-house which may then be standing on the demised premises.”

Provision was made for fixing the rent reserved in the new lease, and for ascertaining the value of the dwelling-house. ' ■

On ¡November 18, 1868, the defendant and the lessees entered into an agreement whereby, after reciting the covenant to erect the dwelling-house and the covenants against assigning and subletting, in consideration of the payment of $500 the defendant released and discharged the lessees, their heirs and assigns, “ of and from the said covenants and agreements to erect and build in said lease ” and consented to the assignment of said lease to the plaintiff. It was further provided in said agreement as follows: “ Said lease shall in all its parts be acted upon by the respective parties as though such covenant to build had not been made and inserted therein, and all other parts of said lease shall be interpreted accordingly ; this release being given to exonerate the said Bobert ‘and David Magill and their heirs and assigns of and from all obligation growing or arising out of the said obligation in said lease contained.”

The lease was thereupon assigned to the plaintiff, who soon thereafter erected on the premises a four-story brick building which was used as a carriage factory.

The building was standing on the demised premises at the end of the term.

Jacob F. Miller, for app’lt; Sidney S. Harris, for resp’t.

In Smith v. St. Phillip's Church, 107 N. Y., 610 ; 12 N. Y. State Rep., 783, this court construed a release, substantially like the one in this case, as bearing upon a covenant of renewal contained in a lease almost identical with the one before us, and held that the effect was to wholly discharge the lessee from any obligation to build, and that thereafter the lease stood as though no covenant to build had been inserted; but that the right' to build during the term was preserved; and the lessee in that case having built was held entitled to have the defendant exercise the option provided by the lease. It was said in the opinion in the case cited, that the erection of a building not authorized by the lease would be a mere voluntary act which would give no right to a renewal, and for which the lessor would not be bound to pay.

That statement was probably not necessary to the decision of the case cited as the plaintiff there had erected such a building as was

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called for and authorized by the lease and had thus furnished the consideration for the renewal. We are of the opinion, however, that it correctly states the law applicable to the case before us. The lease provides that if the lessees “ shall erect such dwelling-house as is above described,” and if “ such dwelling-house shall be standing on the demised premises at the expiration of the term, and shall fully and faithfully perform all and singular the other covenants, stipulations and agreements on their part to be performed,” then the party of the second part will grant a new lease or pay the value of the building.

Thus by the express terms of the agreement the erection of the dwelling-house and the fact that it is standing on the demised premises at the end of "the term, was made the consideration for the covenant to renew the lease or pay for the building, and the performance of the other covenants in the lease on the part of the lessees wei’e conditions precedent to their right to enforce such covenant against the lessor.

Unless the plaintiff has fulfilled those conditions he has no remedy against the defendant. People's Bank v. Mitchell, 73 N. Y., 406 Pike v. Butler, 4 id., 360.

Ho action could be maintained upon the lessor’s covenant until the erection by the lessee of such a building as was authorized by the lease, or some sufficient reason shown for its non-erection, or that the obligation to erect it had been waived by the lessor. Glacius v. Black, 50 N. Y., 145 .

The fact that the lessor received rent under the lease after knowledge of the erection of the carriage factory would not constitute a waiver of the agreement to erect a dwelling-house as a consideration for a renewal of the lease.

Eeceiving rent after forfeiture waives the forfeiture and affirms the lease freed from the condition. Conger v. Duryee, 90 N. Y., 594 ; Taylor’s Landlord & Tenant, § 497. Thus if there is a condition that the tenant will not assign the lease or sublet the premises and the landlord accepts the rent knowing of such assignment or subletting, he affirms the lease without those conditions. Murray v. Harway, 56 N. Y., 337 .

But in this case there was, after the execution of the release, no covenant on the part of the tenant to build, and therefore there could be no breach and no waiver of such a covenant. It was entirely optional with the tenant whether or not he should erect a building on the property, but if he desired to obtain- the benefit of the landlord’s covenant to renew, or pay for the building, he was bound to erect such a building as was specified in the lease, and see to it that it was standing on the premises at the expiration of the term. There was no claim in this action that the building erected by the plaintiff complied with the lease.

It was not so alleged in the complaint. The right to recover was there asserted on the ground of the erection of “a building other than a dwelling-house, by permission of and agreement with the defendant,” and it was sought to establish such an agreement by parol evidenee.

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The trial court found as facts that the building erected by the plaintiff was intended for and was used as a carriage factory and blacksmith’s shop, up to the expiration of the lease, and that it was erected without defendant’s consent That the lease had been assigned during a part of the term by the plaintiff, and that the premises had been sublet from year to year down to the expiration of the lease, and that such assignment and subletting was without the knowledge or consent of the defendant.

He refused to find that the release was executed to enable the plaintiff to take an assignment of the lease and erect on the demised premises a building for business purposes, and that the same was to take the place of the dwelling-house for the purpose of taking a new lease.

There was evidence to support these conclusions of the special term, and they cannot be reviewed in this court.

■ Upon the established facts, therefore, there was no waiver of the covenant against assigning and subletting, and there was a total failure of consideration for the renewal of the lease or the obligation to pay for the building.

Under such a state of facts there can be no recovery by the plaintiff.

The judgment should be affirmed, with costs.

All concur.