Summary
In McCready v. Lindenborn (supra, at p. 408) the court declared: "The breach of an agreement to pay money in installments is not a breach of the entire contract and will not permit a recovery of all the damages in advance.
Summary of this case from Indian River Islands Corp v. Manufacturers Tr. Co.Opinion
Argued October 27, 1902
Decided November 11, 1902
Morris J. Hirsch for appellant. W.P. Prentice for respondent.
While the complaint is indefinite and the theory of the pleader uncertain, no motion appears to have been made to correct these defects, and if the plaintiff was entitled to recover anything according to a reasonable construction of her complaint, it should not have been summarily dismissed, but she should have been permitted to put in her evidence. The complaint and bills of particulars, when read together, set forth one cause of action for the non-payment of the rent reserved for the month of December, 1894, and another for breach of the covenant to pay any deficiency in case of re-entry for condition broken. An effort was made to set forth a third cause of action for a total breach of the lease, but without success. While the object of the pleader was to recover all the damages in a single action brought before the expiration of the term, it does not follow that because she cannot recover all she may not recover any.
The rent for the month of December, 1894, was payable in advance, and, hence, became due before she re-entered the premises, and while the lease was in full force. She distinctly alleges demand of the rent under the lease for that month, and that the defendant refused to pay it. The right of action upon the covenant broken prior to re-entry survived that act, and the plaintiff was, at least, entitled to recover rent, as such, for the month named.
This conclusion requires an affirmance, for if the plaintiff is entitled to recover at all the order of the Appellate Division sustaining her exceptions and granting a new trial must be affirmed, and judgment absolute rendered against the defendant in accordance with his stipulation. As, however, there must be an assessment of damages by a sheriff's jury or a referee, we make some further suggestions in aid of the investigation that is still necessary.
When the plaintiff re-entered under the defeasance clause no further rent, as such, could accrue, for the lease proper was at an end, and the relation of landlord and tenant no longer existed. ( Hall v. Gould, 13 N.Y. 127; Michaels v. Fishel, 169 N.Y. 381, 387.) While the recovery of judgments for rent recognized the lease as existing up to the time when the last judgment was entered, and thus waived the right to re-enter for any covenant then broken, it constituted no waiver of the rights springing from breaches subsequently made. ( Jackson v. Allen, 3 Cow. 226, 230; Woodfall's Landlord Tenant, 324; Wood's Landlord Tenant, 455.)
One unbroken covenant survived re-entry, because it provided expressly for that contingency by authorizing the lessor to relet the premises and requiring the lessee to pay any deficiency in equal monthly payments as the amount thereof should, from month to month, be ascertained by deducting from the rent reserved the rents received, less the expense of such repairs as the tenant covenanted to make and less also, as is reasonably to be implied from authority to relet, the reasonable expenses of reletting and collecting. By the express contract of the parties a separate and independent cause of action arose under this covenant every month when there was a deficiency ascertained in the manner provided. The plaintiff was at liberty to allow the causes of action for monthly deficiency to accumulate and to recover upon several at the same time, but she could not recover any deficiency until it had actually accrued and had been ascertained in the mode provided by the covenant. The defendant agreed to pay "as damages for the breach of the covenant for rent" the difference between the rent reserved and the rent received "in equal monthly payments as the amount of such difference shall from time to time be ascertained." Aside from the rent accruing prior to re-entry, the plaintiff could recover only on this covenant, and hence she was entitled to no damages except such as had accrued and were due and payable at the time the action was commenced. She could not even recover any deficiency accruing after the commencement of the action and before the trial thereof, because such damages had not been ascertained as required by the contract at the time the action was commenced, and hence were not then due and payable.
While we do not wish to conclude the parties in advance, we suggest that so far as we can see from the facts now before us, the measure of the plaintiff's recovery in this action is, first, the rent, as such, for the month of December, 1894; second, the deficiency, ascertained in the manner above stated. for each month thereafter until the action was commenced. For any deficiency accruing after that date she must resort to another action since the contract in effect so requires. She is not entitled to any part of the amount paid to fit up the premises as agreed in the lease for the special use of the defendant, because if he had paid his rent as it became due she could have recovered no part of that sum, and his failure to pay rent did not make him liable for something which he had never agreed to pay. She should receive the equivalent of what she would have had if the tenant had paid as he agreed, and no more. The covenant creates and limits the liability of the defendant, and hence the plaintiff cannot recover the expense of making extensive alterations in order to relet the premises to advantage; nor can she deduct the amount paid for this purpose from the gross rents reserved, because the covenant does not so provide, and she can recover only as the covenant permits. While it is possible that she could have leased the premises, subject to reasonable alterations to be made by the tenant, she could not make the alterations herself and deduct the expense from the rents received before crediting them upon the rents reserved, for that would require a special agreement not to be found in the lease before us. She must stand on the covenant as made and cannot ask the courts to add provisions, however reasonable, which she failed to have inserted before the lease was signed.
We do not sustain the theory upon which the majority of the learned judges of the Appellate Division proceeded to judgment, to wit, that an action will lie for the breach of the lease as an entirety and the recovery of all the damages in a single action brought before the expiration of the term. The breach of an agreement to pay money in installments is not a breach of the entire contract and will not permit a recovery of all the damages in advance. ( Wharton Co. v. Winch, 140 N.Y. 287; Moore v. Taylor, 42 Hun, 45.) So far as appears, the failure to pay the rent was the only breach of which the defendant was guilty, for he was under no legal obligation to occupy the demised premises. Even if he refused to recognize the lease as in force, because, as he claimed, the plaintiff failed to make the alterations provided for, this was not a violation of any covenant that he had entered into. His breach consisted simply of a failure to pay money in monthly installments. In Wharton Co. v. Winch ( supra) it was held that where a contract for railroad construction provides for payment in installments as the work progresses, a failure to pay an installment when due is not such a breach of the entire contract as to authorize the contractor to refuse to proceed further and to recover the profits which he would have earned had the contract been fully performed. So if a mortgagor refuses to pay the installments as they fall due upon a mortgage given by him, and even if he refuses to recognize the mortgage as in force for some reason, the mortgagee cannot, in the absence of a special provision permitting it, call the whole mortgage due upon the ground of an entire breach.
There seems to be a distinction, whether well grounded in principle or not, between a contract for the payment of money in future installments and a contract for the delivery of goods in future installments ( Nichols v. Scranton Steel Company, 137 N.Y. 471), as well as a contract for future employment and service. ( Howard v. Daly, 61 N.Y. 362.) We think that the contract before us should be governed in this respect by the principle laid down in Wharton Co. v. Winch ( supra). Aside from this, however, when the parties by their contract provide for the consequences of a breach, lay down a rule to admeasure the damages and agree when they are to be paid, the remedy thus provided must be exclusively followed.
The order of the Appellate Division should be affirmed, and judgment absolute ordered against the defendant upon his stipulation, with costs.
GRAY, O'BRIEN, MARTIN, VANN, CULLEN and WERNER, JJ., concur; PARKER, Ch. J., absent.
Ordered accordingly.