146 F.2d 592 | 2d Cir. | 1944
This appeal questions the correctness of the District Court’s ruling that a landlord validly exercised an option to terminate the tenant’s lease. The debtor, which operates a chain of restaurants, in 1931 leased from the appellee’s predecessor in title the land and building located at 1551 Broadway. The lease was to run for a term ending May 1, 1947, and carried an annual net rental of $49,000.
It is conceded that the appointment of' a trustee of the debtor’s property and the nonvacation of such appointment within thirty days gave the lessor the power to end the lease if he exercised such' p"ower within a reasonable time. The appellant
The special master and the District Court were of opinion that the lessor exercised its option within a reasonable 'time in view of negotiations carried on between the parties for the making of a new lease on mutually satisfactory terms. We agree. In Model Dairy Co. v. FoltisFischer, Inc., 67 F.2d 704, 706, we said that mere delay in the exercise of the lessor’s power to terminate was not a persuasive consideration without a showing that he had abandoned it or that the lessee to his detriment had relied upon the landlord’s delay; and a delay of six months was held not unreasonable. In Shear v. Healy, 208 App.Div. 269, 203 N.Y.S. 387, a delay of three years was held not fatal. Since there is no evidence whatever that the lessor intended to abandon its power to cancel, we pass to a consideration of the alleged estoppel.
Negotiations between Mr. 'Joseph Lorenz, attorney for the trustee, and Messrs. Lowell Birrell and Herbert Birrell, attorneys for the landlord, began on December 6, 1943. Mr. Lowell Birrell suggested a lease on the old terms as modified by the 1941 agreement; Mr. Lorenz replied that the rental was too high.
We see nothing in these facts to create an estoppel against the lessor. The appellant claims that Mr. Herbert Birrell’s statement that the desirability of a lease with rental based on earnings would depend on the debtor’s new management and there was no need for hurry lulled the trustee into inactivity and caused him to do nothing further in connection with the premises. But all he could have done was to negotiate with the lessor for a new lease. There is nothing to indicate that if such negotiations had been diligently prosecuted by the trustee between February 7th and March 23rd, they would have resulted in an agreement between the parties. The lessor’s willingness in December to have the trustee “assume” the modified lease is no proof that he would have agreed to it in February, when offers from other prospective tenants were under consideration. Nor was there anything unfair in the lessor’s failure to inform the trustee of such offers; the trustee was aware that rental values were rising and had no reason to suppose that the landlord would deal only with him. As we see it, each side was haggling to get the best terms possible from the other without disclosing the terms which would be satisfactory to it. The maximum inference to be drawn from the remarks of the lessor’s attorneys is that the lessor was in no hurry to come to a decision; and even if it was a mis
The order is affirmed.
In 1941 the parties by agreement modified the amount of the annual rental but it is unnecessary to specify the terms of the modification.
Although the parties spoke in terms of “assuming” the lease as modified, what was meant was the making of a new lease at the same rental.