Court Opinion

ID: 5250689
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:12:35.877945+00
Date Added: 2024-06-11T08:27:56.492451
License: Public Domain

Smith, J. (dissenting):
Upon the 23d of June, 1915, the plaintiff and defendant entered into a contract, which is in the nature of a lease, which provided for the letting to the defendant by the plaintiff of a signboard on a building at the northwest corner of Forty-second street and Fifth avenue, being on the Forty-second street side, from August 1, 1915, to December 1, 1916, in consideration of a rent of $4,000 to be paid in equal monthly installments in advance. The plaintiff agreed to paint upon said signboard an advertisement from a copy to be delivered by the defendant. The defendant agreed that said copy would be furnished not later than three days after the signing of the lease. The léase then stated other agreements between the parties which are not material here to the discussion, and after the statement of those agreements it provided “ that should default be made by the tenant in any installment of rent, then and in such event, and at the *176option of the landlord, all the balance of rent for the remaining period of the lease shall immediately become due,” and as security for the payment of the rent, that' in case there should be a default in the payment of any installment of rent, and the balance of rent for the remaining period of the lease should become due and payable as thereinbefore provided, the landlord was authorized to rent said space or any part thereof on behalf of the tenant, for the whole or any part of the term, and to apply the rent upon the moneys due from the defendant to the plaintiff under the lease. It was thereafter provided that in case of the failure of the tenant to perform any of the terms of this lease, other than the payment of rent, or of the violation by the tenant of any of the covenants of the lease, it should be lawful for the landlord to retake the premises and relet the same for the whole or any part of the term. In that event the tenant agreed to pay each month to the landlord during the balance of the term remaining after the taking possession by the landlord, the difference, if any, between the amount to be paid as rent therein reserved and the amount which should be collected and received from such reletting. The tenant neglected to furnish the copy which he had agreed to furnish but some time .before the tenth of September the plaintiff brought an action to recover for the August and September rent. Upon the tenth of September plaintiff wrote defendant a letter calling attention to the default in the payment due upon the contract and to the provision of the lease that in case of such default the plaintiff might rent the premises for the defendant’s account and advised the defendant that it would endeavor to sell the same for his account and would hold -the defendant for any loss which the plaintiff suffered therefrom. Thereafter and upon the eleventh day of September the plaintiff made a contract with the Shubert Bill Posting Company to put a sign for them upon this board in the space which had been rented to the defendant. That contract provided that the space should be rented to the Shubert Bill Posting Company temporarily, with the right to the plaintiff to take the same from the Shuberts and paint the defendant’s sign in its place at’ any time, and that the contract might be terminated at the will of the plaintiff at any time. In pursuance of that *177contract the Shubert’s sign was painted and put upon the signboard in the space which had been rented to the defendant. Upon the fifteenth of September the defendant paid to the plaintiff the rent due the first of August and the first of September. Upon that date the plaintiff wrote to the defendant acknowledging the receipt of the check, called attention to the letter of the tenth, which has been mentioned, and stated that in order to save the defendant money, it had made an arrangement with the Shubert Bill Posting Company to temporarily paint their advertisement in the space, and with a reservation in its contract • with the Shubert Bill Posting Company, giving it the right to terminate the contract at any time it desired, and offering to place the defendant’s advertisement on the signboard at any time that a copy was furnished. Upon September twenty-first thereafter the defendant wrote to the plaintiff as follows: “We hereby give you notice that we consider the using of the sign paid for by us, by any one else, is a breach of contract. We are perfectly willing to have you re-let the sign, but we must first be released from all obligations.”
Upon September twenty-fourth the plaintiff wrote to the defendant, calling his attention to its letters of September tenth and September fifteenth, and still offering at any time to paint the defendant’s sign upon the signboard whenever a copy was furnished. The letter continued: “ You will understand, of course, that the renting of this space produces a revenue for you that you would not receive otherwise, and certainly the sub-letting is for your benefit, as the blank space can do you no good. We beg further to state that our agreement is perfectly clear on this score that, in the event of default in any of the covenants on your part, we have the right to let the same for your account, and we are further advised by our attorneys that, notwithstanding any agreement that we may have with you, it still remains our duty to cut down your damage, and we have pursued this policy. We will, however, look to you for any loss that is made in connection with this, and await your further advice in the event of your desiring to have the sign painted with your copy.”
