Summary
noting that "[t]he lessees' personal covenant to pay the rent applied to the extended term [of the lease]"
Summary of this case from J.G.M.C.J. v. Sears, Roebuck CompanyOpinion
Decided June 2, 1936.
A covenant in a lease "to give to said lessee the option to extend" the lease for a further term with no change of rental is an option for the extension of the lease and not for a renewal. The lessee in such lease who has covenanted "to pay the rent as above stated . . . during the term, and also the rent . . . as above stated, for such further time as the lessee may hold the same" remains liable for the rent accruing after an assignment of the lease notwithstanding the lessor has accepted rent from the assignee. If the lessee makes an assignment, the assignee is not entitled to exercise the option where the lessee has waived all right to exercise it, and refused to remain liable for the rent under the extension, since the lessee's covenant to pay the rent applied to the extended term and the lessor cannot be bound to accept an exercise of the option which varies its conditions.
PETITION, for a declaratory judgment.
The defendant executed a lease of premises in Rochester for a term of years at a prescribed rental. The lease contained its covenant "to give to said lessee the option to extend" the lease for a further term with no change of rental. There was a covenant of the lessees in the instrument "to pay the rent as above stated. . . during the term, and also the rent . . . as above stated, for such further time as the lessee may hold the same". The lessees also covenanted not to assign the lease without the lessor's written assent.
Before the term expired the lease was assigned to the plaintiff. The defendant did not give written assent to the assignment, but accepted rent from the plaintiff for the balance of the term. Subsequent to the assignment one of the lessees notified the defendant of it, with an accompanying statement that he waived all of his rights to exercise the options in the lease and that he should "assume no liability whatsoever in the event said options are exercised by the assignees of said lease with respect to the extended term". Subsequently the plaintiff notified the defendant of its decision to exercise the option.
The court (Sawyer, C. J.) transferred without ruling the question whether the option was validly exercised.
Herbert W. Rainie and David N. Borkum (of Massachusetts) (Mr. Rainie orally), for the plaintiff.
Conrad E. Snow (by brief and orally), for the defendant.
If it were assumed that the assignee became the lessor's tenant by the latter's acceptance of rent from it, yet the lessees remained liable for the rent accruing after the assignment, by reason of their personal covenant in the lease to pay the rent for the full term. La Societe c v. Owen, 79 N.H. 318, and cases cited; Novak v. Company, 84 N.H. 93, 96. The option in the lease for a longer term was for its extension, and not for a renewal. Its language is definite in this respect. Any claim that the option was for a renewal may not be sustained without disregard of the plain wording of the lease. See Underhill, Landlord Tenant, s. 803.
The lessees' personal covenant to pay the rent applied to the extended term. The option provided that if it were exercised they would pay the rent, and their covenant to pay rent "during the term" applied to the full term under the extension. All the provisions of the lease were to be continued in any extension as though there were but a single term of years covering the entire period from the time the lease commenced.
When one of the lessees refused to be liable for the rent if the option were exercised, it could not be exercised according to its conditions. The lessor was under no obligation to accept an exercise of the option varying or excepting its conditions. The lessee's refusal was an act at odds with the conditions of the option, and effectually prevented its valid exercise. The attempt to exercise it without adherence to its requirements created no rights against the defendant. It does not appear that the defendant has waived any of the requirements.
Case discharged.