Case Name: James B. Hall, Respondent, v. Ernest Ochs, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1898
Citations: 34 A.D. 103
Docket Number: 
Parties: James B. Hall, Respondent, v. Ernest Ochs, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 34
Pages: 103–106

Head Matter:
James B. Hall, Respondent, v. Ernest Ochs, Appellant.
Landlord and tenant — a surety on a lease not discharged by the lessees death, nor by a failure to present the claim against his estate, nor by a change of occupation, nor by a violation of a covenant against subletting—authority of the president of a corporation to bind it •— liability of a corporation upon a guaranty iohich, because of the identity of the names, is, on its face, the individual obligation of its president.
A surety for the due performance of the covenants of a lease on the part of the lessee is not discharged from the obligation thereby assumed by the death of the.lessee, nor by a neglect to present a claim covered by the obligation of such surety against the estate of the deceased lessee, nor by the lessor’s assent to a change in the occupation of the premises, especially where it is mutual and has resulted in a reduction of the surety’s liability, nor by a violation of a covenant in the lease against "subletting, where the surety, a corporation, has consented to such subletting, and was clearly benefited thereby.
The authority of the president of a corporation to bind the corporation by acts within the scope of his apparent authority may be implied from' the adoption or recognition of his acts by the corporation or its directors or trustees.
Semble, that a corporation is liable upon a guaranty which appears upon its face to be the individual obligation of its president, and has a wafer instead *of the corporate seal attached, where it is admitted that the president of the corporation, whoso name was identical with that of the • corporation, intended to bind the corporation, and it appears that he was authorized to do so.
Appeal by the defendant, Ernest Ochs, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 23d day of April, 1898, upon the verdict of a jury, witli notice of an intention to bring up for review upon such appeal an order entered in said clerk’s office on the 22d day of April, 1898, denying the defendant’s motion for a new trial made upon tlie minutes.
Charles L. Pashley, for the appellant.
Josiah T. Marean, for the respondent.

Opinion:
Woodward, J.:
. The plaintiff herein is the owner of certain premises used for a saloon on Atlantic avenue, in the borough of Brooklyn, and the defendant is a domestic corporation engaged in. the manufacture and sale of malt liquors, its corporate name being identical with that of its president.
In March, 1895, the plaintiff executed a lease in writing; whereby he demised unto one Patrick Casey the premises above mentioned for a term of five years; beginning May 1, 1895, at an annual rental of $2,160 for the first two years and $2,400 for the last, three years of said term, payable in equal monthly payments. The lease contained a covenant against assignment and underletting without the consent of the lessor, and attached to it was the written guaranty reading, in part, as follows: ,
"In consideration of the letting of the premises I,Ernest Ochs, of the city of Brooklyn, do hereby covenant and agree, to and with the party of the first part above named and his legal representatives, that if default shall at any time be made by the said Patrick Casey in the payment of the rent and performance of the covenants above contained on his part to be paid and performed, that I will well and truly pay the said rent, or any arrears thereof, that may remain due unto the said party of the first part, and also all damages that may arise in consequence of the non-performance of said covenants, or either of them, without requiring notice of any such default from the said party of the first part.
" Witness my hand and seal this eighth day of April, in the year of our Lord one thousand eight hundred and ninety-five.
"Witness, BEHEST OCHS. [Seal.]
" John Steil."
The seal was a wafer and not the corporate seal of the defendant.
The lease was twice assigned, notwithstanding the covenant .against assignment, first, two days after its execution, by " Patrick Casey to Ernest Ochs, individually; " - and, second, on November 13, 1896, by Ernest Ochs, individually, to II. B. Scharmann & Sons. Patrick Casey occupied the premises and paid the rent until his death, in January, 1897. Then his son took possession, and Scharmann & Sons, the assignee, paid for him the rent, stipulated in the lease, up to June 1,1897, when one Philip J. Reilly took possession, under an arrangement with Scharmann & Sons, and paid the rent for Juné and July to the plaintiff. After July the premises became vacant, default was made in payment of the rent for August and September, and the present action was brought upon the above guaranty to recover the rent due for the said months.
At the trial it was admitted by the defendant that its president, in signing the guaranty, intended to bind the corporation, and that this was the understanding of the parties, notwithstanding the individual character of the instrument, is clear. The jury found that the president of the defendant was authorized to sign the guaranty, and that there had been no release or surrender of the lease. They rendered a verdict for the plaintiff for the full amount of two months' rent, and from the judgment entered thereon, and from an order denying a motion for a new trial, the defendant appeals.
The appellant's first point is clearly untenable, and the cases cited by counsel -furnish no support to his novel proposition that the surety was released by the death of the principal. This court, in Holthausen v. Kells (18 App. Div. 80),. Mr. Justice Willard Bartlett delivering the opinion, held that in the case of a guaranty of a lease the consideration was given once for all, and that the guaranty did not cease upon the death of the guarantor. This case was affirmed, on the opinion below, by the Court of Appeals (154 N. Y. 776), and the reasoning of it applies to the case at bar.
Hor does a neglect to present the claim against the estate of the deceased principal release the surety. (Sibley v. McAllaster, 8 N. H. 389 ; Villars v. Palmer, 67 Ill. 204.)
The second point advanced by the appellant is that plaintiff's assent to the changes in occupation discharged the guarantor. As such assent must be considered to have been mutual, and as it resulted in a reduction of the guarantor's alleged liability by just so many months' rent as the new parties paid, it seems that the point is not well taken.
The jury were justified in finding that there was no release. There was no surrender in. writing and none by operation of law.. Even though third persons.entered and paid rent to the landlord, after the original lessee quit the premises, the original lease remained, in force. (Schieffelin v. Carpenter, 15 Wend. 400.)
With regard to the violation of the covenant against subletting,, it is sufficient to say that the. defendant, through its presidént, consented to such subletting, and was clearly benefited' thereby. ISToratification of the guaranty was needed if the latter was valid ah'initio and defendant consented to the changes.
The appellant's counsel further contends that the execution, of the-guaranty was not authorized and that the agency was not properly proved. But the jury have found that the defendant's president, acted within the scope' of his apparent authority,.and it is settled, doctrine in America that the appointment of an agent may bo inferred and implied from the adoption or recognition of his acts by the trustees and directors, or by the corporation. (Bank of the U. S. v. Dandridge, 12 Wheat. 64; Danforth v. Schoharie & Duanesburgh Turnpike Road, 12 Johns. 227.) In the former case, Mr. Justice Stout (at p. 70) said: " If officers of the corporation openly exercise a power which -presupposes a delegated authority for the-purpose, and other corporate acts show that the corporation must have contemplated the'legal existence of such authority, the acts of' such officers will be deemed, rightful, and the delegated authority: will be presumed."
In fact, the largest class of cases of agency is that which relates to-trade affairs, where the agency is proved by inference, from the: habit and course of dealing between the parties. Juries have frequently been advised to infer the grant of authority from the course: of conduct and dealing adopted by the principal." (2 Greenl. Ev.. [15th ed.] § 65.)
That a similar contract was not ultra vires was decided by this; court in Holm v. Claus Lipsius Brewing Co. (21 App. Div. 204). To the same effect is Koehler & Co. v. Reinheimer (26 id. 1).
The judgment should be affirmed.
All concurred.
Judgment and order affirmed, with' costs.