*178Upon September twenty-eighth the defendant answered the plaintiff, acknowledging the receipt of the letter of the twenty-fourth, and calling attention to the fact that the delay in furnishing copy was due to the defendant’s inability to procure a trade mark which he proposed to use. In that letter it was stated that he had no desire to lessen his damage and believed the use of the sign would be a detriment of its value to him, and further stated: “We are quite prepared to pay the full amount of our account and would tell you again that any occupancy of the sign we will consider a breach of contract. We have not requested you to lessen our damage.”
Upon October sixth the plaintiff responded, acknowledging the receipt of the letter of the twenty-eighth, and further stated: “ In selling this space we have kept entirely within our rights under our agreement with you, but if you do not desire to lessen your loss we certainly have no wish other than to save you any loss we can. However, if you will sign the enclosed request we will proceed thereunder. The reason we are not prepared to do so in accordance with your letter of September 28, 1915, is your statement that you will consider the occupancy of the sign a breach of the contract, and unless you are willing to acknowledge your liability so far as the balance of the term of the sign is concerned, we do not care to remove the present advertisement, for, as stated, we feel we have kept entirely within our rights.”
The inclosed request referred to was an unsigned letter to the plaintiff from the defendant requesting the removal of the sign of the Shubert Company and agreeing to pay the amount due for the balance of the term of the lease in accordance with the provisions thereof, less any sum that had been collected from the Shubert Company. This ended the correspondence. Thereafter and on the 22d of November, 1915, this action was commenced to recover the balance of the rents due on the first of October and the first of November, over and above the amount received from the reletting of the sign to the Shubert Bill Posting Company. In the Municipal Court the complaint was dismissed upon the ground that if' the plaintiff sought to lease the premises for the account of the defendant, it must first declare the *179entire rent due. The opinion concludes: “Not having exercised that option the present action must fall.” This judgment has been affirmed by the Appellate Term.
In my judgment the courts below have misconstrued this lease. It is first provided in the lease that if default be made in the payment of rent, plaintiff had the option to declare the whole amount due. If default were made and the option were so exercised, the plaintiff might relet the premises and charge the defendant with deficiency. Thereafter provision was made that the premises might be relet and the defendant charged with the deficiency for any other breach except the non-payment of rent. If the lease had stopped at this point, the reasoning of the Municipal Court would have stood upon a firm basis and the plaintiff probably could not have relet for a non-payment of rent and recover for a deficiency, except upon exercising this option to declare the full amount due. But the lease did not stop there. After providing for a reletting and a recovery of the deficiency in case of nonpayment of rent and the exercise of the option to declare the full amount due, and also for the same right in case of the failure of the tenant to perform any of the terms of the lease except the non-payment of rent, the lease assumes to provide another contingency, to wit: “Or of the violation by the tenant of any of the covenants of the lease.” If the interpretation which has been put upon the contract be correct, this last provision is surplusage, for the contract had already provided for every violation of covenant, except the single violation of failure to pay rent without having exercised the option to declare the full amount due. It would seem as though this provision were put in the lease to cover this precise contingency, to wit, the failure to pay rent, without the exercise of that option, for otherwise it is entirely without significance. This interpretation of the contract is made certain by the provisions of the lease which follow and by which it is covenanted that in the event of the termination of this lease and the reletting of the property, the tenant agrees to pay each month to the landlord during the balance of the term remaining, the difference, if any, between the amount to be paid as rent herein reserved and the amount which should be collected from such re-rental, *180and it is provided that the landlord may sue for and enforce a collection by law for such an amount as may be due at the expiration of each month. Again, the lease provides that the tenant expressly agrees that any suit shall not be a bar or prejudice in any way to the right of the landlord to collect the amount due at the end of any future month by like or similar proceedings. These latter provisions clearly contemplate a reletting without the exercise of the option to declare the full amount due. It is, therefore, not a fair or reasonable interpretation of this contract that it was intended that the landlord might relet and recover for the deficiency only in the event of failure to pay rent and of the exercise of the option to declare the full amount due. In fact, under the terms of this lease, it might be argued that no action could be commenced at any time except for the deficiency accruing as each month’s rent became due. The landlord has apparently acted in good faith in endeavoring to save the defendant any loss upon the contract by reason of its failure to secure the benefit of the advertising, and when the defendant wrote to the plaintiff that he did not care to have the damage lessened and he would consider it a breach of the contract to put any other sign upon this board, the plaintiff offered at once to paint out the sign and hold it for the defendant, if the defendant would only acknowledge his liability under the lease, which he refused to do. In my judgment the plaintiff has acted clearly within the rights given to it under the contract and is entitled to recover the moneys sued for.
The determination of the Appellate Term and the judgment of the Municipal Court should b*e reversed, with costs, and a new trial granted, with costs in all courts to the appellant to abide event.
Determination affirmed, with costs.