United States Trust Co. v. O'brien — 61 N.Y. Super. Ct. 1

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UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee, Etc., Respondent v. MILES M. O’BRIEN, Appellant.

Headnote

Landlord and tenant—Lease, breach of covenant thereof—Damages.

This action was brought to recover damages for an alleged breach of the usual clause or covenant in a lease which required the defendant (the lessee) to permit the notice “ To Let ” to be placed upon the building, and to allow the building to be inspected by persons desiring to rent the same from the plaintiff (the lessor). A sub-tenant of the defendant occupying the premises from March 1 to May 1, 1889, the last portion of the term, refused to permit the plaintiff to exhibit the premises or to put up the bill of “ To Let ” thereon, as provided for in the covenant.

There was no evidence that the plaintiff could have rented the premises, beyond that to be inferred from the fact that defendant’s sub-tenant refused to show the premises to a person taken there to inspect them and to permit the bill “ To Let ” to remain on the premises. After the termination of the lease the premises remained vacant for about five months. They were worth about $75 per month, and the jury awarded the plaintiff $375 damages, being the rent for the time the premises were vacant.

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Held, that there was no reasonable certainty that the plaintiff would have let the house if the covenant claimed to have been violated had been literally and fully performed. There was no solid substantial basis on which the jury could find, as matter of fact, that the refusal to perform this covenant was the sole cause of keeping plaintiff’s house idle for five months, and in consequence plaintiff lost so many months’ rent. The result arrived at was necessarily speculative and conjectural. The jury were limited to an award for damages or compensation for the actual, not the possible loss, and from the evidence there is no way of determining that the sum awarded was necessary to compensate for the real injury done, or that the acts of the under-tenant were the proximate cause of so much damage. There was nothing in the proofs, presented on the trial of this action to warrant the damages allowed to the plaintiff and awarded by the verdict of the jury.

Before Sedgwick, Ch. J., Freedman and McAdam, JJ.

Decided May 2, 1892.

Statement of the Case by the Court.

The action is by the plaintiff, as the successor in interest of the landlord of No. 240 East 60th street, against the defendant as tenant, to recover damages, for a breach of the following covenant, contained in the lease of the premises “ that the defendant will at any reasonable hour in the daytime, permit the lessor or his agent to show the premises to such persons as he desires for the purpose of selling or leasing the same, and will permit the usual notice of ‘ To Let ’ to be posted on the premises there to remain without molestation.” The demise was for three years commencing May 1, 1886, and ending May 1, 1889. In November, 1888, the defendant vacated the" premises, and in the following February, he sub-let them from March 1 till May 1, 1889, to a Mrs. Worms, who refused to permit the plaintiff to exhibit the premises or put up the bill of “ To Let” provided for by the covenant. Mrs. Worms moved away on May 1,1889, and the premises remained vacant for about five months. They were worth about

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$75 per month, and the jury awarded the plaintiff $375 damages, being the rent for the time the premises were vacant. There was no evidence that the plaintiff could have rented the premises, except that to be inferred from the fact, that the defendant’s lessee, Mrs. "Worms, refused to show the premises to a person taken there to inspect them and saying she would not permit any person to examine them, and by her refusal to permit the bill of “ To Let ” to remain on the premises.

The defendant moved for a new trial, which was denied, and from the judgment and order denying said motion the defendant appeals.

