While a waiver of breach of covenants is a good defense either at law or in equity, it is primarily of equitable cognizance. Equity will not ordinarily exercise its jurisdiction when the defense is pleaded in a common law action, but if that action is of a summary nature where there is no appeal on the merits, it will entertain the defense and stay the action at law. In Lincoln Furniture Co. v. Bornstein, 100 N.J. Eq. 78;135 Atl. Rep. 83, the court said: "The defendant's objection that equity is without jurisdiction because the defense of waiver is available at law is not substantial. * * * That a waiver is an available defense at law is settled law.
This court has inherent jurisdiction in a proper case to relieve against a forfeiture and to restrain proceedings to dispossess a tenant for alleged breach of the terms of his lease, even though there may be a legal defense available in the suit at law. H. Windholz Son v. Burke, 98 N.J. Eq. 471; LincolnFurniture Co. v. Bornstein, 100 N.J. Eq. 78; affirmed, 101 N.J. Eq. 774. The complainant alleges that it purchased all the assets of Paradis Machine Co., including the lease, at a "trustee's" sale for $65,000; that it is engaged in the business of manufacturing textile machinery; that it is well nigh impossible for it to secure another factory due to abnormal scarcity of available buildings and that if it is ejected from the demised premises, its business will be ruined and it will suffer substantial and irreparable loss. It tenders itself ready to pay defendant all rent in arrear.
ere theory that its pursuit of its said right is or may be annoying or harassing to complainant or may even result in his being ultimately dispossessed by warrant of law from said premises, the right to the possession of which he claims but which Tide Water contends were lost to him and vested in it by reason of his breaches and defaults which are set forth in and constitute the basis of its now pending summary proceedings against him. It is now well settled that a court of equity has inherent jurisdiction to relieve against a forfeiture, where equitable rights or equitable defenses are involved. Baldwin v. VanVorst, 10 N.J. Eq. 577; Grigg v. Landis, 21 N.J. Eq. 494;Henwood v. Jarvis and Schafer, 27 N.J. Eq. 247; Fulton v. Greacen, 36 N.J. Eq. 216; Levy v. Blackmore ( N.J.Chancery), 67 Atl. Rep. 1022; Bergman v. Fortescue, 74 N.J. Eq. 266;69 Atl. Rep. 474; Commercial Trust Co. v. L. WertheimCoal and Coke Co., 88 N.J. Eq. 143; 102 Atl. Rep. 448; Blake Co. v. Smidth, 119 Atl. Rep. 306; Lincoln Furniture Co. v. Bornstein, 100 N.J. Eq. 78; 135 Atl. Rep. 83. Where the forfeiture or penalty sought was provided merely as a means of security for the payment of money, then equity regards such payment as the principal intent of the instrument and will usually grant relief against and enjoin said forfeiture upon the payment of the amount due with interest and costs. Based upon this principle, equity has recognized the right of the tenant, in a proper case, to be relieved against a forfeiture for the non-payment of his rent.
Equity has inherent jurisdiction to relieve against forfeiture for conditions broken. H. Windholz Son v. Burke, 98 N.J. Eq. 471; Lincoln Furniture Co. v. Bornstein, 100 N.J. Eq. 78; Sparks v. Lorentowicz, 106 N.J. Eq. 178. These cases were to restrain landlord and tenants dispossess proceedings, but the jurisdiction is none the less when the action is in ejectment. The law courts have concurrent jurisdiction to defeat a waived forfeiture, and if the issue of waiver can be as conveniently tried at law as in equity, and there are no other equities, equity refrains from exercising its jurisdiction.
