Summary
approving of the use in summary proceedings of the practice of relieving against forfeitures of valuable lease terms based on defaults in giving notice of an election to exercise a renewal option
Summary of this case from Vita v. Dol-Fan, III, Inc.Opinion
Argued January 6, 1953
Decided March 5, 1953
Appeal from the Supreme Court, Appellate Division, Third Department, BARNES, J.
Joe Schapiro for appellant.
Edward H. O'Connor, Jr., for tenant-respondent. N. Earle Evans, Jr., for interveners-respondents.
In this summary proceeding (Civ. Prac. Act, art. 83), brought in October, 1951, by the landlord (appellant here) to recover possession of premises used by the tenant (respondent here) in his bowling alley business, the question is: Did the Appellate Division err in excusing, on the ground of an honest mistake by the tenant, and absence of prejudice to the landlord, the tenant's delay in serving a notice of intention to exercise an option to renew the lease? Respondent had, in September, 1950, become the tenant by assignment of a lease made, by this landlord's predecessor in title, on October 20, 1941, which contained this language: "The term of this lease shall be for ten years, commencing October 1, 1941, and ending October 1, 1951. Second party is to have the option at the expiration of this lease to renew the said lease in the following manner: The option is to extend for an additional period of ten years and is to be exercised annually thereafter if the party of the second part so desires to continue the lease, by giving a written notice to the party of the first part on or before the first day of September of each succeeding year."
On September 6, 1951, at a time when the tenant had done nothing toward exercising the option to renew, the landlord wrote the tenant a letter, notifying the latter that the landlord wanted possession on October 1, 1951, that is, on the date of the expiration of the original term. One week later, on September 13, 1951, the tenant served on the landlord a paper, in which the former gave notice that he intended to exercise, for a further period of ten years, his renewal option. The landlord, claiming that the time to exercise the privilege had expired on September 1, 1951, refused to agree to the renewal, and this proceeding was begun, in the County Court, on October 6, 1951.
As both courts below held, the above-quoted clause is ambiguous. The County Court, however, thought that, since, as it held, the notice had not been given on the law day, nothing could be done by way of relief for the tenant. The Appellate Division, however, reversed and dismissed the proceeding. It pointed out that there was confusion in the lease language, as to whether or not a written notice was necessary to effecuate a first renewal after the end of the original term. As facts, it found that the tenant had intended to accomplish a renewal, that his failure to notify the landlord was the result of an honest mistake, that the landlord suffered no damage by the brief delay, and that to evict the tenant would cause the tenant much hardship, because of his investment in the business, etc. Citing New York Life Ins. Trust Co. v. Rector of St. George's Church (64 How. Prac. 511), and Matter of Topp (81 N.Y.S.2d 344), the Appellate Division gave the tenant the benefit of the rule or practice in equity which relieves against such forfeitures of valuable lease terms when default in notice has not prejudiced the landlord, and has resulted from an honest mistake, or similar excusable fault. We do not doubt that such a rule exists and that it was appropriately made use of here (see Reed v. St. John, 2 Daly 213, 217; 1 McAdam on Landlord and Tenant [5th ed.], p. 721; 2 Pomeroy, Equity jurisprudence [5th ed.], § 453b; Fountain Co. v. Stein, 97 Conn. 619). The County Court's opinion here cited Fidelity Columbia Trust Co. v. Levin ( 128 Misc. 838, affd. 221 App. Div. 786, affd. 248 N.Y. 551), but in that lease there was no ambiguity. The tenant there put forward various reasons why, as he thought, the tardy notice was, nonetheless, effective. Apparently, there was no ground for giving equitable relief to the tenant, and, in any event, none was given, but the Special Term opinion in that very case recognized the existence of the rule that, "`in case of mistake, accident, fraud or surprise, relief may be obtained in equity'" (see 128 Misc., p. 844). We note, in passing, that section 1425 of the Civil Practice Act specifically authorizes the use of equitable defenses in such landlord-tenant proceedings.
The Appellate Division, in dismissing the proceeding, gave expression to its own construction of the ambiguous renewal clause, above quoted. We neither approve nor disapprove that construction. This summary proceeding under article 83 of the Civil Practice Act is of purely possessory character, and the only issue before the court was as to the right of possession, as of October 5, 1951 (see Quinn v. Quinn, 46 App. Div. 241, 243; Hoffman v. Hoffman, 212 App. Div. 531, 534; Matter of Gladstone v. Drew, 257 App. Div. 696, 697; Nemetty v. Naylor, 100 N.Y. 562, 566). A proceeding like this one cannot validly produce a declaratory judgment as to the rights of the parties as of times subsequent to its commencement, so we are deliberately leaving undecided any such dispute which may since have arisen, or may arise hereafter, and the settlement of which dispute might require a complete and definitive construction of the lease provision as to renewal.
The order should be affirmed, with costs.
LOUGHRAN, Ch J., LEWIS, CONWAY, DYE and FULD, JJ., concur with DESMOND, J.; FROESSEL, J., concurs in the result.
Order affirmed.