Opinion
February 23, 1940.
Action by William Adam Schulz Co., Inc., against the Realty Associates, Inc., and others for brokerage commissions. On defendants' motion for summary judgment dismissing the complaint.
Motion granted.
William Halpern, of New York City, for plaintiff.
Lynn G. Goodnough, of Brooklyn, for defendants.
Plaintiff seeks to recover alleged brokerage commissions. Briefly, the facts are as follows.
On August 9, 1937, plaintiff, a real estate broker, successfully negotiated a lease for a store between defendant Realty Associate Securities Corporation, as landlord, and Herman Berne, Inc., as tenant, for a term of two years; $150 a month for the first year and $175 a month for the second year.
The lease, among other things, provided for an option to renew, as follows:
"The tenant shall have the option to renew this lease for a further term of one year from November 1, 1939 to October 31, 1940 at a rental of $2400 payable monthly in equal instalments of $200, — each, commencing on November 1, 1939 and ending on October 31, 1940.
"It is distinctly understood that the tenant is to advise the landlord of its intention to exercise this option, by notice in writing, on or before June 1, 1939. In the event that the tenant fails to exercise this option on or before June 1, 1939, the term of this lease will end on October 31, 1939 as hereinbefore provided."
The tenant failed to exercise this option and it terminated on June 1, 1939.
On August 9, 1939, the landlord entered into a new lease with this tenant for a term of three years from the expiration of the old lease at an annual rental of $2,220, payable in equal monthly instalments of $185. This lease is alleged to have been negotiated through a different real estate broker, one M. Mannheimer, who received commissions therefor. Plaintiff did not participate in the latter negotiations.
In this action, plaintiff is suing for commission in the sum of $60 for the period of November 1, 1939, to October 31, 1940.
The sole issue resolves itself into a question of law.
Unquestionably, the tenant herein refused to exercise the option for renewal of the lease prior to June 1, 1939, and the right to an extended term of the lease expired thereafter and was at an end. The parties were then at liberty to make the new lease, which was not the result of any services performed by the plaintiff, and for which the plaintiff should not be entitled to recover a commission.
The new lease itself showed that it was executed, not as the result of the exercise of the option by the tenant, but of an entirely new letting, upon different terms. Allwin Realty Co. v. Barth, 161 App.Div. 568, 146 N.Y.S. 960. The new lease was for a term of three years on the basis of $185 a month, whereas if the option had been exercised the rental would have been for only one year on the basis of $200 per month.
The conditions under which a broker may recover commissions upon a renewal rental are clearly and concisely set forth in Mitchnik v. Brennan, 159 Misc. 287, 286 N.Y.S. 609, 613. "To sustain an action for a broker's commissions on a renewal rental there must be proof (1) of a special agreement between the broker and the lessor, Mullen Woods, Inc. v. 615 West 57th Street, Inc. [ 146 Misc. 599, 262 N.Y.S. 467, 468], supra; compliance with section 31, Personal Property Law, Allwin Realty Co. v. Barth, supra; (2) that the renewal was for the same term and rent, Tracy v. Albany Exchange Co. [ 7 N.Y. 472, 474, 57 Am.Dec. 538], supra; in the event of failure to prove, (3) there must be proof that the new lease was the result of services performed by the broker and for which he should be entitled to recover, Allwin Realty Co. v. Barth, supra." In the Mitchnik case, the real estate broker attempted to recover commissions based on a paragraph of the lease providing for the payment of commissions on a renewal. By agreement between the landlord and tenant, the lease was cancelled but the tenant remained in possession from month to month, paying a rental less than that provided for in the original lease. Under these circumstances, the court held there was no "renewal" and that the tenant had not remained on the property as a result of the broker's efforts and the complaint was dismissed upon the merits.
Plaintiff herein does not allege a special agreement with the defendants to pay additional commissions upon either a renewal of the old lease or the execution of a new lease, but relies solely upon the option clause of the old lease. A proper construction of the language and intention thereof affords no implication to pay plaintiff any commission. It is manifest that the plaintiff made no attempt to procure the making of the new lease or that its services were of any value insofar as the tenant remained upon the premises after November 1, 1939. Mullen Woods, Inc. v. 615 West 57th Street, Inc., supra.
Motion for summary judgment by the defendants, dismissing the complaint herein, pursuant to Rule 113 of the Rules of Civil Practice, is granted in all respects. Submit order.