Bruce v. . Fulton National Bank , 1879 N.Y. LEXIS 1005 ( 1879 )

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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] There is no foundation for the appellants' argument. The parties to the agreement bound themselves by express covenants under "hand and seal," and the defendant is not shown to have broken any one of them. This conclusion was also reached by the trial court, and by the General Term, but the first rendered judgment for the plaintiff on the ground that, from the words of certain express covenants on the part of the lessor, an additional or correlative covenant on the defendant's part might be implied, and this may be so if the language used shows clearly that such covenant was intended. (Sampson v. Easterly, 9 B. C., 505; Saltoun v. Houstoun, 1 Bing., 433; Earl ofShrewsbury v. Gould, 2 B. Ald., 487.) But this construction cannot be permitted when it is apparent that the parties have themselves had the subject in mind and either one has withheld a promise in regard to it. That being so we can no more collect it from the words used than we can supply words, for in either case we should make the contract speak where the parties themselves were silent; and to do this the court has no power.

The agreement before us is very explicit. It was evidently prepared by a careful and experienced draftsman. Its subject is not new, nor is its form singular or unusual. It does not appear that anything was omitted which either party intended to provide for; "it is drawn technically in form, and with obvious attention to details," and in such a case "a covenant cannot be implied in the absence of language tending to a conclusion that the covenant sought to be set up was intended." (Hudson Canal Co. v. Penn.Coal Co., 8 Wallace, 276.) This rule is cited with approbation by ALLEN, J., in the recent case of Booth v. Cleveland RollingMill Co. (74 N.Y., 15), and it applies to and must control the case before us.

We find in the agreement some covenants binding the parties mutually; others only the lessor, and others still the lessee, — expressed in apt words without ambiguity or confusion. There is first a lease. By it the plaintiffs' testator as lessor "doth grant, demise," etc., "to the party of the second part," the defendant, certain described premises "from 12 o'clock at noon of the 1st day of May, 1856, for the term of twenty-one years at the annual rent of $1,600 payable quarterly;" then a mutual covenant expressed by the words — "it is agreed," that in case of non-payment of rent when due, or default in other covenants, the lessor may re-enter, etc.; next — the party of the second part, the lessee, "for himself; his successors or assigns, doth covenant to pay" to the lessor the yearly rent, also all taxes assessed, etc., on the demised premises during the term; then — "the party of the first part doth covenant and agree that on paying the rent and performing the covenants and agreements" in the lease "contained on the part of the party of the second part," he shall have quiet and peaceable possession of the premises during the term.

In all this there is no room for implication, and although from the word "demise" a covenant in law would be implied for quiet enjoyment, yet that covenant has been expressed. From the reservation of rent there is an implied covenant on the part of the lessee to pay the rent so reserved, yet a covenant to that end has been expressed; an omission to pay the rent, or a breach of any other covenant would warrant an entry by the lessor, yet it is mutually agreed that such shall be the effect of such omission. Not only then have technical words been used from which covenants in law would arise, Hayes v. Bickerstaff, (Vaughan's R., p. 118), but, as if to avoid the possibility of misconstruction, the covenants have also been written out. Following these provisions for a present lease, we find covenants in reference to a new or renewal lease, and on these the plaintiff rests his cause of action, viz.: "And the said parties of the first part do hereby covenant and agree that if the said party of the second part or his assigns shall well and truly pay the rent hereby reserved and keep and perform all the covenants herein contained on the part and behalf of the said party of the second part his successors or assigns, that the said Dorothea A.L. Wolfe" (party of the first part), "her heirs or assigns shall and will at the end or expiration of the term hereby granted, grant unto the said party of the second part a new lease of said premises for a further term of twenty-one years next ensuing from the time of the expiration of the term hereby granted, at such annual rent (not less than the rent hereby reserved) as shall then have been agreed upon by the parties or otherwise determined or ascertained as hereinafter provided." It is very plain that here is a covenant by the lessor only, — an agreement by her to give a new lease. There is none by the lessee to accept it. If we consider it in connection with the covenants which have preceded it, we see that it thus expresses the whole intention of the parties, for such is their language. It declares a covenant on the part of one to do an act. If it had been intended to bind both, or to impose a correlative obligation on the other, we should expect a clear statement to the effect, not only that one would give, but that the other would take a lease, or the use of words from which such an agreement must necessarily have been implied. It is not a present grant accepted by the other party, but a conditional promise or covenant to grant in the future a further term. It may be regarded as an offer for the benefit of the lessee, or as an inducement to him to build upon or improve the premises, giving assurance that if he did so he should enjoy the fruits of his expenditure for a longer period. (Abeel v. Radcliff, 13 J.R., 298.) This view is strengthened by the concession made in the printed points of the appellants' counsel. He says: "The circumstances of the lessee were peculiar, and the terms of the lease were exactly adapted to them and to the wants of the bank. * * * The bank was about to erect a costly banking-house upon this lot and its own adjoining lot on Fulton street." The lessee therefore would require the privilege of renewal, — the lessor be indifferent to it. If the term ended, the lot with the bank building would revert to the lessor. (Piggot v. Mason, 1 Paige, 412-415.) There is nothing to indicate that the lessor was desirous of continuing the lease, nor that the option was not given to the lessee to induce him to accept the original lease and improve the property. Besides, the lessor is bound to give a new lease if it was understood that the lessee was bound to accept; it would have been easier and more natural and in harmony with the structure of the other covenants regulating the engagements of the parties, to have entered at once into a lease for a longer period, — that this was not done would, of itself, warrant the conclusion that such result was not intended except at the option of the lessee. The learned counsel for the appellants, however, insists that the subsequent covenants relating to the adjustment of rent by appraisers bind both parties; and this is so to a certain extent. They bind the lessor provided the rent is fixed "at a sum not less" than that for the first term, and they bind the lessee absolutely. Here the option is with the lessor. He is not bound to accept a rent less than $1,600. The lessee is bound, if he goes before the arbitrators to abide by and perform their award. But there can be no arbitration until the lessor is called upon to give a new or renewal lease. When this event happens it may be that both parties become bound, but it is not necessary to decide that question, — it is enough that there can be no arbitration if there is no acceptance of a new lease, and no obligation to accept it can be implied from the subsequent provisions, for we have seen that there is an express covenant concerning it, binding on the lessor alone and excluding the idea that the lessee is bound, and in such a case a covenant cannot be implied.

