Court Opinion

ID: 5845769
Source: CourtListenerOpinion
Date Created: 2022-01-12 23:45:14.184166+00
Date Added: 2024-06-11T08:43:54.902628
License: Public Domain

Fein, J. (dissenting).
The pertinent facts are fairly stated in the majority opinion.
In my view the threshold issue determinative of this *402appeal is whether a binding and enforceable contract, in this case a lease between a landlord and tenant, came into existence prior to the landlord’s attempt to include in the lease a provision permitting the landlord to terminate the lease on 90 days’ notice pursuant to the filing of an offering plan for conversion of the building to co-operative ownership authorized by subdivision 7 of section 61 of the Code of the Real Estate Industry Stabilization Association of New York City (Code).
A bilateral contract which is required to be in writing becomes an enforceable agreement when it is evidenced by writings signed by both parties. It is not essential to validity that the signatures of both parties be appended to one instrument so long as the writings accurately identify the parties and reflect and contain all of the pertinent terms of the agreement. A letter offer and a letter acceptance will suffice (Sanders v Pottlitzer Bros. Fruit Co., 144 NY 209). Although as the majority notes, the Statute of Frauds (General Obligations Law, § 5-703) is not at issue here, this principle applies even where the statute is applicable. To satisfy the statute the instrument or instruments relied upon need only be signed by “the party to be charged”. It is now sought to impose upon the tenant a provision he never agreed to, when he signed the instrument (see Geraci v. Jenrette, 41 NY2d 660; Genesee Mgt. v Del Bello, 60 AD2d 779).
Here, as required by the Rent Stablization Law of 1969, as amended (Administrative Code of City of New York, tit YY) and section 60 of the Code, the landlord prepared a proposed lease and forwarded it to the tenant with a letter signed on behalf of the landlord constituting an offer. It was no less an offer in contemplation of law because the landlord of the rent stabilized apartment was required to make such offer. The majority suggests that the letter was merely a form letter of transmittal. That it was an offer is clear from the text of the letter, and from the mandatory language of section 60 of the Code: “Every owner shall notify the tenant in occupancy not more than 150 and not less than 120 days prior to the end of the tenant’s lease term, by mail, of such termination and offer to renew the lease at a rent not in excess of the stablization rent permitted *403for each renewal lease and otherwise on the same conditions as the expiring lease, and shall give such tenant a period of 60 days to renew such lease and accept the offer”.
This was the only communication from the landlord to the tenant. Within the time limit the tenant accepted the offer by executing the lease and returning it to the landlord together with the additional security required because of the rent increase. Thus, by ordinary principles of contract law, an enforceable contract was created (Richards v Levy, 40 AD2d 1055). There was a written offer and a written acceptance. It is undisputed that the terms were the terms offered by the landlord, and it is undisputed that the tenant accepted them. It is equally undisputed that it was then the intention of both parties to enter into a binding lease on those terms and conditions. The failure of the landlord to execute and return an executed copy of the lease to the tenant could not terminate the contract thus made between the parties (Century Operating Corp. v Prince, NYLJ, March 6, 1978, p 11, cols 1-2 [Bloom, J.], affd 66 AD2d 1032; Beach Haven Apts. No. 6 v Levy, 103 Misc 2d 747). Nor could the landlord’s subsequent unilateral insertion of a Code (§ 61, subd 7) provision impair the obligations of the existing contract. Queens Bonnie Co. v Brittain (40 AD2d 876) cited by the majority is distinguishable. There the landlord inserted a tax escalation clause in the leases after their execution by the tenants and sent them back to the tenants signed by the landlord. The tenants paid the tax the first year but refused to pay the higher tax the next year. The court held that the landlord’s action was a “counter offer” accepted by the tenants. There was no such acceptance here.
