Robinson v. Kettletas

The Vice-Chancellor : This bill is filed for a twofold obj=ct: an extension of the lease for three years, accor [69] ding to the covenant in the original lease ; and, for payment of the value of the house built on the lot. With respect to the first: I am inclined to think that the covenant is not such as this court could undertake to see specifically performed, because the rent for the renewed or additional term of three years was not fixed, but left open to be agreed upon between the parties or to be determined by arbitration : see the cases on this subject referred to by the Assistant Vice-Chancellor,in Whitlock v.Duffield, 1 Hoffman’s Ch. R. 110. That branch of the case, however, it has become unnecessary to consider, for the three years have now expired. Then, as respects the covenant to pay for the value of the buildings. The objection goes to the want of power in the lessors, being trustees under the will of John Gardner, deceased, to grant a lease, with a covenant to pay for improvements. There is not in the will an express power to make leases ; but such a power is, necessarily, implied from the devise of the whole estate to the trustees and from the nature of the trusts they are to execute. It is incident to the estate vested in the trustees and is in conformity with the trusts that the property should be leased out to the best advantage. The bill contains enough to show that leases for twenty-one years, with covenants on the part of the lessees to erect substantial buildings for respectable family residences, and on the part of the trustees to pay for such improvements at the end of the term, was a judicious exercise of the power, and, in its results, of great benefit and advantage to the estate. I concur with Chancellor Kent in a written opinion given by him to the trustees on this point. The covenant is, at any rate, binding in law upon the persons who executed the lease. And the next question is, whether it is such a covenant as this court can take cognizance of and undertake to enforce. It is an absolute covenant to pay at the expiration of the lease “ the value of such buildings as shall be erected in pursuance of the leaseand it then provides how such value shall be ascertained, that is by sworn, appraisers to be chosen by the parties and through an umpire, if necessary. The bill shows that the present trustees, the defendants, have refused to appoint any appraiser or to pay; that they receiv [70] ed the rent under the original lease to the end of the term, of twenty-one years thereby granted ; and then took legal measures to obtain possession of the lot with the dwelling house upon it, erected by the lessee. They are thus taking to themselves, as trustees, the benefit of the tenant’s improvement without paying for it, and this court is asked to interpose and compel them to do justice. We are not now dealing with the persons who executed the lease against whom there might be a remedy at law, but with the trust estate itself and the persons who now represent it and over whom this court has peculiar and exclusive jurisdiction. This court can ascertain the value and amount to be paid and direct its payment out of the trust estate. And I think that this case may be distinguished from the class of cases in the books where the court has refused to entertain a bill for specific performance of a covenant or agreement where the rent or terms of a lease or the price has not first been ascertained in the mode pointed out in the contract. I must overrule the demurrer, with costs, giving liberty to answer.