Tantum v. Keller

• Decision Date: 09 January 1924
• Docket Number: No. 54/136.,54/136.
• Citation: 123 A. 299
• Parties: TANTUM v. KELLER.
• Court: New Jersey Supreme Court

123 A. 299

TANTUM

v. KELLER.

No. 54/136.

Court of Chancerv of New Jersey.

Jan. 9, 1924.

(Syllabus by the Court.)

Suit by Harry H. Tantum against Anna Keller. Decree for complainant.

Oassel R. Ruhlman, of Trenton, for complainant.

James J. McGoogan, of Trenton, for defendant.

BUCHANAN, V. C. Defendant, being the owner of certain premises situate in the city of Trenton, leased the same for a term of five years from January 1, 1919, to Nathan Krupnick. The latter subsequently assigned the lease to Morris Horowitz, and he in turn to complainant. Written consent to each assignment, although not required by the terms of the lease, was in fact given by defendant and the latter duly recognized complainant as tenant under the lease and thereafter accepted from him the rents reserved thereby.

The lease contained a clause or provision, which is interpreted by complainant as an option to purchase. If it be such option and exercisable by him (which are the matters in dispute), he has duly elected to exercise it, duly notified complainant of such election and tendered full performance on his own part, and defendant has refused to convey; wherefore complainant seeks a decree for specific performance.

The defenses interposed are purely legal: First, that the clause in question is not an option, is not an irrevocable offer to sell which matures into a legal obligation upon the election of lessee and tender of performance by him, but is instead a promise or obligation not to sell to any one else without first offering to sell to the lessee; and, second, that whatever right or interest inured to the lessee, by reason of this provision, was purely personal in the lessee, not assignable, and hence not now inherent in complainant. (A third defense is set up in the answer, but it is without merit and was abandoned at the hearing.)

The clause the interpretation whereof is in dispute reads as follows:

"First privilege is extended to the said party of the second part to purchase said property at any time during this lease term at a price of fifty-five hundred dollars, size of lot 26.6'xl00', more or less."

It may be conceded that to one accustomed to legal nicety in the choice of words there is a distinct difference in definition between "privilege" and "right"; nevertheless the two words are commonly used interchangeably as synonymous, not only amongst laymen, but by lawyers, and, indeed, not infrequently, it must be admitted, even in judicial opinions.

That the word "privilege" (if standing by itself), when used in such a provision as the one under consideration, is to be interpreted as equivalent to "right," is not open to question, I take it, in view of the decisions in Hawralty v. Warren, 18 N. J. Eq. 124, 90 Am. Dec. 613; Charles J. Smith & Co., Inc., nr. Anderson, 84 N. J. Eq. 681, 95 Atl. 358; and Behr v. Hurwitz, 90 N. J. Eq. 110, 105 Atl. 486. Defendant in fact has not argued to the contrary.

Nor has she raised any issue as to the meaning of the word "extended"—which also is technically in-chosen in the present instance, but which in common parlance is used with great frequency in conjunction with the word "privilege." Clearly it must here be interpreted as equivalent to "given."

Her argument is rested upon the fact that that which is extended or given to the lessee is not "the privilege" to purchase, but "first privilege" to purchase; and upon the cases of Holloway v. Schmidt, 33 Misc. Rep. 747, 67 N. Y. Supp. 169, Walsh v. Ft Schuyler Brewing Co., 83 Misc. Rep. 488, 146 N. Y. Supp. 160, Hill v. Prior, 79 N. H. 188, 106 Atl. 641, Cloverdale v. Littlefield. 240 Mass. 129, 133 N. E. 565, and Reed v. Campbell, 43 N. J. Eq. 406, 4 Atl. 433, cited in support of the proposition that when the words "first priviledge" or "first right" are used, the lessor's intent must be deemed to have been not the creation of a positive obligation upon himself to convey, at the election of the lessee, but a negative obligation—to convey to no one else unless lessee should be unwilling to purchase on the same terms. These cases (except the last named) are all lease cases involving clauses giving lessee the "first privilege" or "first right" to a renewal or second lease, and hold that the lessee is not given an absolute right to such renewal, but only a right to the first opportunity to renew if the landlord is then willing to lease to any one; that such is the necessary meaning if any force and effect is to be given to the word "first" (In Reed v. Campbell, supra, the clause was "first right to lease the said premises for the next succeeding year or years"; but the meaning of "first right" was not decided, the case being disposed of on other grounds.)

Upon the facts as stated in the opinions in the four cases just mentioned, I see no reason to differ from the conclusions therein reached. Indeed, my impression at the oral argument in this case was that the words "first privilege" must here be similarly construed. Consideration, however, leads me to a different result The facts in the present case are different; it is a right or privilege of purchase, not of renewal of lease, and the additional language in the clause seems to me to be of controlling significance.

The most significant thing I deem to be the fixing of the price. The fact that the clause is in the lease at all (whichever way it be construed) shows that the lessee had wanted an option—an absolute right to purchase. Construed as such option, the fixing of the price and all the rest of the paragraph is perfectly natural and proper. But construed as a mere conditional right, it follows that the lessor was unwilling to give the option or absolute right, and we have this situation: That an owner, who was unable or unwilling to decide then and there whether or not she would be willing to sell at all during the next five years for a certain fixed price, was nevertheless able and willing to decide that if, during the next five years, she did desire to sell, she would sell at that...