Wray v. Rhinelander

By the Court, Daniels, J.

The plaintiff brought this action for the purpose of procuring-the specific performance of a covenant made by the defendant for the execution of a new lease of certain premises previously demised to him as the assignee of Ward B. Howard. It appeared by the evidence, as well as the conclusion of fact found by the court to be proved by it, that the defendant’s testator, (William Rhinelander, deceased,) executed and delivered to Ward B. Howard a lease of the premises in controversy, for the term of twenty-one years from the 1st day of May, 1824. This lease contained a covenant on the part of the lessor for a new lease at the expiration of the term, for another period of twenty-one years. And on the 1st day of March, 1844, a lease was executed and delivered by the defendant to the plaintiff, for the second term of twenty-one years. This lease contained a covenant for a third, for a similar term, after the expiration of that created by the second, in case the defendant should not elect to pay for certain buildings erected and at that time standing upon the demised premises. What buildings these were that the defendant agreed to pay for in case he declined to give a third lease for twenty-one years, constitutes the substantial point in the present controversy. The plaintiff insists that they are all the brick and stone buildings erected upon the demised premises at any time during the tenancy created by the first and second leases, and standing thereon at the expiration of the second term. While the defendant insists that they are only such buildings as have been erected by the plaintiff. And as he has created none, the defendant in that view, would be bound to pay for none.

The defendant’s position in this respect is taken under the language used in the second lease, which was given to the plaintiff) for the purpose of designating the buildings which were to be made the subject of the payment. This language, taken in its literal sense, will readily sustain that position. For the terms used are that the defendant shall pay the value “ of all such stone and brick buildings as may have been erected by the ” plaintiff, who was “ the party of the second part.”

On the 21st of February, 1866, the defendant gave the plaintiff notice that he had made his election not to grant a new lease of the premises, but to pay the value of any stone or brick buildings which had been erected, thereon “ by the- lessee or his assigns during' the term of said lease.”

The object to be attained in construing agreements, is to ascertain from them- what was the intention of the parties to them. And that is commonly done by giving the words used by them, their ordinary and popular meaning. For where nothing is found manifesting any different conclusion, it is properly presumed that the parties made use of them, in that manner. But as language is often carelessly, and inadvertently made use of, even in instruments of the most deliberate and solemn character, that presumption is not to be followed, where from an examination of the entire agreement, it becomes apparent that by following it, a result will be produced not within the contemplation of the parties. In this case the plain import of this clause, standing and considered by itself, is that the defendant will pay for such buildings only as the plaintiff erected upon the premises. But other clauses are contained in the lease to the plaintiff, as well as in the preceding lease given to Howard, indicating that a different construction should be given to that clause. And as the second lease was given for the purpose of continuing and extending the term created by the first, the latter should be considered, so far as it may be applicable, in ascertaining the construction which must be placed upon the clause in controversy.

The buildings for which payment was demanded by the plaintiff, were erected by Howard, the tenant to whom the first lease was executed and delivered. By the express terms of that lease, the estate demised to him was assignable. For the demise was to him, his executors, administrators and assigns. And in case of an assignment of the lease, the obligation of the lessor to pay for the buildings, in case of a refusal to „ execute a second lease, afterwards existed in favor of the assignee. That was clearly imported by the language contained in the first lease. This lease was afterwards assigned by the lessee named in it, and the plaintiff became the owner of it, as assignee.

"When, therefore, the time arrived for the lessor to elect whether he would give a new lease for the further term of twenty-one'years, or pay for the buildings erected by the lessee upon the land, that election was to be exercised exclusively in the plaintiff's favor. If the defendant, who had then become the executor of the lessor in the first lease, had elected not to give the second lease, he would have been legally bound to pay the plaintiff the value of the buildings, which Howard had erected on the demised premises. So that, practically and legally, the plaintiff was at that time the owner of these buildings, and the only way in which the defendant could have acquired title to them, would have been by paying the plaintiff for them. Instead, however, of doing that, the defendant gave the second lease. And that was done before the term expired, which had been created by the first lease. But no attempt was made, in the second lease, to divest the plaintiff of the title which he had, under the assignment to him of the first lease, to the buildings. On the contrary, the second lease expressly declared that the plaintiff should continue to be the owner of these buildings, and should remain owner of them, even though a third lease should not be given to him. And the privilege was secured to him of taking them away, provided he did so within ten days after the expiration of the term created by the second lease.

It is clear, therefore, that these buildings were not only the plaintiff’s property, as assignee of the first and lessee in the second lease, but beyond that he was to remain owner of them, even though the defendant should conclude not to give the third lease, at the expiration of the term created by the second lease. It could not for that "reason have been intended by the parties, that the defendant should become the owner of the buildings by reason of the giving of the second lease. In* addition to that, there is nothing contained either in the first or the second lease, in any manner indicating that the defendant could lawfully become the owner of these buildings, at any time, in any other way than by paying the plaintiff, or his representatives or assigns, for them. This conclusion is sustained by the clause already mentioned, contained in the second lease under which the defendant claims these buildings. For, by the literal reading of that clause, Howard, the first tenant, would have been entitled to be paid • for those buildings, if the second lease had been assigned by the plaintiff to him, before the term created in it had expired. And this would not have been the case if it had been intended that the defendant was to become the owner of the buildings when the second lease expired, without making any payment at all for them. Neither could it have been intended that the plaintiff should be divested of his title which he had acquired to the buildings under the assignment of the first lease, without, some consideration or equivalent being secured to him for the loss of his title. And yet no such consideration or equivalent has been in any way provided for him, unless the defendant be obligated to pay, on account of his refusal to execute the third lease.

As the case is presented, the defendant was bound to pay for these buildings when he refused to give the new lease. And if the second lease had been assigned to Howard for the purpose of bringing the claim for the payment within the literal terms of that lease, he would have received the money, then, only as the trustee of the plaintiff. For by his assignment to the plaintiff, his own right to it had been acquired by the latter.

The truth of the matter seems to have been that the second lease was copied very much from -the first one. And when the clause in controversy was inserted, it was" done In the same terms that had-been used for the same purpose in the first lease, without changing it so far as to adapt it to the changed circumstances produced by the ' assignment. From the other clauses contained in the lease, it appears that the lessor treated the plaintiff as the substantial lessee of the premises from the beginning, and as such, entitled to all the rights and obligations created in favor of the original tenant. And full effect can only be given to the authority conferred on Howard to transfer his rights and interests under the first lease, by holding that the plaintiff continued to maintain that relation to the defendant after he had received the second lease. And that should be held to be his relation- to the defendant, notwithstanding the restricted nature of the language used in the clause in question. For in no other way can full effect be given to the other portions of the lease, affecting this subject. And those portions appear to, indicate the paramount purpose and object of the parties. It was clearly designed that the plaintiff should only be deprived of his title to the buildings, by being paid for them; and in conformity with that design, this clause in the second lease should be so construed as to render the defendant liable to pay for them, unless a third lease be ' given to the plaintiff.

[New York General Term, November 2, 1868.

When this clause is thus construed, it imposes upon the defendant the obligation of giving the plaintiff" a new lease in default of the election on his part to pay for the buildings. He did not elect to make such payment, and the result, therefore, follows, that the plaintiff -is entitled to a new lease. The judgment should be reversed.

Ingraham, Mtdlin and Daniels, Justices.]