Geraci v. Jenrette

41 N.Y. 660
CourtNew York Court of Appeals
DecidedMay 3, 1977
StatusPublished

This text of 41 N.Y. 660 (Geraci v. Jenrette) 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
Geraci v. Jenrette, 41 N.Y. 660 (N.Y. 1977).

Opinion

Wachtler, J.

Plaintiff, the owner of a building in Manhattan, commenced this action for specific performance of a three-year lease. Defendant moved for dismissal of the complaint and summary judgment claiming that the lease is unenforceable under the Statute of Frauds (General Obligations Law, § 5-703, subd 2). It is conceded that the lease is signed only by the plaintiff. The trial court denied the motion stating that a question of fact was presented as to whether the defendant orally accepted its terms. The Appellate Division reversed, granted summary judgment to the defendant and dismissed the complaint without deciding the applicability of the Statute of Frauds. Instead the court held that "[q]uite apart from the Statute of Frauds” it was conclusively demonstrated by the escrow arrangement between the parties that they did not intend to be bound until a formal written contract had been signed and delivered. From that determination plaintiff has now appealed to this court as of right (CPLR 5601, subd [a], par [ii]).

The complaint and the affidavits submitted in opposition to the defendant’s motion allege that in May of 1975 the parties [662]*662began negotiations for a lease of the top four floors of the plaintiffs building. According to the plaintiff, this resulted in full agreement on the terms of the lease, and all that remained were the formalities of a written document. Defendant’s lawyer then drafted a three-year lease with a term beginning on June 1, 1975 and sent a copy to plaintiff and his attorney on May 29. The following day plaintiff and his attorney spoke with defendant’s attorney at his office with regard to certain proposed changes. The defendant was not present but defendant’s attorney contacted him by telephone and discussed the changes. Plaintiff then spoke with the defendant on the phone and, once again, they fully agreed on the terms .of the lease. Plaintiff agreed to return the following day to sign the papers and, although defendant could not attend, it was agreed that defendant’s attorney would hold the lease in escrow until he obtained the defendant’s signature and the first month’s rent.

On May 31 plaintiff signed the lease and left it with defendant’s attorney. However on June 2 the defendant called the plaintiff and told him that he had changed his mind and did not intend to sign the lease.

In a second, separate cause of action plaintiff alleges that both parties partially performed the lease. He says that he removed his office, telephone equipment and furniture from the premises and sold certain antiques in order to clear the area for the defendant’s use. He claims that the defendant "went into possession” by directing his mail to that address and by having various people "upon the said premises” on June 2 "for the purpose of initiating renovations and decorations”.

The defendant denies ever orally agreeing to the terms of the lease. His primary point, however, is that the lease is unenforceable since he never signed it. He relies on subdivision 2 of section 5-703 of the General Obligations Law which states: "A contract for the leasing for a longer period than one year, or for the sale, of any real property, or an interest therein, is void unless the contract or some note or memorandum thereof, expressing the consideration, is in writing, subscribed by the party to be charged, or by his lawful agent thereunto authorized by writing.”

The plaintiff’s position is that subdivision 2 applies only to contracts to enter into a lease. But once a lease is in existence, plaintiff contends that its validity depends on subdivision 1 of [663]*663section 5-703 of the General Obligations Law the relevant portion of which states: "An estate or interest in real property, other than a lease for a term not exceeding one year * * * cannot be created, granted * * * or declared, unless by act or operation of law, or by a deed or conveyance in writing, subscribed by the person creating, granting * * * or declaring the same, or by his lawful agent, thereunto authorized by writing.” The plaintiff readily concedes that a landlord cannot simply sign a lease and unilaterally bind an unwilling tenant to its terms. He claims however that under this subdivision "a lease for a term of more than one (1) year is valid and binding if, after full agreement with the tenant as to all of the terms, it is subscribed by the landlord.” He urges that our decision in 300 West End Ave. Corp. v Warner (250 NY 221) supports this position.

In the West End case the plaintiff landlord sought damages for a breach of an alleged agreement to enter into a lease. The defendant argued that the purported agreement was unenforceable because it involved "a contract for the leasing * * * of any real property” and had not been "subscribed by the lessor or grantor” as was then required by section 259 of the Real Property Law (the predecessor of General Obligations Law, § 5-703, subd 2). The question was whether the lessee could assert the statute as a defense. We held that he could.

During the course of the opinion we indicated that the statute as it then read did not appear to provide adequate safeguards for the lessee. We noted that the original statute, passed in 1787, required the signature of the party to be charged; that it was redrafted in 1828 to require the signature of both parties, but in the revised version finally adopted, only the lessor’s signature was necessary. We could find no explanation for the change, but we proceeded to dispell the notion that the statute should be literally read so as to permit a lessor or vendor to "enforce an oral executory contract against the purchaser merely by writing and subscribing a memorandum of the bargain” (p 227). As we interpreted the statute it was still necessary for the vendor or lessor to prove that there had, in fact, been a meeting of the minds. We stated: "The note or memorandum, although subscribed by the lessor or grantor alone becomes enforceable by him only when the lessee or grantee is shown in some manner to have accepted it as evidence of a valid and operative agreement between the parties” (300 West End Ave. Corp. v Warner, supra, at p 228).

[664]*664The Law Revision Commission felt that even this interpretation did "not afford sufficient protection to the grantee or lessee, where it is sought to enforce the contract against him” (see Law Revision Commission Report, NY Legis Doc, 1944, No. 65, p 75). They recommended that section 259 of the Real Property Law (now General Obligations Law, § 5-703, subd 2) be amended to require the signature of the party to be charged before the agreement would be enforceable, and the Legislature adopted the recommendation (see NY Legis Doc, 1944, No. 65, p 73).

This analysis shows that subdivision 2 (General Obligations Law, § 5-703) does indeed apply to contracts to enter into a lease, as plaintiff maintains. It also shows that upon reconsideration the Legislature rejected the theory suggested in West End, that a "tenant” should be bound to such an agreement when it has been signed only by the lessor—even though there may be evidence that the tenant orally accepted its terms. Now an agreement to enter into a lease is void unless signed by the party against whom it is sought to be enforced.

The question then is whether the Legislature intended a different rule to apply when, as in the case now before us, the landlord seeks to enforce a lease which he alone has signed.

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Related

Wilson v. Le Van
238 N.E.2d 738 (New York Court of Appeals, 1968)
Burns v. . McCormick
135 N.E. 273 (New York Court of Appeals, 1922)
300 West End Avenue Corp. v. Warner
165 N.E. 271 (New York Court of Appeals, 1929)
Dung v. . Parker
52 N.Y. 494 (New York Court of Appeals, 1873)
Wills v. Wills
269 N.E.2d 40 (New York Court of Appeals, 1971)

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Bluebook (online)
41 N.Y. 660, Counsel Stack Legal Research, https://law.counselstack.com/opinion/geraci-v-jenrette-ny-1977.