Court Opinion

ID: 5418984
Source: CourtListenerOpinion
Date Created: 2022-01-08 16:23:59.243607+00
Date Added: 2024-06-11T08:31:09.073525
License: Public Domain

Bijur, J. (dissenting):
This is an appeal by plaintiff from a judgment in favor of defendant on its counterclaim. Many of the details which I do not consider material to the present controversy will be found in a previous opinion of this court by Lehman, J. (105 Misc. 185). Some review of the facts, however, is necessary since there are items not referred to in that opinion because not material to the question then under consideration.
On July 27, 1907, the Wilkesbarre Grand Opera House Company, to which I shall refer as the Opera House Company, leased to *376plaintiff for a term of years with an option for renewal the opera house owned by it in the city named. The lease contained a provision against assigning or subletting without the written consent of the lessor; also a clause to the effect that the lessor would make all necessary repairs at its expense. In 1909, by resolution of the stockholders of the company, the option was extended to September 10, 1919, and the right awarded to sublet to such persons as might be approved by the board of- directors who in turn were required to carry the resolutions into effect. The directors acted accordingly, naming the defendant as the proposed sublessee. Thereupon, on July 7, 1909, plaintiff executed to the defendant a sublease of the premises to be used for the purpose of a theatre. The sublease provided in part that “ the lessor (plaintiff) is under no obligation to make changes, additions or repairs.” Also that “ The lessor hereby covenants and agrees in no manner or form to interfere with the conduct of the business or management of the lessee herein.” The term of this sublease ended on September 10, 1919. Simultaneously therewith plaintiff and defendant executed a collateral agreement, reference being made therein to the sublease and to the lease of the Opera House Company to the plaintiff. This collateral agreement provided for a payment by the defendant of $5,000 per annum in addition to the rent reserved in the sublease, which was $66 per annum, and described such payments as “ in the nature of compensation awarded to the party of the first part [plaintiff] for the transfer of her rights and interests in the said premises to the party of the second part [defendant].” In an earlier part of the agreement the sublessor (plaintiff) agreed to exercise the options awarded to her by the Opera House Company for the full period, namely, until September 10, 1919, covered by the sublease. Both the sublease and the collateral agreement are rather verbose. The purpose of this rather complicated set of papers is not very clear, but I have no doubt as to their legal effect, and as to the respective rights and obligations of the parties in the situation which subsequently arose. In September, 1916, the appropriate State and city officials notified the defendant’s manager that the balcony of the theatre was unsafe and required reconstruction. Defendant brought this letter forthwith to the attention of plaintiff’s husband, who at the time was acting as her representative and who was also president of the Opera House Company. He in reply said that it was the duty of the defendant to do the repairing. At or about that time plaintiff consulted counsel in regard to the matter and was advised to, and did, maintain that position. Defendant, standing upon its rights, refused to make the repairs and the building was thereupon closed by the authori*377ties, and defendant forthwith removed its effects. This court has held, on the previous appeal, that under those circumstances defendant was not liable to plaintiff for subsequent rent. The present appeal is from a judgment in favor of defendant on its counterclaim for expenditures incident to its removal from the premises.
Plaintiff’s chief contentions are, first, that she was under no obligation to defendant whatsoever in respect to the matter of the reconstruction of the balcony, and that, consequently, no recovery against her by reason thereof can be sustained, and second, as a matter of practice and pleading that the judgment awarded can be sustained by defendant only on a theory not presented by the pleadings. Plaintiff urges that its first claim is sustained by the opinion of this court on the prior appeal, and quotes at length from the language of the opinion at pages 200 to 201, the substance of which, according to plaintiff, is that she did not “ assume any affirmative obligations as landlord.” I do not so interpret the opinion. Read in their context these words were intended merely to express the view of this court that plaintiff was under no obligation herself to make the repairs, a conclusion which defendant concedes. The classic warning of Marshall, Ch. J., in Cohens v. Virginia (6 Wheat. [U. S.] 264, 399) 'against interpreting the general language of an opinion apart from the facts to which it applies may well be supplemented by the consideration that such interpretation must also take into account the arguments of counsel toward which it is directed. Indeed, I think that the opinion was not only intended not to indicate that plaintiff was without fault or obligation in the premises but under the circumstances disclosed I cannot understand how defendant could have been relieved from its obligation to pay rent to plaintiff without leading to the inevitable conclusion that the latter was at some fault and had failed in some obligation toward the defendant.
I return then to a consideration of the legal relation of the parties at that time. Since plaintiff by her own lease from the Opera House Company was forbidden to assign and that fact was known both to her and to defendant, it is quite evident that it was the intention of all the parties that the instrument which she executed to defendant should be a sublease. Indeed, it is rather difficult to conceive of any doubt as to the nature of the instrument under those circumstances, and if there were any, it would be removed by the fact that the lease provided for the payment of the rent to plaintiff, that it was always so collected and that in this very action plaintiff sued for such rent.
