Opinion
No. 52/553.
12-07-1922
BLAKE & CO. v. SMIDTH.
Elwood Weeks, of Atlantic City, for complainant. Lee F. Washington and U. G. Styron, both of Atlantic City, for defendant.
Suit by Blake & Co. against Alexander Smidth. Decree for complainant.
Elwood Weeks, of Atlantic City, for complainant.
Lee F. Washington and U. G. Styron, both of Atlantic City, for defendant.
INGERSOLL, V. C. The complainant is a tenant of the defendant by virtue of a lease entered into between them on the 9th day of September, 1920, whereby a certain property in Pleasantville, N. J., was leased for a term of ten years, from August 29, 1921, at a yearly rental of $1,080 for the first live years and of $1,200 for the next five years, payable in monthly installments in advance on the 1st day of each month.
The lease also contained a privilege of renewal for a further period of five years, and an option of purchase at the expiration of said 15 years ("provided the lease continued in effect at that time").
The lease also contained the usual clause of right of re-entry, or to proceed by action for the recovery of possession in default of payment of rent.
Default was made in payment of rent due on July 1, 1922, and an action of ejectment was instituted in the Atlantic county circuit court for the recovery of possession of the land and premises described in the lease. An answer was filed, and the suit was at issue and listed for trial at the October term, 1922.
On October 21st the complainant's attorney (who is also the president of the company) tendered to the attorney of the defendant (the plaintiff in the ejectment suit) $400 in cash as payment of all rent then in arrears, together with interest thereon, and the accrued costs in said suit, which payment was refused.
No question has been raised as to the sufficiency of this amount for said purpose. An order to show cause was allowed restraining the further prosecution of the ejectment suit. Answer and replication were filed, and by consent an order of reference was made, and upon the return day testimony was taken as on final hearing.
Quoting V. C. Pitney in Baltimore & N. Y. R. R. v. Bouvier, 70 N. J. Eq. 158, on page 181, 62 Atl. 868, on page 877:
"Prof. Pomeroy, in his treatise on Equity Jurisprudence (section 381), says: 'The general doctrine was finally settled that, wherever a penalty or forfeiture is inserted merely to secure the payment of money, or the performance of some act, or the enjoyment of some right or benefit, equity regards such payment, performance, or enjoyment as the real and principal intent of the instrument, and the penalty or forfeiture as merely an accessory,and will therefore relieve the debtor party from such penalty or forfeiture, whenever the actual damages sustained by the creditor party can be adequately compensated. The application of the principle in such cases, and the relief against penalties or forfeitures, must always depend upon the question whether compensation can or cannot be made. If the principal contract is merely for the payment of money, there can be no difficulty; the debtor party will always be relieved from the penalty or forfeiture upon paying the amount due and interest. If the principal contract is for the performance of some other act or undertaking and its nonperformance can be pecuniarily compensated, the amount of such damages will be ascertained, and the debtor will be relieved upon their payment. But the principle, in this scope of its operation, is not confined to agreements; it has been extended so as to prevent the forfeiture of a tenant's estate under a clause of re-entry for the nonpayment of rent, or for the breach of some, though not of all, the covenants contained in a lease, and to prevent the enforcement of a forfeiture for the nonperformance of conditions subsequent.'"
And a note under said section in the fourth edition reads:
"The tenant will be relieved from a forfeiture incurred by a breach of a condition for nonpayment of rent, because the extent of the lessor's real claim, the amount of rent due, can he easily ascertained and satisfied by a payment"—citing a number of cases.
The defendant contends that the complainant is not entitled to relief because he has defaulted in the payment of rent due as above stated, and has defended the said suit, and has defaulted in the payment of rent becoming due since said default. This contention is decided adversely to the defendant in B. & N. Y. R. R. v. Bouvier, supra. To the same effect is Little Rock Granite Co. v. Shall, 59 Ark. 408, 27 S. W. 562, and see notes discussing the subject, 68 Am. Dec. 85; Laurence v. Savannah, 71 Ga. 392: Mactior v. Osborn, 146 Mass. 399. 15 N. E. 641, 4 Am. St. Rep. 323.
The result is that upon the payment within 10 days from the date hereof of the rent due, with interest thereon and the costs of the ejectment suit, a decree may be entered in accordance with the above views.