Court Opinion

ID: 5211362
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:13:26.648125+00
Date Added: 2024-06-11T08:27:22.495290
License: Public Domain

Kruse, J.:
The primary question involved in this controversy is whether upon the termination of the lease under the 7th paragraph thereof, for non-payment of the rental, the buildings belonged to the lessor, the plaintiff power company.' If so, the further question is presented as to what part of the salvage left after the burning of the buildings and plant is a part of the buildings within the meaning of the provisions of the lease and agreement.
As regards the latter question, the careful and exhaustive deci*447sion, supplemented by the opinion of the learned trial judge (60 Misc. Rep. 209), makes it clear just what items of the salvage were allowed, and their relation to the buildings^ and I think the conclusion there reached is correct, and that the amount recovered is none too large, unless, of course, the defendant is right on the main question.
It is contended on behalf of the'defendant that the provision contained in the 16th. paragraph, which provides that if the lease is terminated prior to November 15, 1909, the buildings shall become and be the property of the lessor, relates to the termination of the lease by the lessee, under the option given it by the 15th paragraph, and that it was not intended to vest the title to the buildings in the lessor, where the lessor itself terminates the lease for a default in the payment of rentals. It is unnecessary to state the arguments ■urged by counsel for the respective parties for and against this contention.
It seems to me that the language of the 16th paragraph does not admit of the construction contended for by the defendant. It is there explicitly provided that in case the lease is terminated prior to November 15, 1909, the buildings shall become and be the property of the lessor, and the right there given to the lessee, of removing the buildings, is subject to the qxpress exception and condition that all rental has been paid; and it is even provided that after November 15, 1909, the buildings or machinery shall not be removed from the premises unless all rents have been paid. It was entirely competent for the parties to contract that any or all of the property placed upon or attached to the premises should belong to the lessor upon the termination of the lease. Indeed, if there had been no express agreement in that regard, I think the buildings, constructed as they were of masonry and other material of a substantial nature, and permanently attached to the land, would have become a part thereof, and that the lessee would not have had the right to remove the same in the absence of any agreement giving him that right.
Counsel for the defendant argues that the interpretation contended for on behalf of the plaintiff should not prevail, because .the effect thereof would be to impose upon the lessee a forfeiture of its property, which should be avoided. Assuming that the provision for a termination of the lease is a forfeiture and not a (Conditional *448limitation, as was held by the trial. court, it is not unconscionable, and its enforcement does no injustice to the lessee or its successor in interest, the defendant, since it was only necessary to pay the rent within the time after service of notice as provided by the lease, to avoid the effect of the provision. And it may be that the defendant could pay such past-due rent, even after that time, and be relieved from the effect of such default upon making a proper case for equitable relief. But no such relief was sought and is, not now asked, perhaps for the reason that the defendant trustee does not feel warranted in paying'the past-due rent and holding the property under the terms and conditions of the lease.
If the only effect of this 16th paragraph, as regards the rights of the lessor in the buildings when the lease is terminated for the nonpayment of rent, is that of a chattel mortgage, as contended on behalf of the defendant, then I think the failure to file the mortgage, as the statute provides, makes the mortgage invalid as to creditors, and that the defendant, being h trustee in bankruptcy of the creditors, may successfully attack the mortgage upon that ground. (Skilton v. Codington, 185 N. Y. 80.)
But I think to so interpret that paragraph would do violence to the plain and explicit language of the agreement. Such agreements as this are not uncommon between lessor and lessee, as will be seen by reference to the American and English Encyclopedia of Law, where the cases are collated (13 Am. & Eng. Ency. of Law [2d ed.], 655-673), and they should receive a fair and reasonable interpretation.
The judgment should be affirmed, with costs.
All concurred, except McLennan, P. J., who dissented.
Judgment affirmed, with costs.