Opinion
No. 41/19.
02-10-1917
FINK v. BROWE CO.
Charles M. Myers, of Newark, for appellant. Coult & Smith, of Newark, for receiver.
A claim presented by Frederick W. Fink was disallowed by the receiver of the Browe Company, a corporation, and Fink appeals. Order advised affirming receiver's determination and dismissing appeal.
Charles M. Myers, of Newark, for appellant. Coult & Smith, of Newark, for receiver.
FOSTER, V. C. Mr. William A. Smith, the receiver of the Browe Company, a corporation adjudged to be insolvent, refused to allow the claim filed by the Morris County Realty Company for $14,666.66 for rent to accrue on a lease made to the corporation by the realty company for part of the premises known as Nos. 9-11 Franklin street, in the city of Newark. The lease is for the term of ten years from May 1, 1911, at the yearly rental of $2,750, payable in equal monthly installments on the 1st day of each month. From the disallowance of the claim by the receiver, this appeal is taken.
The receiver was appointed on December 20, 1915, and shortly thereafter he notified Mr. Schlesinger, the agent of the landlord, of his appointment and of the company's insolvency, and offered to continue in possession of the premises for some months if the monthly rental were reduced to $100, and that if this reduction in the rent were not granted he would vacate the premises. The realty company refused to reduce the rent, and thereupon, on December 31, 1915, the receiver surrendered possession of the premises and sent the keys to Mr. Schlesinger. The latter never acknowledged the receipt of the keys, but without consulting the receiver he immediately advertised the premises for rent in the daily papers and by printed circulars.
Some time in the summer the realty company began to make changes and alterations in the premises, and on October 1, 1916, it entered into a lease for the greater part of the premises to the city of Newark for one year for $200 per month.
The receiver was not consulted when the property was advertised for rent, or when the changes and alterations were made to the premises, or when the lease was made to the city, and in fact heard nothing from the landlord from the date of his abandonment of the premises until appellant's claim was filed with him on February 19, 1916, and no rent was demanded from him monthly as it accrued under the terms of the lease, although the receiver has paid the rent for the months of November and December, which were due at the time of his appointment.
Counsel have discussed the questions presented by this appeal as coming under two heads: (1) Has there been a surrender of the demised premises by which the lease was terminated? (2) The allowance of a claim for rent to accrue under a lease to a corporation adjudged to be insolvent.
There is no provision in the lease giving the landlord the right of re-entry for the purpose of re-letting on the tenant's account. There is a provision in the lease similar to that passed upon in Meeker v. Spalsbury, 66 N. J. Law, 60, 48 Atl. 1026, by which the landlord was entitled to enter the premises for the purpose of making "such repairs as shall be necessary therein or shall be necessary for the preservation of said building." There has been no surrender in writing of the term as required by the statute of frauds (2 C. S. 1910, p. 2610, § 2), and if the surrender is found to have taken place, it must have arisen by act and operation of law, and the conduct of the landlord in accepting the keys without objection, and in entering upon the premises without consulting the receiver, and making changes and alterations therein that were not necessary as repairs for the preservation of the building, and in advertising the premises for rent, and in renting the greater part of them for less than the balance of the demised term and for less than the annual rent fixed by the lease, without authority from the receiver and without consulting him, indicate an intention on the part of the landlord to accept the receiver's abandonment as a surrender and to hold possession of the premises on his own account.
The rule stated in Meeker v. Spalsbury, supra, and followed in a number of cases, to the effect that, when the minds of the parties to a lease concur in the common intent of relinquishing the relation of landlord and tenant, and execute this intent by acts which are tantamount to a stipulation to put an end thereto, there at once arises a surrender by act and operation of law, must be applied to the facts here, with the result that I find that there has been a surrender of the premises, and an order will be advised affirming the determination of the receiver and dismissing the petition of appeal.
This disposition of the matter makes it unnecessary to consider the other question discussed.