Montdale Holding Corp. v. Kaplan

138 Misc. 23, 244 N.Y.S. 735, 1930 N.Y. Misc. LEXIS 1554
CourtCity of New York Municipal Court
DecidedSeptember 30, 1930
StatusPublished

This text of 138 Misc. 23 (Montdale Holding Corp. v. Kaplan) is published on Counsel Stack Legal Research, covering City of New York Municipal Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Montdale Holding Corp. v. Kaplan, 138 Misc. 23, 244 N.Y.S. 735, 1930 N.Y. Misc. LEXIS 1554 (N.Y. Super. Ct. 1930).

Opinion

Genung, J.

This is an action for rent in the sum of $666.67 for the month of October, 1929, covering a penthouse apartment in the building No. 239 Central Park West, New York city. The defendant interposed a general denial. Subsequently plaintiff made a motion for summary judgment under rule 113 of the Rules of Civil Practice. On the argument of the motion it was agreed by ' both parties to submit the entire case upon an agreed statement of facts, which was duly filed.

The defendant was in possession under a lease executed on March 26, 1927, between a former owner of the property, Paul F. Crosney, Inc., and the defendant, for a period of three years, from October 1, 1927, to September 30, 1930, at an annual rental of $8,000. The defendant paid $16,000, representing the entire rent for the first two years of the lease, in advance at the time of the execution of the lease. The rent for the remaining year of the term was to be paid in equal monthly payments of $666.67.

[25]*25After the execution of the lease and such advance payment of rent an action was commenced on June 22, 1927, in the Supreme Court, New York county, to foreclose a prior existing mortgage on the premises. This defendant was made a party defendant to the foreclosure action. He asserted his equities in that action arising out of the advance payment of rent.

The judgment of foreclosure, while it provided that the defendant’s lease was subject and subordinate to the lien of the mortgage, nevertheless further provided that the foreclosure of all liens subsequent to the mortgage should not be deemed to affect the tenancy of the defendant Kaplan under his lease dated March 26, 1927, for the period of two years commencing October 1, 1927, and ending September 30, 1929.” The conclusions of law in the decision accompanying the judgment of foreclosure and sale also stated'that the lien of the defendant’s lease dated March 26,1927, for a period ending September 30, 1929, shall be saved from the sale of the premises, and that the sale of the premises shall be subject thereto.”

Plaintiff derived its title from the purchaser at the foreclosure sale pursuant to the said judgment. In September, 1929, the defendant vacated the premises at the conclusion of the two-year period for which he had paid rent in advance, and for which he was protected by the judgment in the foreclosure suit. Plaintiff brings this action for the rent of October, 1929, the first month of the third year of the original term of such lease, upon the theory that the said lease is in full force and effect for the remaining year of the original term, and also for the additional term of two years commencing October 1, 1930, because of the exercise by the defendant of an option reserved to him in such lease for such renewal.

The plaintiff’s claim is predicated upon a letter which was written by the defendant to the plaintiff’s agent on February 27, 1929, reading as follows:

This is to notify you of my intention to exercise and I do hereby exercise the option of renewal contained in the lease between Paul F. Crosney, Inc., and Jacob M. Kaplan, dated March 26, 1927, pertaining to the roof apartment which I occupy in the premises at No. 239 Central Park West, New York City. I also hereby notify you that I elect to renew that lease upon the same terms and conditions as are set forth in said lease for an additional period of two years, from October 1, 1930, until September 30, 1932. Kindly acknowledge receipt of this letter and oblige.
“ Yours faithfully.
“ (Signed) J. M. KAPLAN.”

The plaintiff never acknowledged the receipt of this letter or indicated in any way its acquiescence in the proposition outlined [26]*26by the defendant prior to August 29, 1929, when the defendant wrote a letter of withdrawal. It contends, however, that the defendant’s lease was expressly saved from foreclosure for the term of two years by the very provisions of the judgment in foreclosure; that such continued tenure of the defendant after the judgment necessarily carried with it all of the tenant’s rights provided for in the lease; that the option of renewal was one of those rights; that the defendant duly exercised such right by this letter before the expiration of such two years, and that under the authorities the exercise of an option provided for in a lease in favor of a tenant consummates the renewal without any further act or acknowledgment on the part of the landlord. (Orr v. Doubleday, Page & Co., 223 N. Y. 334.)

This court construes the said decision and judgment in the foreclosure action to mean that the court preserved the defendant’s right to remain in possession and enjoyment of his premises under the terms and provisions of his lease as a hen superior to that of the mortgage, but only for the two years ending September 30, 1929, for which he had paid rent in advance, and foreclosed him of all fight, title or interest under the said lease with respect to the balance of the term of such lease. Plaintiff in its briefs has itself construed the decision and judgment in the foreclosure suit as meaning that the lease has not been canceled, but that merely the term of the lease is modified and shortened.

It follows as a consequence and effect of the foreclosure judgment that the provision in the lease for the extension of the original term, by the exercise of the tenant’s option, has been wiped out. Assuming that this option had been exercised before the foreclosure action was commenced, it cannot be doubted- that the extended term under such option would have been foreclosed, together with the remaining portion of the original term beyond the two years that were saved from the operation of the foreclosure judgment. The bare option itself cannot be deemed to have, any greater power of survival after the judgment of foreclosure than an extension previously consummated by the tenant’s exercise thereof. Therefore, the defendant’s letter of February 27, 1929, was in effect an offer not to exercise an existing option to renew, for such option no longer existed, but to revive a right which had been previously ■ extinguished by a judgment of the Supreme Court; or, in effect, an offer to make a new lease for a period of two years, upon the same terms and conditions as in the prior lease.

Such an offer required acceptance on the part of the plaintiff in order to validate it as a contract. The plaintiff failed to accept this offer, and on August 29, 1929, before there had been any [27]*27such acceptance, the defendant wrote to the plaintiff expressly withdrawing his offer to renew or extend the lease, and gave notice that he would vacate the premises at the end of the period for which he was entitled to possession under the terms of the foreclosure judgment. Thereupon the plaintiff replied, on September 13, 1929: “We intend to hold you under the lease. You took advantage of the option given to you in the lease and extended your lease. This was exclusively optional with you, and once you exercised the option you are bound by it.”

This did not constitute acceptance of an existing offer.

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Related

Orr v. . Doubleday, Page Co.
119 N.E. 552 (New York Court of Appeals, 1918)
Austin v. . Ahearne
61 N.Y. 6 (New York Court of Appeals, 1874)
Anderson v. Conner
43 Misc. 384 (Appellate Terms of the Supreme Court of New York, 1904)
Holly Realty Co. v. Wortmann
121 N.Y.S. 572 (City of New York Municipal Court, 1910)

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Bluebook (online)
138 Misc. 23, 244 N.Y.S. 735, 1930 N.Y. Misc. LEXIS 1554, Counsel Stack Legal Research, https://law.counselstack.com/opinion/montdale-holding-corp-v-kaplan-nynyccityct-1930.