Commission on Ecumenical Mission & Relations of the United Presbyterian Church v. Roger Gray, Ltd.

267 N.E.2d 467, 27 N.Y.2d 457, 318 N.Y.S.2d 726, 1971 N.Y. LEXIS 1599
CourtNew York Court of Appeals
DecidedJanuary 14, 1971
StatusPublished
Cited by19 cases

This text of 267 N.E.2d 467 (Commission on Ecumenical Mission & Relations of the United Presbyterian Church v. Roger Gray, Ltd.) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commission on Ecumenical Mission & Relations of the United Presbyterian Church v. Roger Gray, Ltd., 267 N.E.2d 467, 27 N.Y.2d 457, 318 N.Y.S.2d 726, 1971 N.Y. LEXIS 1599 (N.Y. 1971).

Opinions

[460]*460Breitel, J.

The issue is whether the managing agent ” of plaintiff landlord’s predecessor in interest, who purportedly executed a store lease extension agreement by informal letter, was an agent for purposes of subdivision 2 of section 5-703 of the General Obligations Law; and, if so, whether the evidence of his authority to execute the extension agreement satisfies the statute.

Vartan Jinishian, now deceased, had been president and sole stockholder of Madison Avenue Realty Corporation, owner of commercial property at 554 Madison Avenue, its sole asset. Harry Aprahamian was the managing agent of the building from 1948 to 1968. During this period he collected the rents, negotiated leases and the extensions of leases, arranged for bids and contracts with respect to painting, plumbing, and electrical work on the premises. In June, 1964 Jinishian, by letter, extended Aprahamian’s employment at the same monthly salary as managing agent for the corporation’s building for a period of six years to be measured from Jinishian’s death. By letter, bearing the date of February 14, 1966, Aprahamian purported to extend the lease of defendant Roger Gray, Ltd., a tenant, for a period of three years from January 31, 1971 until January 31, 1974. The letter was signed “ Madison Avenue Realty Corporation By Harry Aprahamian, Manager ’ ’. On May 17, 1966, plaintiff landlord acquired all the outstanding shares of Madison by gift from Jinishian. On November 30, 1967, fee title was deeded by the former landlord Madison to the present landlord, plaintiff.

The date of the purported extension is significant; it is February 14, 1966. This is just short of five years before the tenant’s lease was to expire by its terms. And it is just short of three months before the entire corporate stock of the former landlord was transferred to the present landlord as a charitable gift..

The landlord’s treasurer, Pattison, first learned of the alleged lease extension to Roger Gray in August, 1966. In January, 1969 plaintiff landlord entered into an agreement for the sale of 554 Madison Avenue subject to, among other things, the Roger Gray lease expiring on January 31, 1971. Upon learning of the prospective sale, the tenant, Roger Gray, informed the landlord of the written extension. The landlord then brought [461]*461this action for a judgment declaring that the purported lease extension was invalid. Special Term granted the landlord’s motion for summary judgment, holding the extension letter to be without legal effect.

The Appellate Division reversed, one Justice dissenting. It premised reversal on alternative theories: First, whether the corporation was a signatory to the extension agreement is determined by general corporate law- and is not affected by the General Obligations Law; and,'second, assuming Aprahamian to be an agent for purposes of the General Obligations Law, the written authorization need not be specific and referable to the particular lease.

The order of the Appellate Division should be reversed, and Special Term’s determination granting plaintiff landlord summary judgment should be reinstated.

The statute reads in relevant part that a lease for a period longer than a year must be in writing and subscribed by the party to be charged, or by his lawful agent thereunto authorized by writing ” (General Obligations Law, § 5-703, subd. 2). The mandate that the authority of the putative agent be in writing is not peculiar to New York but is found in the Statute of Frauds provisions of more than a dozen States (1944 Report of N. Y. Law Rev. Comm., pp. 91-102; 2 Williston, Contracts [3d ed.], § 276; Ann., Statute of Frauds — Agent’s Authority, 27 A. L. R. 606).

Defendant tenant urges this court to adopt an interpretation of the statute which is not only strained but also without precedential support. It argues that the statute does not apply when the putative agent is also an employee of the corporation. Because a corporation must perforce act through individuals, it contends that if the instrument is executed by an officer or employee on behalf of the corporation, the act of execution is not that of an agent but the act of the corporation itself. The court then, it says, need not reach the question of agency and the requisite written authorization required by the Statute of Frauds.

This reasoning is unsound.

In the first place, an issue under a Statute of Frauds, such as section 5-703, may not be resolved by reference to rules of agency affecting corporations. If it were otherwise, then the [462]*462Statute of Frauds would be largely obviated as to corporations and to that extent rendered a virtual nullity. None of the cases in this State or elsewhere have ever taken such a view. The tenant cites none. Indeed, the reasoning urged by the tenant has been expressly rejected as untenable in other jurisdictions (see, e.g., Stammelman v. Interstate Co., 111 N. J. L. 122, 124-126; Lindhorst v. St. Louis Protestant Orphan Asylum, 231 Mo. 37-9, 392, involving “ a general agent for the West ”; see, generally, 19 Am. Jur. 2d, Corporations, § 1168). Moreover, the essential premise underlying that reasoning begs the question. The nub of the issue is whether the Statute of Frauds requires that an employee acting as an agent be authorized in writing before he may execute certain kinds of instruments. For that issue it must be assumed that a party can supply parol proof that the actor was both an employee and an agent, and possessed with purported authority. Of course, if by the extraneous proof the purported agent’s act was not authorized, or he was not an agent, that is the end of the matter and there is no need to have recourse to the Statute of Frauds. Consequently, the issue tendered on this appeal is, assuming that the purported agent was indeed the agent authorized by parol evidence, does his act of extending the lease fail for lack of compliance with the Statute of Frauds as to his own authorization (56 N. Y. Jur., Statute of Frauds, § 125, and cases cited at n. 3).

The second problem is whether an employee who is also an agent, or better, an agent who is also an employee, falls within subdivision 2 of section 5-703. Although it has been often stated that a corporate officer or director is not an “ agent” within the meaning of the Statute of Frauds requiring written authorization, the rule has not been applied to employees or agents who are not officers or directors (Ann., Agent’s Authority—Writing, 1 A. L. R. 1132; 2 Williston, op. cit., supra, § 276, at p. 203 ; 37 C. J. S., Statute of Frauds, § 207). On the contrary, the authorities relied on by the parties expressly limit the exception to directors and officers (Klores v. Empire Tit. & Guar. Co., 64 N. Y. S. 2d 477 [Sup. Ct., Nassau County]; Hasenfratz v. Berger Apts., 61 N. Y. S. 2d 12 [Sup. Ct., Kings County]; Jeppi v. Brockman Holding Co., 34 Cal. 2d 11; McCartney v. Clover Val. Land & Stock Co., 232 F. 697, Ann. 1 A. L. R. 1132; see, also, Clement v. Young-McShea Amusement Co., 70 N. J. [463]*463Eq. 677, holding that even officers and directors must be authorized in writing). A case of marked interest, involving an “Assistant General Land Agent” for a railroad who lacked any written authorization to execute a contract for the sale of land, arose in Pennsylvania. In Rosenblum v. New York Cent. R. R. Co. (162 Pa. Super.

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267 N.E.2d 467, 27 N.Y.2d 457, 318 N.Y.S.2d 726, 1971 N.Y. LEXIS 1599, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commission-on-ecumenical-mission-relations-of-the-united-presbyterian-ny-1971.