Grabenhorst v. Nicodemus

Stewart, J., delivered the opinion of the Court. There are two agreements between the parties involved in the case. The one being the lease of the distillery and premises, at a specified rent; and the other, in regard to the offer to sell the same property, under which plaintiffs claim one thousand dollars for the privilege given to defendant to purchase the property within twelve months. Three exceptions were taken by the defendant to the rulings of the Court. The first and second of which raise questions as to the admissibility of testimony, and the third excepting to the granting of plaintiffs’ two prayers ; and the rejection of the six prayers of the defendant. The contract between the parties in regard to the claim of the plaintiffs of one thousand dollars, is a distinct agreement for' the payment of that sum, for the privilege of purchasing the property; and involves no question of penalty or liquidated damages for its non-performance. It is not a bargain and sale of the property at $5000, but a proposition and obligation on the part of the plaintiffs, to sell it to the defendant at that price with the privilege to him to make the purchase or not, as he may determine within the year. Eor this option, which was a valuable privilege, he agrees to pay the $1000 in the event of his declining to make the purchase. The defendant acquired the right under the contract, to purchase the property for the proposed price. The plaintiffs had obligated themselves to sell at that price ; but the defendant was under no obligation to buy. He merely bound himself to pay the $1000 for the privilege of buying, and in case he did not buy. It was entirely [247] optional with the defendant to purchase the property or let it alone ; whilst the plaintiffs had abandoned the right to make sale to any one else during the year. That was a sufficient consideration for the defendant’s obligation. This we understand, to be the nature of the contract between the parties as to this particular. There is no ground for the theory, that the contract imported a bargain and sale of the property, obligatory as such upon the parties; and that the thousand dollars was provided as the penalty for its enforcement upon the defendant. Such construction would make a different contract for the parties, from what they have stipulated. We find no error in the exclusion of the parol proof, offered by the defendant in his first exception. Such testimony was clearly inadmissible, in the face of the written agreements of 16th January and 25th February, 1873, introduced as evidence by the defendant himself. In the absence of these agreements, whether the proposed testimony might he adduced to prove waiver, or extension of the time, for performance of the original agreement, notwithstanding the Statute of Frauds requiring the contract as to the sale of lands to be in writing; or the rule of the common law disallowing parol testimony, to contradict, add to, or vary the terms of the written contract, it is unnecessary to decide. There was error in the refusal of the testimony offered by the defendant in the second exception. The plaintiffs had rented to the defendant, the distillery and premises for one year, at $125 per month. According to the terms and provisions of the lease between the parties, the property was rented to be used and employed by the defendant, as a distillery; the defendant was to repair and improve the property, as he might desire at his own expense, but all such improvements, fixtures and machinery put upon the distillery or premises rented, to become the property of the plaintiffs at the termination of the lease, without cost to them. [248] The distillery could not he run and conducted hy the defendant except in compliance with the'Revenue Laws of the United States, appilicable thereto. This the parties must be presumed to have known. The plaintiffs having made the lease to the defendant for such purpose, must be considered as having entered into such contract subject to the provisions of the laws regulating that pursuit; and the contract between the parties is affected thereby. Under the - Internal Revenue Acts of Congress, (see Revised Statutes, Title 35, sec. 3262,) the bond of the defendant as a distiller, renting and not owning the property in fee, was not authorized to be approved, and he could not lawfully carry on the distillery, unless he filed with the collector the written consent of the plaintiffs as the owners of the property in fee. The plaintiffs having rented their property for such purpose, if they refused to give their consent in writing to the defendant, as required by the law, preliminary to the use of the distillery, it would be unjust towards the defem dant for them to undertake to exact rent for the premises, if they had failed to supply him with the necessary legal muniment, to enable him to carry on the business. It is not to be intended that they designed that the defendant should make use of the distillery in violation of the law. The default of the plaintiffs in that particular, would amount to “ constructive eviction,” to all intent and purposes, so far as the legitimate employment of the property is concerned. . Taylor’s Land, and Tenant, sec. 380. The obligation of the plaintiffs to give their consent as demanded by the law, must be implied as a necessary, incident to the, lease in question, as fully as if there had been a positive stipulation to that effect. Although- there was no express covenant for the legal employment of the property leased, as a distillery, it is a necessary implication from the circumstances and nature of the lease. [249] The payment of the rent is to be taken as the equivalent and consideration for the beneficial enjoyment of the premises as a distillery, so far as such consent could contribute to that result; and the lessors had no right to •withhold it, and yet expect to be paid the stipulated rent; such act on their part was indispensable to the consummation of the lease between the parties. They were as much bound, as the owners of the fee of the property, to give their written consent, as to allow the tenant to take possession of the distillery and premises, which although not mentioned, was an implied covenant affecting the lease. This contract like any other must be expounded to give effect to the intention of the parties, according to the reasonable import of the terms of the instrument, the circumstances affecting it, the character of the property, the purposes for which it was leased, and the employment to which it was to be devoted. The mutual obligations of the parties growing out of the contract, must be understood and defined with reference to all these considerations. Where there are no express stipulations upon the subject, such facts furnish sufficient evidence, from which the agreement may be inferred between the parties, quite as controlling as positive stipulations. Without the written consent of the lessors, the lease of the property as a distillery, would be a nugatory and incomplete act. See Taylor’s Landlord and Tenant, secs. 244-245-241-252. The lessors having instituted the action for the recovery of the rent, the tenant has the right to recoup damages, for any breach or non-performance of duty on their part, to the extent of the rent. ' Taylor’s Landlord and Tenant, secs. 311-314-318. Such being the view we take of the contract between the parties, and the rulings of the Court below, in the first [250] and second exceptions, there was error in the third exception, in the granting of the plaintiffs’ first prayer, but their second prayer was properly granted, and the defendant’s prayers refused. (Decided 14th April, 1875.) (Decided 24th June, 1875.) Judgment reversed, and new trial ordered.