Ivy Courts Realty Co. v. Barker

Full title: IVY COURTS REALTY COMPANY, Appellant, v . WILLIAM H. BARKER, Respondent

Court: Supreme Court, Appellate Term

Date published: Apr 1, 1911

71 Misc. 460 (N.Y. App. Term 1911)

128 N.Y.S. 715

Opinion

April, 1911.

Louis E. Felix, for appellant.

Francis Colety, for respondent.

LEHMAN, J.

The plaintiff is the owner of an apartment house and seeks to hold the defendant as a hold-over after the expiration of his lease. In order to establish the terms of the original lease, the plaintiff offered in evidence a lease in the name of R.F. Kilpatrick, agent, and signed by the defendant. The lease bore no seal but was in printed form and contained an attestation clause: "In Witness Whereof we have hereunto set our hand and seal the 25th day of September, 1908." The defendant objected that this instrument was incomplete in that it was unsigned by the other party and offered the plaintiff its own copy, signed by R.F. Kilpatrick, Agent, by R.J. Sophian, Mgr., and by himself and bearing two seals and the plaintiff introduced this copy in evidence.

It appeared thereafter that R.F. Kilpatrick was plaintiff's agent, but the defendant objected that no undisclosed principal could sue upon a sealed instrument. Thereupon Sophian, who executed the agreement, testified that the seals were not placed upon defendant's lease at the time of the execution and that he had never seen the seals before. The plaintiff then offered to withdraw the sealed copy of the lease which it had apparently inadvertently offered in evidence and to substitute its own copy, and this copy was also admitted in evidence. At the close of the plaintiff's case the defendant moved to dismiss and then rested. Thereafter the trial justice gave judgment for the defendant in a memorandum opinion: "The grounds for this judgment are set forth in Metropolitan Life Insurance Co. v. Bender, 124 N.Y. 47; Schaefer v. Henkel, 75 N.Y. 378; Briggs v. Partridge, 64 N.Y. 357."

The last two cases decided "that in general an action upon a sealed instrument of this description must be brought by and in the name of a person who is a party to such instrument, and that a third person or a stranger to the instrument cannot maintain an action upon the same." Schaefer v. Henkel, supra, 381. There can be no doubt but that this rule is well settled and apparently the learned trial justice considered that, under authority of Life Insurance Co. v. Bender, the lease in evidence must be regarded as a sealed instrument and that in consequence the plaintiff cannot maintain this cause of action.

It seems to me, however, that the lease is not a sealed instrument and that, even if it were, it does not follow that the plaintiff cannot hold the defendant as a hold-over after the expiration of his lease.

The case of Metropolitan Life Insurance Co. v. Bender decided only that, where a person knowing and realizing the difference between a sealed and unsealed instrument signed a penal bond containing a statement that it was "sealed with our seals" and then delivered it to a person interested in procuring its acceptance, who then had the paper signed by a second obligor and in good faith affixed seals to the signatures, and then delivered it to the obligee who accepted it in good faith as a sealed instrument, the obligor is estopped from showing that the instrument was not sealed by him, and that his liability was no greater than if the instrument had been unsealed. The decision rests upon the proposition that: "The recital of a material fact in a bond which is accepted by the obligee and acted on in the belief of the truth of the statement, estops the obligor from showing in an action on the bond that the recital is not true" (p. 51). In the case under consideration the defendant knew that the lease was not sealed, and was not deceived by the recital, and consequently no estoppel arises. The landlord does not seek to escape any liability to which it would have been subject if the lease had been under seal, for the lease was effective against him only if unsealed; but it is the tenant who now seeks to have it declared invalid. The case relied on is authority rather for the view that the lease must be regarded as an unsealed instrument, since the opinion clearly intimates that, if the bond had been actually delivered unsealed, the obligor could have established his defense. "Had the defendant intended in good faith to execute and deliver an unsealed instrument, he should have stricken out the words quoted or have taken great care to have it delivered to the obligee as executed by him, but he did neither." Any presumption that might arise from the recital seems to me completely met by the undisputed evidence in this case that the lease was actually unsealed and by the circumstances that it would not have been effective to bind the landlord if it had been sealed.

Moreover, even if the lease was not binding upon the landlord at the time it was executed, it by no means follows that the landlord cannot maintain this action. In Anderson v. Conner, 43 Misc. 384, it was held that, while the landlord cannot show that a lease executed under seal by his agent in his own name accompanied by the designation agent was in fact executed in behalf of the landlord, yet where the landlord thereafter recognizes the lessee as his tenant he ratifies and accepts the lease and "when thus ratified it would become valid and effectual for every purpose" (p. 386). The opinion in that case was expressly adopted by the Appellate Division (2d Dept.) in the case of United Realty Mortgage Co. v. Stoothoff, 133 A.D. 245, and it would appear, therefore, that, after the tenant had occupied the premises with the landlord's consent under a sealed lease for a year, the landlord could sue or be sued under the lease. In any event, however, the lease has now expired and the landlord is no longer asserting any rights thereunder. It is asserting rights under a new contract implied by law from the defendant's acts. No privity of contract between it and the defendant need be shown in such an action; a privity of estate is sufficient. United M. Realty Imp. Co. v. Roth, 193 N.Y. 570. The prior lease is referred to only for the purpose of establishing the terms of the new implied agreement, and no rule of law exists which can prevent a stranger to a sealed instrument using it for such purpose.

The defendant also claims that the trial justice had no right to permit the plaintiff to amend the complaint. The description was intended to identify the plaintiff actually in court and the amendment cured the error in the description but brought in no new party and was, therefore, correctly permitted.

The judgment should be reversed and a new trial granted, with costs to appellant to abide the event.

SEABURY and BIJUR, JJ., concur.

Judgment reversed.