Durnin & Hendricks, attorneys and of counsel, for appellant, argued:

I. It cannot be said that the proximate cause of the house remaining idle from the first of May, 1889, until the first of February, 1890, was the act of the defendant in refusing to allow the notice “ To Let ” to be placed upon the house or persons to inspect the same, or that the fact that the house remained empty was the natural result of such acts, and, therefore, no damage was shown and the motion to dismiss the complaint, either at the close of the plaintiff’s case or at the close of the whole case, should have been granted. Sedgwick on Damages, 8th edition, vol. 1, p. 56 ; Greenleaf on Evidence, 14th edition, vol. 2, § 256; Griffin v. Colver, 16 N. Y., 489 ; Baldwin v. U. S. Tel. Co., 45 Ib., 744; Parsons v. Saltus, 66 Ib., 92; Frye v. Maine Central, 67 Maine, 414 ; U. S. Tel. Co. v. Gildersleeve, 96 Am. Dec., 519 ; Ashe v. De Rosset, 72 Ib., 552 ; Wulstein v. Mohlman, 57 Supr., 50-57 ; Allen v. McConike, 124 N. Y, 342 . In Griffin v. Colver, 16 N. Y., 489 , one of the leading cases in this state, at page 49, the rule is laid down as follows : “ The damages must be such as may fairly be supposed to have entered into the contemplation of the parties when they made the contract, that is, must

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be such as might naturally be expected to follow its violation; and they must be certain, both in their nature and in respect to the cause from which they proceed. The familiar rules on the subject are all subordinate to these. For instance : That the damage must flow directly and naturally from the breach of contract, is a mere mode of expressing the first; and that they must be not the remote but proximate consequence of such breach, and must not be speculative or contingent, are different modifications of the last. These two conditions are entirely separate and independent, and to blend them tends to confusion, thus the damages claimed may be the ordinary and natural, and even necessary result of the breach ; and yet if in their nature uncertain they must be rejected, as in the case of Blanchard v. Ely, where the loss of the trips was the direct and necessary consequence of the plaintiff’s failure to perform. So they may be definite and certain, and clearly consequent upon the breach of contract, and yet if such as would not naturally flow from such breach, but for some special circumstances collateral to the contract itself or foreign to its apparent object they cannot be recovered ; as in the case of the loss by the clergyman of his tithes by reason of the failure to deliver the house.” In Allen v. McConike, 124 N. Y. R., 342, at page 347, the court says : “ The general rule for determining the amount of damages recoverable for the violation of a contract or the breach of a duty is that the injured party is entitled to such as are the natural (or to be apprehended) direct and immediate results of the breach (Grffin v. Colver, 16 N. Y., 489 ; Hamilton v. McPherson, 28 Ib., 72; Hadley v. Baxendale, 9 Exch., 341). This rule is subject to the qualification that if the person injured thereafter negligently suffers his loss to be enhanced the increase so occasioned cannot be recovered from the person who first violated his contract or duty, and in some cases it is incumbent on the person

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damnified to take suck active measures as he reasonably may to minimize the damages naturally flowing from the breach. Hamilton v. McPherson, 28 N. Y., 72 ; Johnson v. Meeker, 96 Ib., 93-97 ; 1 Suth. Dam., 148; 1 Sedg. Dam., 7 ed., 56; May Dam., 86.

H. “ Damages for breaches of contract are only those which are incidental to, and directly caused by the breach, and may reasonably be presumed to have entered into the contemplation of the parties,” that a lessee should be liable for a breach of a covenant like the one in the case at bar. During the period after the lessor has taken possession and until the premises are again rented cannot reasonably be presumed to have entered into the contemplation of the parties. Hamilton v. McPherson, 28 N. Y., 72 ; Cases cited, supra. (1.) There is no evidence that any one was willing to take the premises from May 1, 1889, the property certainly could not have been occupied by any tenant while the mechanics were there repairing. It took about three weeks to make the repairs, and the exception to the judge’s charge that the measure of damages was the reasonable rental value from May 1,1889, until the premises were rented is well taken. (2.) The exceptions to the refusal to charge are also well taken. The plaintiff did not attempt to post the notice “ To Let ” after February 1, 1889, but acquiesced in the occupant’s refusal to allow them to do so.

