Mausert v. Christian Feigenspan

• Decision Date: 06 December 1905
• Citation: 68 N.J.E. 671,64 A. 801
• Parties: MAUSERT v. CHRISTIAN FEIGENSPAN.
• Court: New Jersey Court of Chancery

64 A. 801

68 N.J.E. 671

MAUSERT

v. CHRISTIAN FEIGENSPAN.^*

Court of Chancery of New Jersey.

Dec. 6, 1905.

Bill by George E. Mausert against Christian Feigenspan, a corporation. Decree ordered.

Biker & Riker, for complainant Scott German and Francis Child, for defendant.

EMERY, V. C. In this case both complainant and defendant agree that complainant is entitled to the specific performance of the contract between them, dated May 20, 1902, in relation to the execution of a lease, and as to the lease itself the case is one for the settlement of the terms or conditions to be inserted in the lease. Two disputes arise in reference to these terms. First, whether the defendant is entitled to insert a clause against assignment or subletting without consent; and, second, whether complainant is entitled to have inserted in the lease a modification of the clause, which was, under the contract, to be inserted in the lease, relating to the sale of beer or liquors on the premises.

On the first point I conclude that the clause against assignment and subletting without defendant's consent is not to be inserted. The agreement does not provide for such clause, and it expressly contemplates assignment of the agreement; and the last clause of it provides that it shall bind the assigns of the parties. The defendant is, however, entitled to have the lease recite that it is executed pursuant to the agreement, and to recite the provisions of the agreement relating to the use and sale of defendant's goods. Defendant is entitled to this in order that, when the lease is executed, it may be in a position to enforce against any assignee of complainant whatever rights, legal or equitable, it may have by reason of the agreement and its provisions for binding assignees.

As to the modification of the agreement contained in the written contract of May 20, 1902, for the sale of liquors, my conclusion is that a covenant of this character is a restriction of the use of lands, and within the statute of frauds. The subsequent modification relied on by complainant in his bill is denied in the answer, and, except to the extent set up by the answer, is proved only by parol. The statute of frauds not having been set up in the answer, the contract, as modified, can be enforced so far as admitted by the answer, but only to that extent. Ashmore v. Evans, 11 N. J. Eq. 151 (Chancellor Williamson, 1856); Gough v. Williamson, 62 N. J. Eq. 526, 50 Atl. 323. Defendant claims that the covenant is not within the statute because it is a purely personal covenant, collateral to the use of the land, and does not run with the land. Whether the covenant runs with the land is not, at least in equity, the test of the applicability of the statute, for in equity it is settled that an assignee of land with notice is subject to the restrictions, irrespective of the question whether the covenant runs with the land. Kirkpatrick v. Peshine, 24 N. J. Eq. 206, 213; Brewer v. Marshall, 19 N. J. Eq. 537, 542, 97 Am. Dec. 679 (Court of Errors and Appeals, 1868). In the present case, I think it was clearly intended by the parties that the covenant related to the premises. The agreement recites that the object of defendant in taking the option and lease was to open the premises for one of its customers for the sale of its goods, and that the complainant desired to establish himself in the premises as a customer of defendant for the purpose of opening a saloon and selling the goods of defendant. The covenant which is to be inserted in the lease of the premises is that complainant is "to use and sell exclusively the goods manufactured by defendant, except those imported from a foreign country outside of the United States." Taking the whole agreement together, this covenant clearly relates to the exclusive use and sale on the leased premises of defendant's goods for the term of the lease (five years), and is to that extent a covenant restricting the use of the lands leased, and is an equity attached to the lands by the lessor. It is therefore within the statute of frauds. In Manchester Brewery Co. v. Coombs, 2 Ch. Div. 608, 612 (1901), a covenant by a lessee to buy beer of the lessors and "their successors in business" was held to be a covenant running with the land. There have been no acts of part performance to take the case out of the statute. In reference to the modification of the contract, I think, also, that the point is well taken that the authority of the president of the corporation to modify the contract in the manner claimed by complainant has not been shown. The clause relating to the sale of liquors will therefore be the clause in the agreement, with the modifications stated in the answer.

Second. In reference to the amount due upon the mortgage, the principal dispute is whether the complainant, in estimating the amount due upon the mortgage, is entitled to a deduction of the amount paid by defendant in the settlement of the debts incurred by Sicke & Co., the contractors, to materialmen and others for materials and labor included in their contract, and for which the contractors had been previously paid. These creditors claimed liens upon the leasehold and fixtures, and at the time of giving the...