Court Opinion

ID: 3596313
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:43:37.722027+00
Date Added: 2024-06-11T13:57:11.606559
License: Public Domain

I am for affirmance.
The one definite date in the minds of the parties to this lease was the date of the expiration of the term. About that there was no doubt; it was a fixed time. "At the end and expiration of the term hereby granted," says the lease, "either pay to the said party of the second part, her executors, administrators or assigns, the just and full value, at that time, of any building built and constructed in the manner hereinbefore mentioned, and in conformity with the covenants hereinbefore contained, which may be standing upon the said demised premises at the expiration of the said term, such value to be ascertained in the manner hereinafter mentioned or, at the option of the said parties of the first part, their successors or assigns, grant a new lease to the said party of the second part, her executors, administrators or assigns, at her or their expense, for a further term of twenty-one years, to commence from the expiration of the term hereby granted, at a reasonable yearly ground rent, payable half-yearly, to be ascertained as hereinafter mentioned."
The method provided for ascertaining the value of the buildings or the amount of the renewal rent was by *Page 476 
arbitrators to be nominated by the parties at least one hundred and twenty days before the expiration of the term.
Two things the parties clearly had in mind. One was the expiration of the term. Whatever was to be done was to be finished or completed by the end of the term. The second was that the arbitration would be complete by that time. The money was to be paid, or the lease renewed by or at the end of the term. When the lessee signed this lease prepared by the owner, he had every reason to expect from its terminology that at the end of the term he would know his exact position. The owner, not he, was the one to speak and make this certain.
The lease did not use in this connection the word "elect" or "election." It said the lessors were to pay or to give a lease. As both of these acts were to be done before the end of the term, the acts themselves embodied or included the "election." The main, underlying, fundamental idea, however, was the determining, finally settling by the end of the term, what these two parties were to do for the future. There was to be no period of suspension; the lessors were to settle for the lessee whether he would get cash for his buildings or get a new lease.
That "election" was in the minds of the parties and contemplated by them is evidenced by other portions of the lease, such as that which reads as follows: "That if the party of the first part * * * having, before the expiration of any term,elected to pay for any such building, * * * shall neglect to pay or offer to pay for the same, according to the valuation made as above provided, then the said party of the second part * * * shall and may hold and continue in the possession of the said demised premises until such payment shall be made."
And again, at the end of a renewal of the lease, it is provided that the lessee at the end of such third term or within twenty days thereafter may take down and remove the buildings "unless the said parties of the first part *Page 477 
* * * shall elect to purchase and take to their own use such building or buildings, at two-thirds of the just value thereof, to be ascertained in the manner hereinafter mentioned."
Surely in this latter instance, the lessors would be obliged to "elect" within the twenty days, although the value might be ascertained thereafter.
"Election," therefore, was contemplated by the parties. The one contingency which the lessors failed to provide for in their lease was the failure of the arbitrators to determine the value or renewal rental before the expiration of the term. The contingency has happened, but the underlying purpose and object remain the same. The lessors could have "elected," even though they could not completely perform by the end of the term. Nothing in the world prevented their "election." They could not pay the value for the buildings, as that has not yet been ascertained; they could have given a lease at a rental to be subsequently fixed by arbitration, but whether they could or not, they could have "elected" by or at the expiration of the term to purchase at the price subsequently to be fixed, or to give a lease at a rental to be fixed as provided for. The lessee upon such "election" and notification would be obliged to act as provided for in the lease; that is, he would be obliged to take subsequently the amount determined by the arbitrators; or he would be obliged to take a lease thus "elected" to be given, or lose his buildings. In other words, at the end of the term the rights of the parties were to be determined, the position was to be made known. Although the lessors could not pay an exact sum of money or give a lease with a definite rental, they could have done the next best thing, which, for all practical purposes, would be just as good. They could have "elected" and declared their position or decision, leaving the amounts to be subsequently determined. This is not new or unusual in leases or agreements. *Page 478 
To take the position that the lessors could wait perhaps months or years for the decision of the arbitrators would be extremely unfair and unreasonable to the lessee. At the end of his term, he would not know whether he was a lessee or what he was. What would be his position? What estate would he have? I confess I do not know. The hold-over could not be a tenancy at will. The lessee could not leave the premises or give up the tenancy without forfeiting the buildings. He would be held in suspense at the will of the lessor or the arbitrators for an indefinite time; a suspense against his will. He could not give subleases; his subtenants would have no assurance of staying on; he would have an empty building on his hands, awaiting the slow measure of arbitration machinery. Neither could he make improvements or repairs if he were a manufacturer; value was to be determined as of the end of the term. This uncertainty would be hanging over his head with no means whatever of making it certain until the decision of the arbitrators. At any moment they might fix the value and the renewal rent; the lessors then could take the buildings, or offer a lease at their "election." The time,however, when they could do these things, would be absolutely beyond the determination of man, whereas the lease prepared by these parties fixed a definite time for such determination, to wit, the end of the term.
The courts below, in my judgment, have properly disposed of this case in holding that the lessors, having taken the position that they would not "elect," even within a reasonable time after the expiration of the lease, the lessee had the right to "elect" for himself. I feel that no injustice will be done by the affirmance of this judgment.
POUND, LEHMAN and KELLOGG, JJ., concur with HUBBS, J.; CRANE, J., dissents in opinion; O'BRIEN, J., not voting; CARDOZO, Ch. J., not sitting.
Judgments reversed, etc. *Page 479