Van Schaick v. Third Avenue Railroad

25 How. Pr. 446

• Court: New York Supreme Court
• Decided: March 15, 1862
• Status: Published

Opinions

By the court, Leonard, Justice.

The liability of the defendants for rent ceased, at law, when they assigned the lease and terminated their occupation. Nor can the defendants be held for the rent, in equity, as cestui que trusts. (Walters agt. The Northern Coal M. Co., 5 De Gex., M. & G., 640 to 642.)

Had there been any previous agreement between the landlord and the defendants for taking a lease in the name of a trustee for the use or benefit of the defendants, the case might have been different, under the authority just referred to. But no agreement or liability could have existed between the landlord and the defendants prior to or at the time of making the lease in question, because the defendants were not incorporated till several months afterwards.

The knowledge of the directors of the incorporation, or some of them, that the lease had -been taken by the lessee some months before they became incorporated, for the benefit of or in trust for such corporation thereafter to be formed, was not sufficient to create any liability on the part of the defendants, (the corporation,) legal or equitable.

If the individuals composing the corporation were the same as those composing the association for whom the lease was taken, the plaintiff’s action would nevertheless fail, without some act on the part of the' defendants that could be deemed equivalent to an agreement or promise to become liable as lessees, or as indemnitors of the lessee named in the lease.

The act of receiving an assignment of the lease, subject to the rents, &c., although an agreement, existed between the lessee and certain individuals who previously owned the railroad, declaring that the lease had been taken by the lessee in trust for the defendants when thereafter incorporated, devolved no extraordinary or equitable liability on the defendants.

The receipt of the lease by assignment, in the absence of any resolution or agreement to incur or undertake other liability, involved only the usual legal liability in such cases on the part of the defendants.

By the agreement referred to between the lessee and the former owners of the railroad, the lease was to be assigned to the defendants when incorporated, only on request, by virtue of a resolution. I think it may be stated that a resolution of that character was never adopted. True, Mr. Reynolds testifies that the lease was assigned to the defendants by their order or resolution, but on examining the records immediately afterwards, he admits that he cannot find it, as he understood it to have been passed. No further evidence being given on the subject, it is fairly inferable that Mr. Reynolds recedes from his first statement.

There is no evidence to sustain a contract, express or implied, either as between the plaintiff and the defendants, or as between the defendants and the lessee named in the lease.

The judgment is reversed, and new trial ordered ; costs to abide the event.