In the collateral agreement (which seems to have been devised *378for the purpose of enabling plaintiff to receive a bonus or additional payment almost equivalent to the rent itself) plaintiff undertook to exercise the option to extend the lease from the Opera House Company for a term already covered by the sublease itself, and, as phrased by this court: “ The plaintiff evidently attempted to transfer to the defendant her rights under her own lease from the Opera House Company, and that included the right to look to the owner to make the repairs.” Since plaintiff, however, to the knowledge of all the parties was by the terms of her lease forbidden to assign the same she could not assign any of its covenants in her favor. The result of the collateral agreement, therefore, was to obligate plaintiff to make available to defendant the other covenants in her favor in the opera house lease precisely as she made available to them her right to exercise her option for an extension of the term. Defendant, of course, could not itself avail of the option because the agreement therefor ran exclusively to the plaintiff. Similarly, the covenant to repair was an unassignable contract between the Opera House Company and plaintiff. If defendant thereafter found it necessary or advantageous to avail of either it could do so only through and at the hands of plaintiff. Nevertheless, while plaintiff readily exercised her option for the extension, she not only declined to require the necessary repairs to be made, but asserted, on appropriate demand being made, that the defendant was bound to make them itself. This to my mind constituted a clear breach of her collateral agreement and warranted a recovery of damages therefor.
Although I do not deem it material to the cause of action herein-above sustained in favor of defendant, it is at least significant of what was in the minds of the parties throughout these transactions, that plaintiff was the owner of about sixty per cent of the stock of the Opera House Company; that her husband and representative in these transactions was its president; and that in the previous dealings in reference to the defendant’s sublease the stockholders undertook to require the directors to act as they did. From this it seems to me to follow with a fair degree of certainty that had plaintiff upon defendant’s request demanded that the Opera House Company make the repairs forthwith that result would have followed without delay and the present controversy have been avoided.
Plaintiff’s contention that the cause of action which I have explained is not so set forth in the counterclaim is not without justification. The counterclaim, which repeats the allegations of the separate defense alleges that the plaintiff herein in breach of the covenants and conditions in the lease on her part to be *379performed, and in breach of the plaintiff’s duty under the lease to make all substantial and structural repairs, failed and neglected to comply with the requirements mentioned in the preceding paragraph, which related to the notice from the public authorities. It is true that by a very strict construction it might be possible to read these allegations as imputing to plaintiff the breach of an obligation to make, on her own responsibility, the repairs referred to rather than defendant’s claim upon the trial and upon this appeal that the breach of her obligation and duties consisted in her failure to exercise her right to compel the Opera House Company to make these repairs. The distinction, however, at best is a very nice one. I make free to assume that in the interest of precision in pleading and in formulating issues defendant might in the case of a jury trial have been required to amend its pleading before proceeding, although there would be little if any change in the material evidence offered in the one case rather than the other. But this trial was before a referee; all the facts were fully brought out; all the witnesses were available and there was no claim of surprise in that respect. Under the circumstances, thus disclosed it seems to me that it would be an adherence to bare form rather than an appreciation of the substance of the cause to reverse this judgment in order to enable defendant to insert in a pleading the statements as to the precise basis of its claim for damages which it had made repeatedly during the course of hearings, which lasted from January 31, 1921, to June 24th of the same year. In support of his contention that he be permited to inquire concerning plaintiff’s control over the Opera House Company by ownership of stock, defendant’s counsel, interpreting to the referee the previous opinion of this court as he understood it, said, at the hearing of February eighth: “ All of which, in my judgment, goes to show that if she, who held for us the right to require the Wilkesbarre Grand Opera House Company to make the repairs, instead of so requiring those repairs to be made, actually prevented them from doing it so as to throw on us the entire burden of these repairs and the risk of their being made, then she is responsible for this eviction and it was a breach of duty on her part because she owed us the duty to make good on her obligations, one of which was to require this landlord to make these repairs for the defendant.” The point is emphasized by the fact that as early as the hearing of February seventeenth plaintiff, over her counsel’s objection as not within the issues, was interrogated and testified categorically that she sent no written notice and made no demand on the Opera House Company to make these repairs.
*380Plaintiff’s further general contention in her brief on this appeal that the evidence did not warrant the judgment, is, I think, wholly without merit. The findings of fact made by the referee are not only fully supported by the testimony, but are in my opinion the only result which could have been arrived at thereon.
The motion for reargument should, therefore, be denied.
Motion for reargument granted, and upon reargument, order of this court dated November 11, 1924, vacated, judgment reversed, with costs, and judgment directed for plaintiff dismissing the counterclaim, with costs.