Decker v. Sexton

MoAdam, J. This was a proceeding by the landlord'to-recover possession of the premises known as No. 55' Whitehall street,, this city, for holding over after the expiration of the term. - The pctition alleged a- monthly letting from July 1 to August .1, 1896) by the landlord- to Thomas E. Sexton, the-tenant, the other parties being under-tenants or assigns. . The tenant Sexton did not appear. The other-parties answered, denying the monthly letting and holding' over alleged, and setting up a written lease, dated April 13, 1896, executed by the landlord: to .Thomas E.-Sexton, for. five-years from May .1, 1896. The monthly letting was made under the following circumstances: It appears that, on April 13,.-1896, the landlord entered into an agreement with Sexton, the tenant, by which he. demised- the premises in question for the term of fike years from May 1, 1896,-. to May 1, 1901, at the- yearly rental of $5,000 for the first- year, and . $6,000 per year, for the' remaining four years, in equal * monthly payments in advance. . The premises prior to the demise. had been occupied as a storage warehouse, and by the agreement Sexton undertook to put and keep them in a proper condition for the- purposes of a hotel business, and to that end agreed -to make ■ all necessary alterations and repairs in and about the premises,, subject to the approval of the landlord. The agreement contains the provision that the tenant, will not , assign the lease, nor let or underlet the whole or any part of the premises, without the written consent of the landlord, under penalty of forfeiture and damages) and the seventh subdivision reads as follows: “ It is hereby understood and agreed by the said Sexton that' he 'will, immediately upon the execution óf " this lease, proceed' to alter the said premises, subject to the approval of the said Decker, as aforesaid, and to fit up and to furnish the said premises for the. purposes of the business aforesaid, at a,cost not-less than, $5,000) . and shall, when said ■ alterations) fitting and furnishing are completed,. "and on or' before the 1st day of May, 1896, properly execute and deliver to the said Decker a chattel - mortgage upon all — 61 — of the personal property in the said building, including bar and bar fixtures, chandeliers and other gas fixtures, pool and billiard table or tables and hotel and other furniture of every description in said premises, and of all of which said personal property the said Sexton shall deliver to the said Decker a full and true inventory on.or before May 1, 1896. The said chattel mortgage shall be a first lien on said property, and shall be conditioned upon, and shall be held by the said Decker as collateral security for, the performance by the said Sexton of all the terms, conditions and agreements of this lease by the said Sexton to be kept and performed, and for the payment by the said Sexton to the said Decker of the rent hereby reserved for the said leased premises. It is the intention of the parties hereto, and this instrument is executed by the said Decker upon the distinct understanding that this lease shall be delivered to and held by Messrs. Townsend & Dyett, attorneys, of the' city of New York, in escrow, and is to be delivered by them to the said Sexton and is to take effect only from the time that the said Decker shall' certify in writing to the said attorneys that he (the said Decker) has received the said chattel mortgage as above provided.” To enable Decker to comply with this provision, and thereby make the agreement operate as a lease, it was orally agreed that the premises should be rented to Decker from April 13, 1896, to May 1, 1896, and the tenancy thus created was with the like object renewed from May 1 to June 1, from June 1 to July 1, and from July 1, to August 1, 1896. To prevent any misunderstanding and to obviate any question of waiver, an agreement in the following words was entered into: “ Received, N. Y., May 1, 1896, from Thomas E. Sexton, the sum of four hundred and sixteen and 66-100- dollars in full payment of the ^ent to June 1, 1896, of the premises No. 55 Whitehall street, in the city of New York. The time of the said Sexton to perform the terms and conditions of ‘subdivision seventh’ of the agreement of lease between said Sexton and myself, dated April 13, 1896, is hereby extended to June 1, 1896. The payment or acceptance of said rent or the execution of this paper is not intended to be, or to have the effect of a delivery of the said lease, which is now held in escrow by Townsend & Dyett, Esqrs. David H. Decker.” “ I hereby agree to the above extension upon the terms therein stated. N. Y., May 1, 1896. Thomas E. Sexton.” " — 62 — On June 1 and July 1, 1896, similar agreements were executed by which the time was extended to August 1, 1896, on the same condition. The' landlord claimed that the terms and conditions óf “ subdivision ’ seventh ’■’ were not complied with, in that Sexton did