Phyfe v. Wardell & Woolley, 5 Paige Ch. 268

Phyfe v. Wardell & Woolley

5 Paige Ch. 268 | New York Court of Chancery | 1835

The Chancellor.

Although, as between landlord and tenant, the complainant had no legal or equitable right to a ■renewal, as it depended upon the mere volition of his landlord, yet, in regard to third persons, he had an interest which a court of equity recognizes as a valuable and vendible interest. The rule on this subject is, that if a person who has a particular or special interest in a lease, obtains a renewal thereof from the circumstance of his being in possession as tenant, or from having such particular interest, the renewed lease is, in equity, considered as a mere continuance of the original lease, subject to the additional charges upon the renewal, for the purpose of protecting the equitable rights of all parties who had any interest either legal or equitable, in the old lease. This is particularly so in the case of church leases, leases from trustees of charities, or from other persons where there is but a slight probability of the renewal being refused, if the tenant consents to pay the renewal fine, or the increased rent which the landlord may think proper to require. The first case on this subject is Holt v. Holt, (1 Cases in Ch. 190,) where the executor, having given security for the payment of •the legacies, took the leasehold estate to himself. He after-*280wards obtained a renewal of the lease upon the payment, of a fine, and built houses upon the premises, as his own; and Lord Keeper Bridgeman, assisted by Justices Twisden and ■yypde, and Barons Rayuesford and Wyndham, decreed that the legatees should have the renewed lease as part of the estate of the testator; they paying the fine upon the renewal, and the charges of the improvements. The decision in that case was not founded upon any breach of trust on the part of the executor, for he had every reason to suppose himself entitled beneficially to the leasehold premises. The other property, upon which the legacies xvere also chargeable, was ample at the time; but a part xvas destroyed by the fire of London, and the residue being held by a title derived under the commonwealth, was lost by the restoration of Charles 2d. So in the case of Palmer v. Young, (1 Vern. Rep. 276,) which came before Lord Guilford fourteen years afterwards, where a church lease had been granted to three persons, and one of them afterwards obtained a renewal in his own name, it was decreed that he should hold it in trust for the benefit of all. These decisions were followed by Lord King, in Keech v. Sandford, (Sel. Ca. in Ch. 61,) about forty years afterwards ; and in Witter v. Witter, in 1730, (3 P. Wms. 99.) In the first case a lease of the profits of the Rumford Market was devised to a trustee for the benefit of an infant. The term being about to expire, the trustee applied to the lessor for a renewal, for the benefit of his cestui que trust. But the trustee refused to renew, on the ground that, from the nature of the property, he could have no remedy by distress; and the infant being incapable of securing the rent by covenant. The trustee thereupon took a lease to himself And, upon a bill filed by the infant, for an assignment of the new lease, and for an account of the profits, although there xvas clear proof of the refusal to renew for the benefit of the infant, it xvas decreed that the lease should be assigned to the infant, that the trustee should be indemnified against the covenants contained in the lease, and should account for the rents and profits subsequent to the renexval. In the last case, the executor, xvho held a lease in trust for an infant, for a term of years determinable on lives, being unable to obtain a renexval for a term, took a *281new lease in trust, for lives absolutely; which was a descendible interest, and would not, at law, go to the personal representative. And the infant having died under age, but after he was old enough to have disposed of his interest, by will, if the change in the lease had not been made, it was decreed that his interest in the renewed lease, coming in the place of the original lease, should be distributed as personal estate. The cases of Mason v. Day, (Prec. in Ch. 319,) and Pierson v. Shore, (1 Atk. Rep. 480,) although they apparently conSict with the other decisions, do not conflict with them in point of fact. The rule is, not that the renewed lease is to be considered as a continuationof the old lease for every purpose, but only so far as concerns the legal and equitable rights of those who had an interest in the old lease. And the two last mentioned cases only decided that the heirs at law who had no interest in the original lease, must take according to the new lease. In the recent report of the case of Pierson v. Shore, taken from the note book of Lord Hardwieke, (1 West’s Rep. 711,) the distinction between that case and the case of Witter v. Witter is fully explained. The Lord Chancellor says: “ The true reasons why the guardians of an infant cannot convert his personal property into real, is because the infant would thereby be deprived of the power of disposing of it so soon, and not out of any regard to the real or personal representative.” And he expressly recognizes the principle, that, so far as regards those who had an interest in the old lease, the renewed lease is considered a mere continuation thereof, and subject to the same uses. The last case I shall refer to on this subject is Rawe v. Chichester, (2 Ambl. Rep. 715,) before Lord Apsley, in 1773. In that case, the testator having certain leasehold estates for years, in the name of a trustee, bequeathed them to his wife for so many years of the term as she might live, and after her death, if the terms were still in being, then to his brother for life, with remainder to his children. The widow survived the original term; but having obtained a renewal for an additional term, it was decreed that the renewal was for the benefit of the estate of the testator, and that the remainder-men wrere entitled thereto. In *282that case Lord Apsley says, it. may be laid down as a rule,, that whoever has a lease, has an interest in its renewal, and5 it is often the subject of settlements and of the jurisdiction of this court. Though the lessors are not bound to renew, yet when done, it is a continuance of the old lease. If trustees, mortgagees and persons interested, obtain a renewal, the new lease is-always subject to the trusts and limitations of the old’ lease. These cases being, all before the revolution, and settling the law on this subject so conclusively, it will be needless to show that the same principle is adhered to in the more recent adjudications in the English court of chancery.

The case under consideration comes directly within the' principle established by these decisions. The defendants, therefore, must take their renewed lease as a continuation of the-old one, which expired a few days after their contract of purchase; and subject also to the sub-lease to Dickey, the under tenant, of which they were informed at the-time-of their purchase.. And having taken an unconscientious advantage-of their legal title, to deprive the lessee of the complainant of the possession to which he was equitably entitled under the-lease for a year, they are bound to make good any loss the-complainant may sustain thereby. In this view of the case it is not material to consider whether the neglect to insert, a particular covenant in the- written agreement, as to Dickey’s-rights, through the fraud of the defendants, would of itself have-constituted a sufficient ground for equitable relief. .Although the new lease was taken in the names of the defendants, yet, according to the principles above stated, it must be considered,, for the purpose of protecting the rights of all parties, as if the renewed lease had been taken in the name of the complainant, and as a continuation of the original lease; which original lease the defendants had contracted to purchase with a full knowledge that a part of the premises were underlet to Decker. This would have given the defendants the right to the possession of the rents and profits of that part of the premises, as the landlords of Decker, upon payment of the purchase money, and to the actual possession of the residue of the-premises; which, upon the facts stated, must be considered the fair construction of the written agreement,

*283The vendor has a right to come into this court to compel ■the specific performance of a contract of sale against the vendee, although he may have another remedy by action at law for the purchase money; as was recently decided by this court, in the case of Brown v. Haff & Lyan, not yet reported.(a) In the present case, however, there are other grounds on which the jurisdiction of the court may be sustained. And it is perhaps doubtful whether an action at law could be sustained upon the written agreement, as the original term expired before the time appointed for the performance of the ■contract. And the principle of considering the renewed lease as a continuance of the old one, being one which is peculiar to the courts of equity, it was necessary, at all events, for .the complainant to come into this court to enable him to enforce his equitable lien for the unpaid purchase money, against ■the legal interests whiclr the defendants have obtained in the premises under the new lease. The decision of the vice ..chancellor, in overruling the demurrer, was therefore correct , and must bs affirmed, with costs.

Ante, p. 235.