Opinion
Argued May 9, 1900
Decided June 12, 1900 Motion for reargument submitted October 1, 1900 Denied October 23, 1900
Nelson S. Spencer for appellants. William Mitchell for respondents.
That the learned Appellate Division was not justified in reversing the judgment of the trial court without awarding the defendants a new trial upon all the issues in the action is thoroughly established by the decisions of this court. ( Moffet v. Sackett, 18 N.Y. 522; Cuff v. Dorland, 57 N.Y. 560; Whitehead v. Kennedy, 69 N.Y. 462; Andrews v. Tyng, 94 N.Y. 16; Lawrence v. Church, 128 N.Y. 324; Porter v. Dunn, 131 N.Y. 314; Altman v. Hofeller, 152 N.Y. 498; Heller v. Cohen, 154 N.Y. 299; Benedict v. Arnoux, 154 N.Y. 715, 724; Snyder v. Seaman, 157 N.Y. 449; New v. Village of New Rochelle, 158 N.Y. 41; Matter of Chapman, 162 N.Y. 456, 459.)
Instead of granting a new trial, to which the defendants were clearly entitled, that court made an order appointing a referee to take certain proof and report it to the Special Term, and then directed that a final judgment should be entered thereon. Without examining in further detail the practice adopted in this case, it is sufficient to say that it was wholly unauthorized and irregular, and must be set aside. We have so often and so recently discussed the absence of authority in the Appellate Division to grant similar orders or judgments, that any further discussion of the subject would be a work of supererogation.
There is, however, a more serious impediment to the affirmance of either of the judgments of the Appellate Division, arising from the fact that the first judgment of the Special Term was reversed upon questions of law only. The order of reversal contains no statement that the judgment was reversed upon the facts, and, hence, under the mandate of section 1338 of the Code of Civil Procedure, it must be presumed to have been reversed upon questions of law. ( People v. Adirondack R'way Co., 160 N.Y. 225; Bomeisler v. Forster, 154 N.Y. 229; Petrie v. Trustees of Hamilton College, 158 N.Y. 458; Gannon v. McGuire, 160 N.Y. 476; Lannon v. Lynch, 160 N.Y. 483; Schryer v. Fenton, 162 N.Y. 444; Spellman v. Looschen, 162 N.Y. 268.)
The trial court was plainly of the opinion that the proof disclosed such a lack of diligence or effort upon the part of the plaintiffs to procure a valuation of the premises and building in the manner prescribed by the lease as to prevent them from maintaining this action, and for that reason dismissed the complaint. It is equally manifest that the learned Appellate Division was of the opinion that, upon the facts, the complaint should not have been dismissed, and upon that ground reversed the judgment. An examination of the evidence taken upon the first trial renders it obvious that there was sufficient testimony to justify the Special Term in finding that the plaintiffs were guilty of such inaction and negligence upon their part as to prevent the proper maintenance of this action. The plaintiffs were not entitled to the relief sought, unless the defendants were guilty of some improper act or omission to proceed with the arbitration, or to agree upon the value of the property in the manner provided by the lease, especially if there was such neglect upon the part of the plaintiffs as is indicated by the evidence and determination of the Special Term. It was the duty of each party to act in good faith to accomplish the appraisement in the manner specified. ( Livingston v. Sage, 95 N.Y. 289; Hood v. Hartshorn, 100 Mass. 117; Kelso v. Kelly, 1 Daly, 419; Uhrig v. Williamsburgh City F. Ins. Co., 101 N.Y. 362.)
While it may be that as the Appellate Division had the right to review the first judgment, both as to the law and facts, it might have properly reversed it upon the facts, still, not having done so, its judgment of reversal cannot be sustained, unless the decision of the Special Term was without any evidence to support it, and, hence, a reversal upon the law was justified. An examination of the record renders it manifest that it could not be properly held, as a matter of law, that the Special Term was not authorized by the proof before it to dismiss the complaint upon the ground stated. Therefore, the learned Appellate Division erred in reversing the first judgment upon the law, and its judgment must be reversed and the judgment of the Special Term affirmed, unless this court acts upon the consent or stipulation of the defendants' attorney, made upon the argument.
The attorney for the appellants, during the argument, consented that if this court should be of the opinion that the principle adopted in appraising the value of their building was correct, the judgment might be so modified in other particulars as to conform to the law and proper practice, and as thus modified might be affirmed. We have carefully examined that branch of the case which relates to the appraisal and valuation of the interests of the parties in the premises, and are of the opinion that the appraisals were correct both as to the value of the land and as to the value of the building thereon.
But the judgment of the court below is erroneous in other respects, and must be reversed and the first judgment of the Special Term affirmed, unless the respondents shall stipulate to modify the judgment of the Appellate Division in the particulars pointed out. The court below erroneously charged the appellants eighty-three hundred dollars a year from March 1, 1895, to March 1, 1897, for the use and occupation of the premises, when the annual rent reserved in the lease was only one thousand dollars. In this connection it is to be observed that by the terms of the lease the defendants would not have been justified in surrendering or required to surrender possession until the plaintiffs elected either to renew the lease upon terms agreed upon or adjusted, or to purchase the building at a price agreed upon or settled in the manner specified. Such is the plain reading of the lease, and such was the clear intention of the parties making it. Therefore, it is obvious that the defendants could not properly surrender possession until the value of the lot and building was agreed upon or thus determined, nor until the plaintiffs made their election. The plaintiffs at no time indicated any willingness to accept the possession or in any way consented to a surrender thereof by the defendants. We think the continuance of the defendants in possession of the premises must be regarded as under the lease until such time as the plaintiffs actually made their election, which was not until after the second judgment was rendered. Where a lease for a term of years contains a covenant on the part of the lessor that at the expiration of the term the lessee shall be paid the appraised value of the building, or a new lease at an appraised rent shall be granted, the lessee at the expiration of the term is entitled to retain the possession until the covenant shall be performed by the lessor. This binds both the lessor and lessee. The lessee is not, however, discharged from the payment of the rent, but in an action for use and occupation the lessor can recover no more than the rent originally reserved. ( Holsman v. Abrams, 2 Duer, 435; Ryder v. Jenny, 2 Robertson, 56; Paine v. Rector, etc., 7 Hun, 91; Van Rensselaer v. Penniman, 6 Wend. 569.)
Instead of being charged $8,300 a year the defendants should have been required to pay only the annual rent of one thousand dollars reserved by the lease. Therefore, the judgment should be modified by deducting from the amount allowed to the plaintiffs for the use of the premises the sum of $15,627.41, the interest thereon amounting to $161.58, and the costs and disbursements allowed against the plaintiffs amounting to $616.15, making a total of $16,405.14 which should be deducted from the amount credited to the plaintiffs; that the defendants should be allowed for the value of their building $15,100, but the amount credited to them for taxes should be disallowed, and the rent for the two years the premises were occupied by them should be deducted from the value of the building, leaving their due therefor, after deducting the rent, the sum of $13,100.
It follows that the judgment of the Appellate Division reversing the first judgment of the Special Term should be reversed, the subsequent proceedings and judgment set aside, and the said judgment of the Special Term affirmed, with costs to the defendants of all the proceedings in all the courts, unless the plaintiffs stipulate to modify the judgment appealed from so as to direct that the plaintiffs pay to the defendants $13,100, with interest thereon from March 1, 1897, with costs to the defendants in all the courts. If they shall so stipulate, then the judgment appealed from should be modified in accordance with such stipulation and, as so modified, affirmed.
PARKER, Ch. J., GRAY, BARTLETT, VANN, CULLEN and WERNER, JJ., concur.
Judgment accordingly.