Julian v. Berardini

Scott, J. In April, 1905, the plaintiffs and defendant verbally agreed to a lease from defendant to plaintiffs; of a store in Mulberry street, for the term of five years. A written lease was contemplated, but was never executed, because defendant was contemplating .mortgaging the property and apprehended that he might find difficulty in doing so if it were encumbered of record by a long lease. However, the plaintiffs, with defendant’s consent, entered into possession of the premises and paid one-half a month’s rent, until May first, and, thereafter, rent in advance, on the first of May and June, for those months. On the last day of June, the plaintiffs moved out and abandoned the premises. At the time of making the oral agreement for a five years’ lease, and in contemplation that such a lease would be made, the plain [120] tiffs deposited with defendant $300 as security, and this they now sue to recover. The defendant counterclaims for the rent, at the agreed rate, for the month of July, and upon this counterclaim has succeeded. The one question involved in this appeal is as to whether the plaintiffs, under the circumstances, held as tenants from year to year, or from month to month. It has been held in numerous cases and is perfectly well settled, that a parol lease or agreement for a lease for a longer term than one year is absolutely void, and creates no relation of landlord and tenant, even though the tenant may enter into possession and pay rent. Such entry and possession, however, implies, in contemplation of law, a new contract of hiring, quite distinct from and independent of the void parol agreement; though the latter may be resorted to as a means of determining the terms and conditions of the new contract. The term of a lease is obviously one of its most important conditions and, where a new implied lease arises, under the circumstances disclosed in this case, it oftentimes becomes most important, as it is here, to determine whether the new letting is by the year or by the month. To determine that question, reference has generally been made to the specification of the rent as contemplated by the void agreement. Where that agreement provided for a yearly rental, although to be paid in monthly installments, it has been inferred that the new agreement was for a yearly tenancy, especially when the tenant has held' for one year and part of another. Laughran v. Smith, 75 N. Y. 205; Coudert v. Cohn, 118 id. 309. Where, on the other hand, the proposed void lease provided for a monthly rental, the inference has obtained that the new letting was by the month. Gilfoyle v. Cahill, 18 Misc. Rep. 68; Lawrence v. Hasbrouck, 21 id. 39. The crucial question of fact, therefore, in this case is what was agreed to be inserted in the contemplated lease for five years as to the character of the rent. If the learned justice held that the agreement was for a yearly rental, as he must have held, his conclusion on this point is clearly against the evidence. Hot only did the plaintiffs testify that the agreement was for a monthly rent, but both the defendant and his [121] clerk testified that the agreement was to lease the store “ at $135. a month.” There is no evidence to the contrary, except that defendant, on being recalled, testified that the yearly rental of the store was $1,620. This was evidently a mere computation, and he did not say, nor did the attorney who drew the unexecuted lease testify, that the agreement was for a yearly rental. Assuming then, as we must, that the oral agreement was for a lease with a monthly rental, the case stands on all fours with Gilfoyle v. Cahill, supra, and the judgment was erroneous. Ido importance is to be attached to the apparent disproportion between the amount of the deposit for security and the amount of the monthly rent, for it clearly appears that the deposit was made when a lease for five years was agreed upon and contemplated. Upon the case made, the plaintiffs were entitled to leave the premises at the end of any month; and having elected to do so, they are entitled to a return of their deposit. Bis chore and MacLeah, JJ., concur. Judgment reversed and new trial granted, with costs to appellants to abide event.