Court Opinion

ID: 8801487
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:34:19.869853+00
Date Added: 2024-06-11T17:03:55.250774
License: Public Domain

HOUGH, Circuit Judge
(dissenting). The facts established below are unassailable here, and it was distinctly found that no fraud or wrongdoing existed on the part of the Lackawanna Company. This action is maintainable, however, only upon the ground of wrongdoing. The plaintiff below prefers to say that the “defense is inequitable”; but the phrase means wrongdoing by the defendant, if it means anything.
The situation presented is not complicated; the Sound Company procured a lease of certain New York City wharf property, and subleased a portion thereof to the Lackawanna Company. Later, and with the city’s assent, it assigned the entire lease to the Lackawanna. After such assignment the Sound Company had no title, estate or interest of any kind in the leasehold premises; but it had a personal contract with the Lackawanna Company, by which in consideration of said sublease and assignment, the latter agreed to pay the Sound Company certain moneys at stated intervals as long as ffie assigned lease was in existence, provided, however, that should the Lackawanna’s possession and enjoyment of the premises be “terminated by cause other than the default of” the Lackawanna Company, “no claim for damages (should) be made by either party against the other, except the cessation of such use and enjoyment be due to the default of” the Lackawanna.
The original city lease was made by and through the commissioner of docks, and contained a proviso that if at any time the city should “determine to proceed” with any improvement of the water front that required the use of the demised premises, a notice might be given terminating said lease “from the date of the receipt of such notice.” In form such notice was served, nor was it given as the result of any fraud or *317wrongdoing on the part of the Lackawanna. Yet judgment was directed, and could have been directed, only on the ground that there had been a default on the part of the defendant below; and this court has sustained such judgment because the notice given “was not justified either in fact or in law.”
xThe city was not called upon to justify its conduct in any way; it alone could decide whether the property was wanted for improvement; and, no matter what induced the city’s action, the notice itself was perfectly valid. If it had been procured by the Lackawanna for the purpose of terminating its own liability to the Sound Company, an action for damages would have lain under the proviso of the personal contract aforesaid; but such an intent is expressly negatived by the finding of the trial court.
It was proven that the city would probably not have decided to proceed with improvement, if it had not been assured of a'solvent tenant, viz. the Lackawanna Company; one that could pay for the improvements and work them out under a long lease of the improved property. Any person or corporation could have done this, and there is nothing in the contract forbidding the Lackawanna to take advantage of the city’s purpose and desire. Its conduct was not “unreasonable under the circumstances” — which is certainly the widest definition of default suggested. Re Woods, etc., Contract, [1898] Ch. Div. 211.
A reasonable and proper care for its own interest induced and justified the Lackawanna Company in seeking to be the city’s new tenant. Delaware, etc., Co. v. Bowns, 58 N. Y. 573, is entirely applicable.
For these reasons I dissent.