As we look further into the agreement we find other reasons for this construction of the covenants of the respective parties. There follows in substantially the same words as before, another covenant on the part of the lessor, for another, or second, renewal lease for twenty-one years, if the lessee pays his rent and performs his covenants, at such annual rent (not less than the rent reserved for the term of the first renewal) as shall have been agreed upon or otherwise determined as in the lease provided. Next — "it is further covenanted and agreed between the parties hereto, that at least ninety days previous to the last expiration of the last renewed or third term of twenty-one years, if said last term shall be granted," the demised premises shall be valued and appraised as a vacant lot by arbitrators "and the party of the second part shall purchase the lot at its appraised value," and "the said Dorothea A.L. Wolfe will, on receiving such appraised value, grant and convey to the party of the second part the said land in fee simple." There is nothing left for implication here; on the contrary there is a mutual covenant that the party of the second part will buy, and that the party of the first part will sell; so that we have throughout the instrument clearly and explicitly expressed the covenants and obligations of the several parties, and we may say of this contract as was said concerning a statute in Edrich'sCase. "The several inditing and framing of the different branches doth argue that the maker did intend a difference of the purview remedies." Edrich's Case (pt. 5, fol. 118, 3 Coke's R.). From the different language used in the various covenants it is evident that the omission of words which would impose or indicate a mutual covenant was intentional, for it is apparent that the parties knew how to use terms applicable to the subject. It would therefore be a perversion of the plain reading of the agreement to impose upon the lessee the obligation which is assumed to lie at the foundation of this action, and it could only be done by a disregard of well settled principles of law. InChurchward v. The Queen (Law R. [1 Q.B.], 173), the court refused to interpolate the obligation sought to be implied, Lord COCKBURN saying "the court should take great care not to make the contract speak where it was intentionally silent; and above all, that they do not make it speak entirely contrary to what, as may be gathered from the whole terms and tenor of the contract, was the intention of the parties;" and to the same effect HudsonCanal Co. v. Penn. Coal Co. (8 Wall., 276); Maryland v.Railroad Co. (22 id., 105); Booth v. Cleveland Rolling MillCo. (74 N.Y., 15). A lease similar to the one in question came before the chancellor in 1829, and while the precise point now in hand was not presented, it is evident he regarded it optional with the lessee to renew. (Piggot v. Mason, 1 Paige, 412-415.) We have not overlooked the authorities referred to by the learned counsel for the appellant. They do not seem to us in point. In Johnson v. Conger (14 Abbott, 195), the action was for a renewal by the tenant against the landlord. The latter was clearly bound and upon sufficient consideration. The tenant elected to have the obligation fulfilled. Whether, except for that election, the lessee would have been bound, was not in question. In Pordage v. Cole (1 Williams' Saunders, 319 i), the decision rests on the word "agreed," which was said to be "the word of both parties," and so both were bound, but, say the court, "it might be otherwise if the speciality had been the words of the defendant only and not the words of both parties." InButler v. Thomson (2 Otto, 412), the words were also the words of buyer and seller. Neither case has therefore any application to the present where the covenant is in terms the covenant of one only. Nor do those cases aid the appellants which hold that any words in a deed showing an agreement to do a thing make a covenant (Com. Dig. Covenant, A., 2; Vaughn's R., 118; Rawle on Covenants, 365; Shepherd's Touchstone, 162; 1 Platt on Leases, 706, and cases there cited; Curry v. Stanley, Hayes Jones, 487) for the very point is against them in that, there are here no words to that effect. If the agreement was mutual throughout, the principle of these decisions and especiallyPordage v. Cole would sustain the appellants and we could then hold with the learned judge at Special Term "that what one party agreed to do, the other assented to and concurred in;" but if the construction already given by us to the agreement is correct, such is not its character. It is very probable that both parties contemplated that the bank would find it desirable and for its interest to continue business upon the demised premises for a term longer than that of the original lease, and if so they would desire the "right" or "privilege" or "option" of a renewal, but we can find no express covenant or anything from which a covenant can be implied that they would remain or accept a renewal of the lease. We think, therefore, that the case was properly disposed of by the General Term and that its order should be affirmed, and judgment absolute ordered for the defendant.

All concur.

Order affirmed and judgment accordingly.