Court Opinion

ID: 5481515
Source: CourtListenerOpinion
Date Created: 2022-01-10 01:56:49.492223+00
Date Added: 2024-06-11T08:33:37.438289
License: Public Domain

Froessel, J.
(dissenting). The controversy in this case arises between a landlord and her tenant and revolves around their rights under a twenty-one-year lease and its renewal provisions. The original lease was made on April 5, 1927; the fixed annual rent reserved was $25,000; “ additional rents ” were also provided for. The tenant was given an option to renew for two further twenty-one-year periods, the options to be exercised at least one year prior to the expiration of each term. If the parties did not agree upon the renewal rent, arbitration was provided, with the proviso, however, “ that in any event the net annual rent for each renewal term shall be at least as much as the net annual rent reserved for the last year of the then current term.”' (Emphasis supplied.) That rent as fixed was $25,000 and, as we read the lease, that sum is what the quoted language means on this first renewal. Such language was obviously employed instead of the specific amount by reason of the fact that the original lease envisioned two renewal terms, and it was contemplated that the net annual rent reserved during the first renewal period might well differ from that under the original term.
Because the parties in 1942 modified the original lease “ so as to provide the rent at the rate of $12,000.00 per year during the said term instead of $25,000.00 per year ”, it is said that the annual rent for the first renewal period should be $12,000. We do not so interpret the writings, and conclude that ££ the net annual rent reserved for the last year ” of the original term refers to the basic rent under the original lease and not to the rent stated in the modification agreement. We agree with Special Term that plaintiff had unconditionally renewed the lease and that it was required to pay the annual rent of $25,000 for the renewal period ££ plus the additional rental specified in the lease ”. The Appellate Division likewise agreed “ that the option to renew was at $25,000 a year ”, but adopted the view that the ££ option was not exercised.” (277 App. Div. 978, 979.)
The modification agreement here merely fixed the annual rent *478for a limited period of time, namely, “ during the said term ” (the twenty-one-year term would expire in six years), and not for the renewal period. It expressly provided: “ Except as herein specifically provided, the aforementioned lease shall remain in full force and effect.” It is of course true that we search a writing to discover the intention which the parties have formulated in the written language, but that is not to exclude the circumstances surrounding its execution or the setting in which it was made (Wirth & Hamid Fair Booking v. Wirth, 265 N. Y. 214, 219; Utica City Nat. Bank v. Gunn, 222 N. Y. 204, 207).
The landlord here had voluntarily substantially reduced the rent of this tenant during the period of the depression and since 1932. In 1942 the tenant sought a written modification for the balance of the term. It should be noted that said modification was not drawn by the landlord’s attorney but by counsel for the tenant; at the time, the landlord was an old lady eighty years of age. It is utterly unreasonable to assume that after a landlord has voluntarily consented to a substantial reduction of rent over a period of years, to which the tenant was in nowise legally entitled, it may be said that she intended such reduction to be effective for a first renewal period of twenty-one years and for a probable second renewal covering a like period — forty-two years in all — and thus deprive herself of hundreds of thousands of dollars. Certainly, in the absence of language unambiguously and specifically so providing, we should not impute to the contracting parties a purpose so extraordinary and inequitable.
In 455 Seventh Ave. v. Hussey Realty Corp. (295 N. Y. 166) we were faced with a somewhat similar situation except that an increased rent liability was sought to be imposed upon a tenant. We there pointed out (pp. 171-172):
££ The lease stands as the basic contract of the parties which the modification agreement provides £ shall be and remain in full force and effect, excepting as modified by this agreement.’ * * * Had the parties sti desired, they could easily have stated in so many words that the additional rental in the modification agreement was to be deemed the rent reserved in the original lease for purposes of renewal. * * *
“ Since the question of rent was of major importance to both parties, and the modification agreement did not specifically *479change the basic formula for determining the renewal rental, that rental should be $150,000 [the amount reserved in the original lease, not in the modification.] ’ ’
Because that construction there happened to favor the tenant, we may not now change the rule if it favors the landlord. Whether the modification prescribes an additional or a lesser rent does not, in our view, alter the situation. That case is clearly applicable to the present situation. The tenant here was not obligated to exercise this option; it could have freed itself of all obligations if it had chosen to do so.
The judgment of the Appellate Division should be reversed and that of Special Term affirmed, with costs.
Loughran, Ch. J., Lewis and Conway, JJ., concur with Ftjld, J.; Froessel, J., dissents in opinion in which Desmond and Dye, JJ., concur.
Judgment accordingly. [See 302 A. Y. 940.]