Clement v. Young-McShea Amusement Co.

• Decision Date: 05 April 1905
• Citation: 60 A. 419,69 N.J.E. 347
• Parties: CLEMENT et al. v. YOUNG—McSHEA AMUSEMENT CO. et al.
• Court: New Jersey Court of Chancery

60 A. 419

69 N.J.E. 347

CLEMENT et al.

v. YOUNG—McSHEA AMUSEMENT CO. et al.

Court of Chancery of New Jersey.

April 5, 1905.

Bill by Thomas J. Clement and others against the Young-McShea Amusement Company and others for the reformation of a lease, and to enjoin prosecution of an ejectment suit to oust complainants from the rented property. Decree for complainants.

Howard Carrow, for complainants. Thompson & Cole, for defendants.

BERGEN, V. C. May 1, 1902, John L. Young executed a lease to the complainant Mary J. Clement for a small room situate on the south of the entrance to what is called "Young's Hotel," in Atlantic City. The period covered by the lease was 10 years from July 1, 1902, at an annual rent of $1,000. The tenant entered into possession, and has complied with all of the conditions of the lease assumed by her, in strict accordance with their terms. In order to put the property to the use for which it was rented, the complainant expended in machinery and fixtures over $8,000, the value of which will be practically destroyed if the defendant succeeds in its effort to dispossess her, because it was manufactured with reference to the size and shape of the leased building, and could not be put to use elsewhere. The premises are part of a business venture, originally of John L. Young, which includes a large ocean pier, of extensive proportions, devoted to public amusements, known and advertised as "Young's Pier"; the portion of Young's Hotel occupied by the complainant being nearly, if not quite, opposite the entrance to the pier.

The property, previous to the execution of the lease, had been conveyed by Young, the former owner, to the Young-McShea Amusement Company, but the management and control thereof continued to be exercised by Young; and it was with him, without notice of the corporate ownership, that the defendant negotiated. When the terms had been agreed upon, a writing in the form of a lease, executed by John L. Young, of the one part, and Mary J. Clement, of the other part, was delivered to the complainant by Mr. Shackelford, the son-in-law and general manager for Young. Under this lease the complainant entered into possession, expended the large sum of money above mentioned in fitting up the property, and for two years paid their rent to Mr. Young or Mr. Shackelford, treasurers of the company, when an ejectment suit was commenced by the amusement company to recover from the complainants the possession of the property. Since the bringing of this ejectment suit the complainants have remained in possession of the property, paying rent for the period since elapsed, to the amount of $1,000, to the treasurer of the plaintiff in ejectment.

The capital stock of the defendant company is divided into 1,500 shares, all of which, with the exception of 61 shares, at the time of the making of this lease were, and still are, owned by Young, who at the time of the execution of this lease was the treasurer, and acted as the manager in control of all of the property; making leases with other tenants in his own name as lessor, precisely as the lease with complainants was executed. While the negotiations were conducted and concluded with Mr. Young, the signature to the lease was written by Mr. Shackelford; but, in view of the fact that Mr. Young, who concluded the negotiation, afterward accepted the rent with knowledge of the lease, he will be held to have authorized his signature. The amusement company, desiring to obtain possession of the demised premises, commenced a suit in ejectment against the complainants in the Supreme Court of this state on the 19th day of July, 1904, based upon the ground that Young, not having the legal title, was unable lawfully to let the premises. To restrain this suit, and compel the amusement company to execute a proper lease according to the terms agreed upon between the complainant and Young as its agent, the bill in this cause was filed. All of the rent, now amounting to $6,000, was received by the respective treasurers of the company, and used for the benefit of the amusement company. While the complainants were making their expenditures, and after they had opened business, they were visited at different times by nearly all of the officers of the company—the president being one—who saw complainants in possession, and had actual knowledge of the character of the business they were carrying on, and the improvements made. The defendants now insist that Mr. Young had no authority from the company to make this lease, and that their standing by while the complainants were acting under their agreement with Young, and permitting Young to collect during 1902, as treasurer, and Shackelford since then, as treasurer, the rents, and apply them for the benefit of the company, cannot amount to a ratification, because the officers of the company, other than Young and Shackelford, had no knowledge of the character of the lease, and consequently could not be held to have intended a ratification. They also claim that, if Mr. Young was acting as the agent of the company when the lease was made, he did so without...