not execute to him a chattel mortgage upon the property therein' particularly mentioned; which became a first lien thereon, and that he, said Decker, in consequence, had not certified in writing to the said attorneys that he had received the chattel mortgage as therein provided; and that for want of the delivery of such a mortgage and certificate the agreement had never taken effect as a lease, and that the tenant had never acquired any estate in the lands other than that conferred by the monthly hirings, which had expired August 1, 1896. It is apparent, from the language of subdivision seventh and the three extensions, that the landlord wa's not.to be concluded on the subject of delivering the lease until he had expressed his satisfaction in regard to the mortgage, agreed to be given him; for subdivision seventh expressly provides that the lease “ is to take effect only from the time that the said- Decker shall certify in writing to the said attorney that he (the said Decker) has received the said chattel mortgage as above provided.” , The objections to giving the certificate were not placed on grounds which -were capricious-; it was refused for reasons which would probably induce a man of ■ ordinary prudence" to act as .Decker did. The objections were: 1.. That there was already on record a chattel mortgage to the Hnpfel Brewing Company for $2,080 on all the chattels and property in or upon the' premises in question. This mortgage is dated April 30, 1896, payable one. day after date,'-and was filed May 1, 1896. . , 2. That there were unpaid claims of mechanics and material-men, which culminated in two mechanics’ liens upon the property, one by Sylvester A. Murphy for $1,142, for making alterations and extensions- in the building and furnishing material's and labor necessary for the same, and another by John Murphy for $62-8.:30, for plumbing' and gasfitting work done in the building. 3.. That Lord' & Taylor -had a large bill for materials furnished the premises, which had not been paid; and that a cash register 'on the premises' had not been paid fór, ánd the vendors, claiming a sale on the instalment plan, had threatened to take it away. ' — 63 — There was also a replevin suit pending to recover possession of part of the property put into the building by Sexton. Sexton, the tenant, testified that the understanding with the landlord was that the hiring should be by the month, as stated by the landlord, and that when he, Sexton, should produce a satisfaction piece of the Hupfel mortgage, and bring evidence that the mechanics who did the work on the premises and the dealers who had supplied the furniture, had been paid, the lease was' to become operative, but not before. It was claimed by the under-tenants that the Hupfel mortgage had been satisfied. But the evidence shows that, although a satisfaction piece had been executed and sent to the Limbeck & Betts Eagle Brewing Company, the party advancing the money for it, the delivery was not accepted by it, for that company insisted it was to have an assignment of the mortgage, and that it was to be held by it as security. Mr. Buster, the attorney for that company, testified that it was to have a first mortgage on everything in the place, and that the Hupfel company had by telephone agreed to assign its mortgage to his company. The satisfaction piece was not placed on record for that reason, but was kept by the Limbeck company as evidence of the fact that it was entitled to the benefit of the Hupfel mortgage and was in effect the equitable assignee thereof. The under-tenants also insisted that the claims of mechanics who subsequently acquired liens did not impair the security intended to be given to the landlord,' but merely affected the lessee’s interest in the premises. Even such an effect would be an impairment of the plaintiff’s rights as mortgagee; and independently of that fact, the liens under the authorities might be enforced even as against the freehold, upon the theory that the owner had by his agreement expressly authorized the repairs to be made. All * that the statute requires as to the lienor’s right to payment is that the labor shall be done upon or the material furnished for the building with the assent of the owner. Laws 1885, chap. 342, § 1; Pell v. Baur, 133 N. Y. 377. The design of the act was to charge the land with debts contracted in improving it, if the owner consented thereto, and the contract itself and the fact that the work was prosecuted under it with the owner’s knowledge authorize a finding of consent. Schmalz v. Mead, 125 N. Y. 188. A mechanic or materialman has an inchoate right of lien from the time of doing his work or furnishing the material, which — 64 — - becomes, complete on filing the notice required ,by the. statute. This contingent liability made the landlord interested in the payment of all mechanics and materialmen who furnished work or material to the alteration and improvement of the building.. ■. The