Brown v. . the New York Central R.R. Co. , 1870 N.Y. LEXIS 129 ( 1870 )

As the defendant did not have possession of the road in April, they can only be made liable for the rent claimed by virtue of some agreement. Here the agreement to pay rent, if any; was part of an agreement for a perpetual lease of the road. There was no independent agreement to pay for the month of April alone. As the lease, therefore, was to be perpetual, it was required to be in writing.

The correspondence prior to July did not make a lease, as the minds of the parties had not met. There were many matters to be settled, and the correspondence shows that the parties did not understand that it made the lease or agreement between them. It shows that they intended that the agreement between them should be formally reduced to writing. The time when the rent was to be extinguished by purchase was to be agreed on, and the forms and covenants of the lease, and the rental certificates and other details were left for future consideration and arrangement. That the matters thus left for future adjustment and agreement were many and important, will be seen by the lease subsequently executed.

In Lyman v. Robinson (14 Allen, 254), Judge FOSTER, says: "A valid contract may doubtless be made by correspondence, but care should always be taken not to construe as an agreement letters which the parties intended only as preliminary negotiation. The question in such cases always is, did they mean to contract by their correspondence, or were they only settling the terms of an agreement into which they proposed to enter after all its particulars were adjusted, which was then to be formally drawn up, and by which alone they designed to be bound?" "The circumstance that the parties do intend a subsequent agreement to be made, is strong evidence to show that they did not intend the previous negotiations to amount to an agreement." (Lord CRANWORTH in Ridgway v. Wharton, 6 H.L. Cas., 268.) In the same case Lord WENSLEYDALE says, p. 304: "An agreement to be finally settled must comprise all the terms which the parties intended to introduce into the agreement. An agreement to enter into an agreement upon terms to be afterward settled between the parties, is a contradiction in terms. It is absurd to say that a man enters into an agreement till the terms of that agreement are settled. Until those terms are settled, he is perfectly at liberty to retire from the bargain."

The principles here laid down fully cover this case, and it follows that the judgment must be reversed and new trial granted, costs to abide the event.