219 Broadway Corp. v Alexander’s, Inc. (46 NY2d 506) relied upon by the majority, is not to the contrary. In that case the tenant executed a proposed lease purporting to embody a prior oral agreement between the parties. The tenant forwarded that lease to the landlord who failed and refused to deliver an executed copy. The landlord then leased the property to another. The tenant sued, alleging in its complaint upon information and belief that the landlord had “executed the said lease” and hence there was *404an enforceable agreement. On a motion to dismiss the complaint for failure to state a cause of action, the Court of Appeals held that no cause of action was stated because plaintiff failed to allege and manifestly could not prove that there was a delivery of the lease by the landlord. Indeed, plaintiff’s very action was premised upon the failure to deliver the executed lease. The Court of Appeals ruled that since the fundamental purpose of a lease is to convey an interest in real property, it is requisite that a signed instrument be delivered by the landlord (46 NY2d, at p 512).
This has nothing to do with our problem. The issue here is not delivery. However, instructive for our purposes is the court’s statement (46 NY2d, at p 512) that it is enough if there be “acts or words or both acts and words which clearly manifest that it is the intent of the parties that an interest in the land is, in fact, being conveyed to the lessee.” It is undisputed here that the landlord signed the offer and transmitted it and the proposed lease to the tenant who signed and delivered the signed lease to the landlord. It is plain that what was intended was to convey an interest, in the land. The Court of Appeals expressly declined to deal with the problem here presented because there was no necessity to do so. The court stated (46 NY2d, at p 513): “Nor do we reach or consider the broad question whether, and in what circumstances, signature alone will suffice to create an enforceable contract.”
Relying upon the fact that the lease contains a signature place for both the landlord and tenant, the majority concludes that validity and execution depend upon signing by both parties where indicated, citing Scheck v Francis (26 NY2d 466). In that case the Court of Appeals stated: “It is well settled that, if the parties to an agreement do not intend it to be binding upon them until it is reduced to writing and signed by both of them, they are not bound and may not be held liable until it has been written out and signed.” (26 NY2d, at p 469-470.) However, in that case, it was clear that none of the contract documents had been signed., The letter relied upon was' merely a transmittal letter by one of the lawyers advising the parties as to the method and manner of execution if the agreements were proper in form and substance. However, where the parties *405have exchanged communications containing all the terms of their agreement, enforcement will not be denied because they intended to execute a more formal agreement (Sanders v Pottlitzer Bros. Fruit Co., 144 NY 209, supra; see Matter of Municipal Consultants & Publishers v Town of Ramapo, 47 NY2d 144).
In our case the letter from the landlord is not a transmittal letter by a lawyer. It is the offer executed on behalf of the landlord as required by the statute and the Code. Even if the statute and Code did not prescribe the form of the offer, the communication by the landlord would plainly be deemed a binding offer by ordinary contract principles. There was no need for prior oral agreement, as suggested by the majority. All the terms were included in the letter and proposed lease. There was nothing to negotiate. The acceptance creating a bilateral contract was the mailing of the lease bearing the tenant’s signature together with the deposit. This court has so held (Century Operating Corp. v Prince, supra; see, also, Beach Haven Apts. No. 6 v Levy, supra). In Century Operating Corp., the managing agent for the landlord mailed the tenant a renewal lease in conformity with prior oral negotiations. The covering letter requested the tenant to transmit a check for the increase in security. The tenant mailed an executed copy of the lease together with his check for the additional security to the agent. The lease was held to be enforceable although no executed copy was returned by the successor landlord who had acquired the premises in the interim.
It is bootless to argue that signatures by both the landlord and tenant on the lease proper are required because space is provided for such signatures. It is well settled that where a writing is required, either by statute or the understanding of the parties, the signatures are sufficient to bind if they are affixed to separate documents which clearly identify the transaction and contain all of the terms upon which the parties have agreed and indicate an intention to be bound (Crabtree v Elizabeth Arden Sales Corp., 305 NY 48; Scheck v Francis, supra). Only where there remains something to negotiate will integration be denied (Brause v Goldman, 10 AD2d 328, affd 9 NY2d 620; Sanders v *406Pottlitzer Bros. Fruit Co., supra). Nothing remained for negotiation when the landlord made the signed written offer of a renewal lease to the tenant. When the tenant signed and returned the lease there was an executed agreement. That there was a contract is demonstrated by “the objective manifestations of the intent of the parties as gathered by their expressed words and deeds”. (Brown Bros. Elec. Contrs. v Beam Constr. Corp., 41 NY2d 397, 399.) Nothing remained to be done to create a binding contract.
