Durand v. . Curtis , 57 N.Y. 7 ( 1874 )

On the 6th of June, 1865, the plaintiff demised certain premises in Rochester to Edward P. Gould, Charles F. Butts and Sarah E. King, comprising the firm of E.P. Gould Co., for the term of three years from the preceding first day of April, at an annual rent of $700, payable monthly in advance. The lessees went into possession and so continued transacting their business until the 5th of January, 1866, when Butts transferred, by writing, all his interest in the firm to Gould, and Gould assumed all the debts of the concern, so far as they affected Butts. Gould King then continued the business and possession of the demised premises until the last of February following, when King sold and Gould purchased, by parol, all her interests in the partnership business and property, "and the said lease and premises," Gould paying a consideration and assuming the liabilities of the firm, including rent of the premises under the lease and the performance of all its covenants on the part of the lessees. Thereafter the sole possession of the property and the management of the business was left with Gould, and he, thereupon, formed a partnership with the defendant Curtis, and they for a time continued the business under the name of Gould Curtis. Gould put in as his share of the capital stock the merchandise and property of the late firm of Gould King, and also the said lease, and the defendant Curtis contributed an equivalent in money, and paid back to Gould one-half of the month's rent due on the first of April following, which had been paid in advance; and the defendant Curtis assumed and agreed, upon an adequate consideration, to pay one-half of the rent thereafter to accrue upon the lease, and to become jointly liable with Gould therefor as a part of the partnership liabilities. This partnership was formed, and the joint occupation commenced on the 1st of March, 1866, and on the third of that month formal articles were made in which the term was limited to the 1st of April, 1867. It did not, however, last so long, for on the 5th of December, 1866, Gould sold out to Curtis, who in turn assumed all the obligations of the firm, retaining the possession, and continued the business until the twenty-seventh of the same month, when he sold out to B.A. Cox, who assumed all the liabilities of Curtis, and he went into possession and went on with the business until the following February, when he sold out to Hamlin, Harrison Co., and with them the mutations of this constantly dissolving firm appears to have reached an untimely end. While the transfer of Cox to Hamlin, Harrison Co. was made with the knowledge and assent of the plaintiff, and he afterward expressed the opinion that they were "the right kind of men," which was so far justified that they paid the rent up to the 1st of December, 1867, they, prior to that date, failed in business and abandoned the premises, and since that time no rent under the lease has been paid the plaintiff.

In July, 1867, during the occupation of Hamlin, Harrison Co., they, in consideration of fifty dollars applied on the rent of the premises, gave up to the plaintiff the second floor thereof, and consented to the removal of the stairs between the two stories, the closing up of a hatchway and the taking away of a fall used in connection with the store below. This was done without the consent of defendant or any of the prior occupants under the lease, and the plaintiff took possession of the second floor, divided it by partitions and rented it to other tenants and collected the rents therefor during the residue of the original term; and the referee finds: "And so the plaintiff recognized and accepted said Hamlin, Harrison Co. as, and they became his tenants of the said demised premises in the place and stead of said original lessees and their assignees, and he treated and dealt with them as such."

I think it can be easily demonstrated that the referee was right in holding that the defendant would have been liable for the rent but for the supposed surrender, which, as is said, was effected "by operation of law." He appears to have been bound by both privity of contract and estate. The obligations under the lease, to my mind, were a part of the obligations of Gould and Davis which the defendant, upon dissolution, personally assumed. It is not enough to say, as the learned judge at General Term did, that this was not the debt of the firm, as it became due long after the firm had been dissolved. The obligation to pay the rent to the full end of the term of the lease, was created when the firm was formed and still exists, if not in some legal form discharged. If the defendant had remained in possession until the end of the demised term, it does not appear to me that his liability for the rent, ought to be questioned. The plaintiff might maintain his action upon the agreement to pay the debts of the firm, of which the obligations under the lease was unquestionably one. (Lawrence v. Fox, 20 N.Y., 268; VanSchaick v. Third Ave. R.R. Co., 38 N.Y., 346.) There was in the lease, an express covenant to pay the rent by the lessees; and their assignee direct or remote going into possession of the demised premises, upon a valid agreement to discharge all the obligations to the landlord would be bound, by privity of estate, to pay rent as long as he should remain in possession and by privity of contract, until his liability should be in some legal form discharged.

It is very clear, I think, that the defendant was not in this case discharged from liability, unless it resulted from a surrender of the premises to the plaintiff by operation of law, it not being claimed that the original lessees or the defendant have done or authorized the doing of any act amounting to a surrender of the demised term. Ordinarily a surrender implies the giving up the whole of the demised estate and the absolute determination of the relation of landlord and tenant, and this may result in various ways. In this case the actual surrender was of a part only of the demised property, and as to the residue the lease continued operative unless affected by circumstances hereafter to be considered. If a lessee for years accepts a new lease of a part of the same land, it operates as a surrender of a part only and not of the whole, for the property demised may be divided; for the tenants as is said "may surrender one or two acres either expressly or by act in law, and yet the lease for the residue stands good and untouched." (2 Roll. Abr., 498; Fish v. Champion, 5 Bacon, 1 Abr. [Bouvier's ed.], 666.)

The finding of the referee that the plaintiff accepted Hamlin, Harrison Co. as tenants in place and stead of the original lessees and their assignees, is, I think, founded solely upon the fact that under the arrangement before referred to, the plaintiff took possession of the second story of the building leased, to make some alterations, and afterward let rooms to other tenants. If this be so it did not justify a finding of law that there had been a total surrender. Upon a careful examination of the evidence, I find nothing else to support such a finding, other than that the plaintiff received the current rent from Hamlin, Harrison Co. as he had done from all prior occupants of the premises. The circumstance of accepting rent from the assignee of a lease, does not discharge the lessee, for it is nothing more than accepting the payment of rent through the hand of another. (Brewer v. Dyer, 7 Cush., 337; Bedford v. Terhune,30 N Y, 453; 1 Wn. on Real Property, book 1, chap. 10, § 7, p. 479 [3d. ed.].)

I am, therefore, of the opinion that it was error to order judgment for the defendant. The plaintiff should have recovered the proportionate share of the rent due for the portion of the premises not surrendered. The surrender of the second story to the plaintiff did the defendant no injury, but in fact inures to his benefit. If he had desired to reoccupy the premises after the failure of Hamlin, Harrison Co., and had been refused the possession of all of the premises covered by the lease, some different, and perhaps difficult, questions might have arisen.

A new trial should be granted.

For affirmance, LOTT, Ch. C., EARL and GRAY, CC.

For reversal, REYNOLDS and JOHNSON, CC.

Judgment affirmed.