contention of the under-tenants that the unpaid bills, for which liens had not been obtained, would not have affected the ■ landlord or the security 6f his mortgage^ is thus unavailing; for it was certainly not intended that the landlord should be. obliged, to defend replevin suits' or foreclosure liens and the like,.. for the protection of his rights in the premises; and all these might follow if the mechanics and materialmen were'not paid. At all events, much of this was left, by the language of 'subdivision seventh, to the decision of the landlord, who was to have time to reflect upon the consequences, and was not to be concluded until he had first certified in writing that he had obtained a chattel mortgage which • gave him a first lien on the property, according to the spirit and intent of the agreement. Under these circumstances, it would seem that the estate of the tenant under the written lease never vested, and that the landlord was" entitled to resort to the statutory remedy, to remove the tenant and those holding under him by virtue of the oral agreement. - Even if these results followed, the under-tenants maintain there was a waiver of all right on the part of the landlord to object, because, in a conversation had by one of them with the landlord’s son, his general agent, the son had said that the Hupfel mortgage, being a brewer’s, mortgage, was of little or no consequence, and that he would speak to his father about it. There is no .evidence that the subject was ever- mentioned to the father, or that he had ever said or done anything which could be construed as an - assent to any such proposition; and the son testified- that he had never . made any .such statement. The son had- no power by any such conversation to waive the privilege, which the .landlord had re: ■ served to himself, that he should not be bound until he had first certified in writing that' the chattel mortgage was satisfactory to hi-m. The son might just as well have attempted, on some other contract made by his father respecting realty, to orally waive the giving of a first mortgage, by the simple expression that a second was equally good. The difficulty is that the principal might not share the same opinion, and insist, as he lawfully might, that the contract under seal should be enforced as he made, it, Besides, the conversation alleged was not had with the lessee, but with one of the under-tenants. — 65 — The under-tenants also insist that there was a waiver because the mortgage to the landlord was filed July 17, 1896, and. this was evidence of an acceptance of it under the contract. Mr. Levy, a clerk in Townsend & Dyett’s office, explained this as follows: “Mr. Sexton came into my office with Frederick H. Decker. They came there by appointment for the purpose of executing that mortgage. The mortgage was read over to Mr. Sexton and executed. I stated to Mr. Sexton that it would be held' by me.” * '* * “I even stated to him that I might file it for the purpose of having it on record for what it is worth, and in the meantime or immediately after I would have the record searched, if the* mortgage proved to cover in the first place the property contemplated by the seventh subdivision of the lease, and proved to be a first lien on that property, and if in addition to that Mr. Sexton had satisfied all the mechanics’ liens, the claims of the men that worked about the place, and proved to us that he had paid for all the property in that place, and which was embraced in the mortgage, that Mr. Decker would accept that as the mortgage under subdivision seventh of the lease. Mr. Sexton assented to that and said all claims would be paid.” Frederick H. Decker, the landlord’s son, and Sexton, the tenant, substantially corroborate this story. It also appeared that the mortgage had never been delivered to the landlord, that he had never seen it, that he did not direct the filing of it, and knew nothing of it except from what he had heard at the trial. It is difficult to found waiver on these facts. Waiver implies an election of the party to dispense with something of value, or to forego some advantage which he might at his option have demanded or insisted upon (Warren v. Crane, 50 Mich. 301; State Ins. Co. v. Todd, 83 Penn. St. 275), and must be by one in possession of full knowledge of the material facts, and with intent to Waive. 28 Am. & Eng. Ency. of Law, 527; Bishop on Cont. (Ed. of 1887), § 792. The waiver must be supported by. an agreement founded upon a valuable consideration, or the . act must be such as to estop the party from insisting on the performance of the contract. Ripley v. Aetna Ins. Co., 30 N. Y. 164. In Underwood v. Farmers’ Ins. Co., 57 N. Y. 505, the court said: “The doctrine of estoppel lays at the foundation of the law, as to waiver. While one party has time and opportunity to comply with a condition precedent, if the other party does or says anything to put him off from his guard, and to induce him — 66 — to believe that-the condition is waived, , or that a strict compliance with it will not be insisted on, he is afterward estopped from claiming, nonperformance of the condition. Unless there is .