Stewart & Sheldon, attorneys, and Samuel H. Benton of counsel, for respondent, argued :

I. The court did not err in refusing the motions to dismiss, made on the ground that there was no proof that the failure to rent was the result of defendant’s acts. We assume that the motion was directed to the point that the evidence did not show a connection between the injury and the damage. The motion to dismiss was renewed at the close of the testimony “ on the ground

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that there is no evidence in the case upon which a verdict of the jury can be based against the defendant. That there is no proof of damages and on the ground that if the case be submitted to the jury it will be speculative as to the amount of damages.” The question here is, is this a case of injuria sine damno (Sedgwick on Damages, § 32), or of injuria resulting in damage ? That is, does the damage proved by the plaintiff result from the wrong of the defendant. The wrong is admitted. The only denial is that it caused the damage. The defendant cannot set up as an answer to the action the bare possibility of a loss if his wrongful act had never been done. Davis v. Garratt, 6 Bingham’s Reports. This was the famous case where a cargo of lime was damaged by a tempest, the defendant having deviated from the course agreed upon. The defence was that no damages were proved, because the cargo might not have been brought safely to port in good condition had the deviation not taken place. The defence was held bad. Tendal, Ch. J., said : “ No wrongdoer can be allowed to apportion or qualify his own wrong ; as a loss has actually happened whilst his wrongful act was in operation and force, and which is attributable to his wrongful act, he cannot set up as an answer the bare possibility of a loss if his wrongful act had never been done.” This principle was adopted in Drucker v. Manhattan Ry. Co., 106 N. Y., 157 . The court say, at page 164: “ But when all the proof which, in the nature of the case is fairly possible has been given, the good sense of a jury must provide the answer, and it is no defence that such judgment involves more or less of estimate and opinion having very little to guide it. That criticism has no force in the mouth of the wrongdoer when all reasonable data have been furnished for consideration.” It has never been held in this state that in an action for breach of contract it must be shown with absolute certainty that the damage resulted from the breach, and

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could have proceeded from no other acts. Hexter v. Knox, 63 N. Y., 561 ; Mayers v. Burns, 35 Ib., 269; Van Wyck v. Allen, 69 Ib., 61; Parks v. Morris Ax Co., 54 Ib., 586. In Van Wyck v. Allen cabbage seed sold were warranted to be of a particular kind. When sowed they produced an inferior crop. Held that the damage was the difference in the value of the crop raised and that which would have been raised if the seed had been according to warranty. The objection was made in this case that it by no means followed that if the defendant had obtained the original seed he would have raised any crop at all; but the court took the view that as the vendor had broken his contract he could make no such defence, and it was not incumbent upon the plaintiff to prove absolutely, what was clearly impossible, that he could have raised and sold a crop from the seed contracted for. In Parks v. Morris Ax Co., 54 N. Y., 586 , bad steel was sold to the plaintiff, who manufactured it into axes. Held, that his damage was the difference between the value of the manufactured product and what its value would have been had he received good material from the defendant. The rule as to what damages can be recovered for breach of contract is well laid down in Allen v. McConike, 124 N. Y., 342 . The court say at page 347, “ The general rule for determining the amount of damages recoverable for the violation of a contract or the breach of a duty, is that the injured party is entitled to such as are the natural (or to be apprehended), direct and immediate results of the breach.” Citing, Griffin v. Colver, 16 N. Y., 489 , and other cases. It is certainly the direct and natural result of refusal to allow the premises to be seen that no one would rent them. The contract was made to give an opportunity for renting the premises in the ordinary way, and the parties clearly had in mind this object. They drew the contract so that the right to show the premises might exist, and a remedy be afforded

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for a failure to comply therewith. It would probably surprise a plain man to be told that where a tenant had made a contract to allow the-premises to be billed “To Let ” and shown to applicants,' and then refused to permit these things, and the property remained unrented thereafter, although the landlord diligently attempted to rent the same, that the vacancy was not produced by the refusal to allow the premises to be shown. The burden of proof was on the defendant to show, that the failure to let did not proceed from his acts, the plaintiff having proved diligent effort to rent the premises.

