E. J. Conrad Corp. v. 161 Madison Avenue, Inc. , 214 N.Y.S. 710 ( 1926 )

Finch, J.

The question to be determined is the apportionment, as of the date of closing under a written contract between the parties for the purchase and sale of a leasehold, of the rent due under the lease for the month in which the closing was had. This determination depends upon the construction to be given the contract between the parties. Said contract is dated the 4th day of September, 1925, and provides for the sale by the E. J. Conrad Corporation to the 161 Madison Avenue, Inc., of a certain indenture of lease dated November 17, 1924, between Warrington Realty Corporation, as landlord, and Abraham Goldman and Wallace K. Seeley, as tenants, covering premises 161-163 Madison avenue. Said lease, by mesne assignments, had been duly assigned to the Conrad Company. The contract provided that the closing should be had on the fifteenth day of September. By mutual agreement the date of closing was adjourned to September eighteenth and the contract was closed as of the close of business on the seventeenth day of September.

The lease, which was the subject of the sale herein, was for a term of ten years commencing on the 1st day of November, 1924, at a yearly rental of $36,000 for each year of the term, payable as follows: “Two thousand ($2,000) dollars on the date hereof; three thousand five hundred ($3,500) dollars on the 1st day of ■December, 1924; three thousand five hundred ($3,500) dollars on the 1st day of each and every month thereafter beginning with the 1st day of January, 1925, and continuing to and including the 1st day of July,. 1925; two thousand ($2,000) dollars on the 1st day of August, 1925; two thousand ($2,000) dollars on the 1st day of September, 1925; two thousand ($2,000) dollars on the 1st day of October, 1925; and during each and every year of the balance of the term, three thousand ($3,000) dollars on the 1st day of each and every month of said term beginning with the 1st day of November, 1925, and continuing until the end of the term; all rents to be due and payable on the first day of each and every month in advance.”

At the date of closing the Conrad Company, the seller, had paid to the owner the sum of $2,000 due under the lease on the 1st day of September, 1924, as rent for the month of September. The contract of sale between the parties hereto provided that “ At the time of closing the following are to be apportioned: Rents and other payments required to be made by the tenant pursuant to the terms of said lease * *

The 161 Madison Avenue, Inc., the purchaser, tendered and paid to the Conrad Company, the seller, the sum of $866.66, being for thirteen days’ occupancy of the premises by the purchaser during the month of September after the date of closing, at the rate of $2,000 a month, which had been paid as aforesaid by the Conrad Company under the lease. The Conrad Company claimed, however, to be entitled to a larger amount, upon the theory that the apportionment of the rent should be based upon the yearly rental of $36,000, which would be more than $2,000 a month.

As already noted, the decision, of course, turns upon the construction of the contract between the parties. This contract is not ambiguous. As set forth above, it provides for the apportionment of rents required to be made by the tenant “ pursuant to the terms of said lease.” The lease required a payment of $2,000 for the month of September and this, therefore, is the amount to be apportioned between the parties as of the date of closing. In addition, the contract of sale also contains the following provision: “ And all terms, covenants and conditions of the said lease to be performed by the seller as tenant therein prior to date of closing shall be complied with by the seller, and the premises shall be conveyed free of the same, and this provision of this contract shall survive delivery of the assignment, bill of sale and other documents mentioned herein.”

Under this language, if the rents were apportioned on a different basis from that provided in the lease, then the above clause would not be complied with and the lease would not be conveyed with all its terms, covenants and conditions performed by the seller prior to the date of closing. It follows that judgment should be granted to the 161 Madison Avenue, Inc., against the E. J. Conrad Corporation, but without costs, as provided in the submission.

Clarke, P. J., Dowling, McAvoy and Martin, JJ., concur.

Judgment ordered for defendant, without costs. Settle order on notice.