-some consideration for a waiver or some, valid modification .of , the agreement between the parties which contains the condition, I think there can be no waiver of a condition precedent,. except there be in the case an element of estoppel,;” and at page 506:- “ The true rule, I think, is laid down in Ripley v. Aetna Ins. Co., 30 N. Y. 136, as follows: ‘It seems to me that a waiver, to be operative, must be supported by an agreement founded on a valuable consideration; or,, the act relied on as a waiver must be such-as to estop a party from- insisting on performance of the condition.’” See, also, Shapley v. Abbott, 42 N. Y. 448. - These cases have not been questioned, except in their application to proofs of loss in insurance cases. Smith v. Home Ins. Co., 47 Hun, 40. In Stenton v. Jerome, 54 N. Y. 488, the court said: “It is a principle as old as the common law, that a cause of action once vested can only be discharged by a -release under seal or the receipt of something in satisfaction.” See also McKnight v. Dunlap, 5 N. Y. 544, and cases cited; Christianson v. Sinfard, 19 Abb. Pr. 223; Baylis v. Usher, 4 Moore & Payne, 791; Bowman v. Teall, 23 Wend. 309; Willoughby v. Backhouse, 4 Dowl. & Ryl. 539. The agreement as to the lease was executed by the landlord personally, and not by the son as his agent, and the latter had no authority to alter its provisions contrary to his father’s wishes. There being no proof that the landlord by any act or word personally waived the performance of the seventh subdivision of the lease or any part thereof, waiver must be found in the alleged' conversation with the son, or that defense must be deemed wholly unproved. The conversations with the son were objected to and admitted under exception. ■ . " ..The admissions or declarations of an agent aré received against the principal, not as admissions or declarations merely, but - as parts of the res gestae; hence, only such as accompany the transaction in which the agent acted can be proved, and what he said at a subsequent time is inadmissible. Luby v. Hudson River R. R. Co., 47 N. Y. 134, 133; Thallhimer v. Brinckerhoff, 4 Wend. 394, 397; Fogg v. Child, 13 Barb. 246; Budlong v. Van Nostrand, 24 id. 25; Isles v. Tucker, 5 Duer, 393; Hubbard v. Elmer, 7 Wend. 446; Kelly v. Kelly, 2 E. D. Smith, 250; Vail v. Judson, — 67 — 4. id. 165; Dart v. Walker, 3 Daly, 136. The rule excluding the agent’s declarations unless of such a, character applies with equal force, whether the agent is a general or special one, or the principal an individual or corporation. White v. Miller, 71 N. Y. 118. Without further discussing the effect of the exception to the admission of the agent’s declarations, it is apparent that the evidence received as to the alleged conversation did not operate as a waiver of the condition stated. There was no estoppel, for the party sought to be estopped must do some act, or make some admission with an intention of influencing the conduct of another, or that he had reason to believe would influence his conduct, and which act or admission is inconsistent with the claim he professes to make. The other party too must have acted upon the strength of such admission or conduct. Grange v. Palmer, 56 Hun, 487; Brown v. Bowen, 30 N. Y. 519; N. Y. Rubber Co. v. Rothery, 107 id. 316; 7 Am. & Eng. Ency. of L. 17; Bigelow on Est. (4th ed.), 620. The justice charged the jury that if they found that the landlord’s son knew of the Hupfel mortgage, and had the conversation with the under-tenant before referred to, and thereafter the mortgage to the landlord was filed, they might infer from such facts that there was a waiver of the condition contained in the seventh subdivision, and in that case the lease became operative. The landlord’s counsel excepted to this portion of the charge, and the exception is fatal to the order. It was not warrantable to submit such a question to the jury with no evidence upon it tending to show a waiver. It was equivalent to telling the jury they might find for the tenant if they pleased. See Palmer v. Kelly, 56 N. Y. 637. As there was no waiver of the seventh subdivision the written lease never became operative, and as a consequence the tenant and those in possession under him held possession of the premises by force of the oral hiring, and that alone. That the oral hiring expired August 1, 1896, appears by the evidence of the landlord, his son, and of Sexton, the tenant, corroborated and confirmed by the three written receipts and extensions from May 1, 1896, to August 1, 1896, and not contradicted. In Lomer v. Meeker, 25 N. Y. 363, the court said: “ The witness was not impeached or contradicted. His testimony is positive and direct, and not incredible upon its face. It was the duty of the court and jury