' II. The verdict was clearly in accordance with the evidence. It does substantial justice, and the judgment should be affirmed. The case was tried with great liberality towards the defendant by the court. The complaint alleged breach of contract by failure to allow the premises to be billed and .shown to persons desiring to rent. The only defence, was a denial, no special defence being set up. Notwithstanding this fact, the court allowed the defendant to give evidence of attempts to rent the premises and to furnish a tenant to the plaintiff long prior to the breach alleged.

Liability for breach of covenant is less extensive than that for a tort, and involves only such consequences as are the direct and proximate result of the act complained of. There are certain arbitrary rules in regard to such breaches, the principal of which is to give compensation for what is actually lost, to make the damages correspond with the real injury sustained, but not to permit a recovery where the loss cannot be directly traced to the act done or omitted. It will be sufficient if the injury is a natural or necessary consequence of the act, but remote or merely possible consequences are excluded from consideration. There are many cases of loss for which the law affords no adequate remedy, hence has arisen the system of pre

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ventive justice administered in the courts of equity, by means of injunction to restrain breaches of covenant. Covenants not to sub-let or assign have not generally raised any question of damage, but one of forfeiture (3 Sutherland on Dam., 143), owing to the difficulty in establishing any legal measure of compensation for the breach. The question involved here is much like that suggested. There is no reasonable certainty that the plaintiff would have let the house if the covenant said to have been violated had been literally performed. Sometimes the condition of the inside of a house is more uninviting than the outside, and an inside examination (if one had been afforded) might have repulsed the applicant for the house at once. There was therefore no solid substantial basis on which the jury could find as matter of fact that the refusal to perform the covenant was the sole cause of keeping the plaintiff’s house idle for five months, and that the plaintiff as a consequence lost so many months’ rent. The result arrived at was necessarily speculative and conjectural. If the action had been founded on tort, instead of upon contract, a more liberal field for the exercise of discretion would haAre been afforded to the jury, but they were limited in this case to the awarding of compensation for the actual, not the possible loss, and there is no way of determining from any of the evidence adduced that the sum awarded was necessary to compensate the real injury done or that the acts of the undertenant were the proximate cause of so much damage. It is owing to the impossibility to arrive at a legal measure of damages with any sufficient degree of certainty that courts of equity .entertain jurisdiction in such cases {Pom. Eq., § 1403), and by writ of injunction in the nature of specific performance enforce the terms of the covenant. This could have been done here by enjoining the defendant and his tenant from preventing the plaintiff putting up the bill of “To Let ” or from interfering with it after it was put up, or

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from exercising its right of showing the premises during some reasonable hour of the day to be determined by the court, and best calculated to serve the object of the covenant and the convenience of all concerned. The court gives specific performance instead of damages when it can by that means do more perfect and complete justice, and the covenant sought to be compensated by damages, could have been more effectually enforced at the time with perfect and complete justice in equity, than it can now by the uncertain character of proof available in an action at law for compensatory damages.

A man who enters into an agreement is bound in equity to a true and Hteral performance of it. He cannot be suffered to depart from it at pleasure, leaving the other party to his remedy for damages by law. Kerr on Inj., 534. It is no answer to say that the act complained of will inflict no injury on the plaintiff, or will be even beneficial to him. It is for the plaintiff to judge whether the agreement shall be preserved as far as he is concerned, or whether he will permit it to be violated. lb., p. 533. There is no wrong without a remedy, which means its appropriate remedy, and where that is to be found in equity it should be sought for there, or the plaintiff may be referred to Injuria absque damno or some other maxim which may defeat his recovery at law. There was nothing in the proofs presented to warrant the damages allowed to the plaintiff, and for this reason, the judgment and order appealed from must be reversed and a new trial awarded, with costs to the appellant to abide the event.

Sedgwick, Ch. J., and Freedman, J. concurred.