The landlord and the majority assert that well-settled principles require signing by both parties on the lease proper before there is an “executed” agreement. Schwartz v Greenberg (304 NY 250) cited by the majority does not so hold. There each party retained his own signed copy of the proposed agreement. Defendant refused to turn over his copy until after he had torn off his signature. Since there was never a delivery of a signed agreement, it was held there was no contract. This is in accord with the well-settled principle that where there is a delivery of a signed written offer and a signed written acceptance there is a contract. It has been “executed”. This is the lesson of Harvey v General Cable Corp. (1 AD2d 79, affd 2 NY2d 986) also cited by the majority. (See Newburger v American Sur. Co., 242 NY 134,144.) It is undisputed that this is what occurred here. Thus the discussion concerning the meaning of the word “executed” as that term is used in subdivision 7 of section 61 of the statute and the Code does not advance our analysis. The obvious intention of the regulation is to insure that no section 61 (subd 7) cancellation provision may be included in a lease after landlord and tenant have entered a binding agreement.
I concur with the majority that “[statutory language which is plan and unambiguous should be-construed in its natural and most obvious sense.” (Matter of Fullerton v General Motors Corp., 46 AD2d 251, 252.) A construction of the word “executed” which would ignore well-settled principles of contract law as to the execution of a bilateral contract would do violence to that principle.
It may well be that the Board’s determination that there *407was an executed agreement here is inconsistent with its prior determinations respecting the owner’s inclusion of a Code section 42 (subd [b]) rider after the tenant had signed the proposed renewal lease but before the owner had signed it. We are not now required or invited to pass on those decisions. In any event, they are not binding upon this court.
The majority asserts that if the landlord had merely mailed a notification of expiration and offer to renew and delayed a tender of a renewal lease containing the cancellation rider until after the submission of its co-operative plan to the Attorney-General and notice thereof to the New York City Department of Housing Preservation and Development, the landlord would be protected, even if the tenant had accepted the offer before receipt of the notice of inclusion of the 90-day cancellation order. I know of no authority to such effect and none is cited. Had a tenant in such circumstances accepted the offer to renew, there may very well have been a binding and enforceable agreement not subject to change by either party. We need not decide that issue today.
Thus we need not concern ourselves with the measure of deference to be accorded to an administrative agency’s construction of a statute or of its own regulations. The majority seems to suggest that there is a difference depending upon whether what is being administered is a statute or the agency’s own regulations. No authority is cited for this view. The same principle applies whether the agency is applying a statute it is required to administer or a regulation written by the agency.
Finally, I agree with the majority that section 60 should be recognized for what it is: in my view, a provision requiring a landlord to offer a renewal lease to stabilized tenants on the same terms and conditions as the expiring lease except for an increase in rent within fixed parameters, subject to acceptance by the tenant by execution of the tendered lease and payment of the increased security. To reject its plain meaning by a strained interpretation of the word “executed” in subdivision 7 of section 61 would ignore or reject a basic principle of contract law, the creation of a *408bilateral contract by the exchange of writings, a written offer and a written acceptance, subdivision 7 of section 61 is applicable only prior to the acceptance by the tenant. This interpretation does no violence to the statute and Code or to well-settled contract principles.
The majority, as does the landlord, seems concerned with the possibility that a different result might ensue with respect to vacancy leases. We need not decide that issue today, although I perceive no reason why the same rules should not apply.
Judgment, Supreme Court, New York County (Tyler, J.), entered October 24, 1980 dismissing the petition, should be affirmed.
Sandler, J. P., and Carro, J., concur with Sullivan, J.; Ross and Fein, JJ., dissent in a separate opinion by Fein, J.
Judgment, Supreme Court, New York County, entered on October 24,1980, reversed, on the law, without costs and without disbursements, and the petition granted.