to give credit to his testimony. The .positive testimony of án unimp'eáched, uncontradicted witness cannot bfe.dis — 68 — regarded by court or jury arbitrarily or capriciously. They, are bound to believe, for judicial purposes, such testimony, and it would be,-in an instance like this, the clear duty of the court to set aside the verdict pf a jury founded lipona disbelief of clear, uncontradicted and undisputed evidence.” . See also Kelly v. Burroughs, 102 N. Y, 93, 95; Plyer v. German Am. Ins. Co., 121 id. 691, 692; Dwight v. German Ins. Co., 103 id. 341, 358, 359; Herring v. Hoppock, 15 id. 409, 413; Storey v. Brennan, id. 524; Elwood v. Western U. Tel. Co., 45 id. 549; People v. Cook, 8 id. 67; Arms v. Arms, 13 N. Y. St. Repr. 196; Newton v. Pope, 1 Cow. 109, 110; Branch v. Levy, 46 N. Y. Supr. Ct. 428; Cunningham v. Gans, 61 N. Y. St. Repr. 249. The "exceptional rule, that where the witnesses are interested the case must be submitted to the jury, cannot be applied here, for the landlord and Ms son were not only corroborated by Sexton, the tenant, but by the writings as well. The settled'rule is that a direction to find a verdict for .one of the parties is always proper where a contrary verdict would be set aside on the ground that it was against evidence. People v. Cook, 8 N. Y. 67, 75; Herring v. Hoppock, 15 id. 409; Storey v. Brennan, 15 id. 524; Rudd v. Davis, 7 Hill, 529; McMullen v. Hoyt, 2 Daly, 278; Cagger v. Lansing, 64 N. Y. 427; cases cited in Metropolitan Bk. v. Sirret, 97 id. 324; Williams v. Guile, 117 id. 347; Bulger v. Rosa, 119 id. 459; Foley v. Royal Arcanum, 78 Hun, 222. In Wilds v. Hudson River Railroad Co., 24 N. Y. 433, the court 'said: “No legal principle compels him” (the judge) “to allow a jury to render a merely idle verdict. The. full extent of this position has been held by this" court (Johnson v. Hudson River R. Co., 20 N. Y. 73), in saymg that ‘to carry a case to the jury, the evidence on the part of the plaintiff must be such as, if believed,-would authorize them to find that the injury was occasioned solely by the negligence of the defendant.’ Can this be true without' holding that, in every case where a yerdict would be set aside as against the clear weight of evidence, the court should take the decision of the case from the jury? Certainly, it is not easy to conceive any other definite position which would be consistent with the decisions 18 N. Y. 422.” The court ought to have directed a verdict in favor of the landlord as requested at the trial (Douglass v. Seiferd, 18 Misc. Rep. 188),’ and the exception to the refusal presents error. The tenants’ counsel challenged the landlord’s right to maintain the proceeding, on the ground that he had not complied with chap — 69 — ter 303 of the Laws of 1882, which now forms part of the Revised Statutes (9th ed., vol. 3, p. 2546), and reads as follows: “No monthly tenant shall hereafter be removed from any lands or tenements in the city of New York or in the city of Brooklyn on the grounds of holding over his term (except when the same expires on the first day of May) unless at least five days before the expiration of the term the landlord or his agent serves upon the tenant, in the same manner in which a summons in summary proceedings is now allowed to be served by law, a notice in writing to the effect that the landlord elects to terminate the tenancy, and that unless the tenant removes from said premises on the day on which his term expires the landlord will commence summary proceedings under the statute to remove such tenant therefrom.” Prior to the passage of this act a monthly tenant could be dispossessed without the service of any notice other than a summons or precept issued according to the command of the statute; and the only condition imposed by the act is to require notice to the tenant, for while he might be in possession under a monthly holding the landlord was_ not chargeable with notice of the nature or duration of the sub-tenancies which the tenant might create. Notice in this case was served upon the tenant, and that complied with all legal requirements. Hence, there is no merit in the objection made. The jury found a verdict in favor of the tenant and under-tenants, and the landlord moved for a new trial under chapter 748 of the Laws of 1896, which motion the justice properly denied on the sole ground of want of power. This act Authorizes a justice of a District Court to set aside the verdict of a jury rendered “ in an action,” and does not apply to summary proceedings, which are denominated special proceedings as distinguished from actions. Dorschel v. Burkly, 18 Misc. Rep. 240. The only remedy open to the landlord after the verdict was the appeal which he has taken. The final order must be reversed and a new trial ordered, with costs to the appellant to abide the event. . Daly, P. L, and Bisoiiokf, J., concur. Final order reversed and new trial ordered, with costs to appel- ■ lant to abide event.