Piedmont Hotel Co. v. A.E. Nettleton Co.

• Decision Date: 21 November 1933
• Citation: Piedmont Hotel Co. v. A.E. Nettleton Co., 263 N.Y. 25, 188 N.E. 145 (N.Y. 1933)
• Parties: PIEDMONT HOTEL CO. v. A. E. NETTLETON CO.
• Court: New York Court of Appeals Court of Appeals

263 N.Y. 25

188 N.E. 145

PIEDMONT HOTEL CO.

v.A. E. NETTLETON CO.

Court of Appeals of New York.

Nov. 21, 1933.

Action by Piedmont Hotel Company against A. E. Nettleton Company. From an order of the Appellate Division (238 App. Div. 764, 261 N. Y. S. 1035), reversing an order of the Special Term denying plaintiff's motion for summary judgment, defendant, by permission, appeals on certified question.

Order of Appellate Division reversed, and that of the Special Term affirmed, and certified question answered.

See also 262 N. Y. 517, 188 N. E. 45.

Appeal from Supreme Court, Appellate Division, Fourth department.

Edward Schoeneck, of Syracuse, for appellant.

Henry S. Fraser, of Syracuse, for respondent.

HUBBS, Judge.

This is an action brought by the landlord to recover rent under a lease of premises situate in Atlanta, Ga. The lease prepared on a form furnished by plaintiff-respondent and mailed from Atlanta to appellant at Syracuse, N. Y., contained the following printed clauses:

‘17. This lease shall not be assigned, nor shall the Lessee sublet the premises or any part thereof without the written consent of the Lessor. This provision shall not be waived except in writing.

‘18. In the event these premises are subleased, or this contract is assigned under the terms and in the manner herein permitted, such sub-tenant or assignee shall become liable directly to the Lessor hereunder to the same extent as to all things herein mentioned, without relieving any liability of the Lessee.’

The appellant caused to be included the following typewritten clause: ‘3. * * * C. Lessor understands that the A. E. Nettleton Company will cause to be formed the Atlanta Nettleton Company, Inc., under the laws of the State of New York and that when the same is duly qualified for doing business in the State of Georgia, Lessor agrees that this lease together with all of its rights, duties and obligations shall be assigned and transferred from the A. E. Nettleton Company to said Atlanta Nettleton Company, Inc., without any further consent on the part of this Lessor.’

It is alleged in the answer that by the lease set forth in the complaint it was understood and agreed that the defendant should cause to be formed the Atlanta Nettleton Company, Inc., that when said corporation was qualified to do business in the state of Georgia, the lease was to be assigned and transferred to it without further consent from the plaintiff, and ‘the defendant should thereupon be relieved and discharged of all liability on said lease’; that after the execution of the lease, Atlanta Nettleton Company, Inc., was incorporated, was admitted to do business in the state of Georgia, and defendant caused the lease, ‘together with all the rights, duties and obligations,’ to be ‘assigned and transferred from the defendantto the Atlanta Nettleton Company, Inc.,’ which thereupon assumed and agreed to perform all duties and obligations of the lease upon the part of the lessee to be performed; ‘that said Atlanta Nettleton Company, Inc., entered into possession of the premises,’ and ‘paid to the plaintiff the rent owing under said lease and plaintiff accepted the same,’ and ‘that plaintiff duly accepted said Atlanta Nettleton Company, Inc., in place of defendant as lessee, and in full discharge of and substitution for the defendant,’ and that ‘the defendant was thereby fully and finally discharged from all liability on said lease.’

The plaintiff moved for summary judgment under rule 113 of the Rules of Civil Practice, which was denied at Special Term. The Appellate Division reversed, one justice dissenting, and granted leave to appeal to this court upon the following certified question: ‘Was the defendant's answer sufficient in law to constitute a defense to plaintiff's alleged cause of action?’

The answer to that question depends on the interpretation which may reasonably and properly be given to clause 3-C of the lease. May it be said, as a matter of law, that the words ‘this lease together with all its rights, duties and obligations shall be assigned and transferred from the A. E. Nettleton Company to said Atlanta Nettleton Company, Inc., without any further consent on the part of this Lessor,’ provide for a novation upon the transfer of the lease to the Atlanta Nettleton Company, Inc., or does the inclusion of clause 3-C in the lease which contained clauses 17 and 18 create an ambiguity and present an issue upon a question of fact?

It does not seem to us that upon proof of a transfer of the lease as permitted by clause 3-C, it could be held as a matter of law that obligation to pay...