Rutgers v. Hunter

The Chancellor.

By the lease of 1799, the plaintiff had his election either to pay for the buildings and improvements at the valuation, or renew the lease, or redemise the lot, at such rent, and upon such terms, as the parties might agree on.

He elected to renew the lease ; and, on the day of the expiration of the lease, he tendered another lease for the lot, for the same term and rent as in the former lease; but the defendant refused to accept that or any other lease, or agree to any terms of another lease, and insisted on being paid the value of his improvements, under the covenant in the first lease.

It is contended, on the part of the defendant, that the covenant to redemise on such terms, and at such rent as the parties might agree on, is void for uncertainty. To redemise the lot at such rent, and upon such terms as might be agreed on, is, indeed, quite analogous to a covenant to let the lot for a yearly rent, to be fixed by men to be mutually chosen, and which was held, in Abeel v. Radcliff, (13 Johns. Rep. 297.) to be void for uncertainty, as no term was fixed. But here was, also, the alternative to “ renew the said lease.” That implied the same term and rent, and such a lease was tendered on the day of the termination of the first lease. The covenants in the first lease, relative to the buildings, were no necessary part of it; and it would be absurd to suppose, that an agreement to renew a lease, did necessarily imply a lease, not only of the same term and renalso, with all the covenants in the other, anil which are the accidental and not the essential parts of a lease. In the first lease, there was a covenant on the part *219 of the lessee, to build a good brick dwelling house within two years. This was a covenant that had no necessary, and could not have any reasonable connexion, with the renewal of the lease; and the same observation will apply to the covenant on the part of the lessor, to pay, at the expiration of the lease, the value of such house, and of other buildings and improvements to be made, built, and erected on the lot, or to renew the lease. If a covenant to renew the lease, necessarily included a renewal of all the covenants in it, it would,, be tantamount to a covenant for perpetual renewal, and so extraordinary a covenant ought.not to depend on inference merely. An agreement to make leases with covenant foi; perpetual renewal, each lease to contain the same covenant for ever, was a species of contract which Lord Thurlow thought ought not to be executed. But Lord Eldon (16 Vesey, 84.) disagreed to that doctrine, on the ground, that such contracts had been too long covered and sanctioned by decisions. I do not mean to say, that such covenants are not valid j but I contend, only, that they must be clearly and certainly made, and are not to be deduced by construction from a covenant to “ renew the lease,” without saying more.

I am, accordingly, of opinion, that the defendant has no right to pursue his action at law on the covenant to pay the valuation, and that he must waive the benefit of that valuation, since the plaintiff has elected to renew the lease, and has actually tendered a renewal of the lease. He must accept of the lease tendered, or agree with the plaintiff to another lease upon other terms and rent; and if he will not do either, he must be content to lose his improvements, for the plaintiff reserved to himself the right, (and the defendant was a party to that reservation,) to pay the value, or renew the lease, or redemise the lot on terms to be agreed on. I am not certain, that if the lease had only provided for a redemise of the lot upon terms to be agreed upon, or to pay the valuation, that the defendant could have obsti *220 nately refused any terms. Possibly, it might be considered like the case mentioned by Sir Sanmel Romilly, (9 Vesey, 60 5.) of an agreement to sell at the valuation of another person; and if the party refuses to name a value, the Court refers it to a master. The Court might not be inclined to enforce, specifically, such an agreement, and yet not permit a party to refuse all terms, and avail himself purposely of the covenant to pay the value. This would destroy, altogether, the alternative reserved by the lease, and the party might be considered bound to accept of reasonable terms. However, I am not required, nor am I ready to give any opinion on such a case as this would be, in the absence of the other alternative, to renew the said lease. Lord Loughborough, in Mosely v. Virgin, (3 Vesey, 184.) considered a covenant to repair and a covenant to build, without saying what building, as too loose and undefined to be the subject of a reference to a master, and upon which the jurisdiction of the Court, as to the specific performance of contracts, can apply. Bui the question, in such a case, would be, not that the agreement was to be specifically enforced, but whether a party should be permitted to recover his improvements at law, when he, in fraud of the agreement, refused to accede to another lease upon any terms, however just and moderate.

The following decree was entered:—

“ It is declared and adjudged, that the plaintiff, by the provisions of his lease to the defendant, was entitled to elect either to pay for the buildings, and other improvements on the lot, in the pleadings mentioned, according to the valuation thereof, or to renew the lease, or to redemise the lot, at such rent and upon such terms as the parties might agree on. And it is further declared and adjudged, that the defendant refused to accept of a redemise of the lot upon any terms; and that the plaintiff elected to renew the former lease, and did on the day of the expiration of *221 the former lease, tender a renewal of it for the same term, and upon the same rent, and the defendant was hound either to accept of the same, or give up his claim for the value of his improvements. And it is further declared and adjudged, that the lease so tendered was a renewal of the former lease, within the meaning of the covenant, and that it was not necessary to insert therein the covenants of either party, contained in the former lease, respecting the building a house, and the paying for that and other improvements, inasmuch as such covenants are the accidental and not essential parts of a lease, and had no just or reasonable application to the renewal of the former lease. It is, thereupon, ordered, &c.,. that the defendant, within forty days after service of a copy of this decree on ,him, or on his solicitor, may signify in writing to the plaintiff, or to his solicitor, his acceptance of the lease so tendered, and the plaintiff shall, thereupon, cause the lease so tendered, or another of the same import and effect, duly executed, to be delivered to the defendant, or to his solicitor, for his use. And it is further ordered, &c., that in case of such acceptance by the defendant, of such renewed lease, he duly account before a master to the plaintiff for the arrears of rent of the said lot, up to the first day of August, instant; and, on such accounting, that he be credited for whatever rent the plaintiff may have received from any other person, for the use and occupation of the said lot, since the defendant ceased to occupy the same, after deducting all reasonable expenditures, made in the intermediate time, for reparations, assessments, or taxes thereon ; and that, on the report of the master being made and confirmed, that the defendant pay such balance of rent to the plaintiff, together with his costs of this suit, to be taxed, and that the plaintiff have execution therefor, according to the course and practice of the Court. And it is further ordered, 8ic., that if the defendant shall not, within the time aforesaid, signify, as aforesaid, his accept *222 anee of such renewed lease, that, thereupon, the plaintiff shall be at liberty to use, lease, sell, or otherwise dispose of the lot, free and discharged of the covenants by him in the . former iease t0 (he defendant. And it is further ordered, &c., that the defendant, be, and he is hereby perpetually enjoined from prosecuting hjs said suit at law, in the bill mentioned, against the plaintiff, or any other suit at law, upon the covenant in the . said lease, to pay the amount of the valuation of the said improvements, and that the injunction, heretofore issued, be, and is hereby declared to he perpetual.”