In Johns v. Winters, supra, it was held that a covenant to renew a lease runs with the land and entitles the lessee-assignee to a renewal, and this, even where the lease by its terms is not assignable except upon consent of lessor, providing the lessor accepts rent from the assignee; and in Feigenspan v. Popowska,supra, it was held that a covenant in a lease giving the lessee the right of renewal is binding on the grantee of the reversion. The jurisdiction of a court of equity to relieve against unjust forfeitures cannot be questioned. Lincoln Furniture Co. v. Bornstein, 100 N.J. Eq. 78; H. Windholz Son v. Burke,98 N.J. Eq. 471; Sparks v. Lorentowicz, supra, and cases there cited. In H. Windholz Son v. Burke, supra, Vice-Chancellor Backes said:
The inherent jurisdiction in courts of equity to relieve against forfeiture, where equitable rights or equitable defenses are involved, has been frequently recognized by our court of chancery, particularly if the suits sought to be restrained is a summary proceeding, instituted but not determined, and without appeal on the merits. H. Windholz Son v. Burke, 98 N.J. Eq. 471;Henwood v. Jarvis and Schafer, 27 N.J. Eq. 247; LincolnFurniture Co. v. Bornstein, 100 N.J. Eq. 78. See, also, Fleming v. Fleming Hotel Co., 69 N.J. Eq. 715; Fulton v. Greacen, 36 N.J. Eq. 216, 222; Bergman v. Fortescue, 74 N.J. Eq. 266,269; Baldwin v. Van Vorst, 10 N.J. Eq. 577, 585;Grigg v. Landis, 21 N.J. Eq. 494, 501; Blake Co. v. Smidth,119 Atl. Rep. 306. The facts in McGann v. La Brecque Co.,91 N.J. Eq. 307, cited contra, were quite different. There the landlord had brought summary proceedings to disposses the tenant after the end of the term; and after judgment of possession had been rendered in favor of the landlord the assistance of the court of chancery was sought to prevent an ouster.
All that the landlord ever had a right to expect under that option was payment in cash for the property and this right is in nowise impaired because it is cash that is now proposed to be paid to him. The case is clearly distinguishable from that of Lincoln Furniture Co. v. Bornstein, 100 N.J. Eq. 78; affirmed,101 N.J. Eq. 774, where it appeared that the landlord had no knowledge of the assignment of the lease to the corporation there in question and the payment of rent by corporate checks was relied upon and held to be insufficient to establish such knowledge. In the present case we think the evidence taken in conjunction with such payment of rent by corporation checks and other circumstances clearly established the fact of such knowledge.
Affidavits submitted by the defendant in support of the application for preliminary injunction include those of two of the city commissioners and one other city official, indicating complete knowledge of violations of the covenant referred to in 1927 and prior, notwithstanding which knowledge the two installments of rent already referred to were accepted by the defendants on the dates mentioned. This fact, under a well-known rule of law, constitutes a waiver of the right of forfeiture of the lease. Levy v. Blackmore, 67 Atl. Rep. 1022; Commercial Trust Co. v. Wertheim Coal Co., 88 N.J. Eq. 143. The jurisdiction of a court of equity to relieve against unjust forfeitures cannot be questioned. 16 R.C.L. § 666; Lincoln Furniture Co. v. Bornstein, 100 N.J. Eq. 78; Pom. Eq. Jur. § 454. In view of this waiver on the part of the defendant it is unnecessary to consider the question of the fact of the violations of the covenant.
Decided October 17th, 1927. On appeal from a decree of the court of chancery advised by Vice-Chancellor Backes, whose opinion is reported in 100 N.J. Eq. 78.Messrs.
Hence, there could be no waiver of the fraud because of an absence of knowledge thereof. Deerhurst Estates v. Meadow Homes, Inc., supra; West Jersey Title and Guaranty Co. v. Industrial Trust Co., 27 N.J. 144 (1958); Lincoln Furniture Co. v. Bornstein, 100 N.J. Eq. 78 ( Ch. 1926), affirmed 101 N.J. Eq. 774 ( E. A. 1927). If plaintiff's manager did learn on December 29, 1959 that defendant had misrepresented her marital status on November 23, 1959, the short extension of time within which to make the first payment was not such "a voluntary, clear and decisive act, implying an election to forego" the fraud as to constitute a waiver thereof.