Texaco Inc. v. A. A. Gold Inc.
| Citation | 78 Misc.2d 1050,357 N.Y.S.2d 951 |
| Parties | TEXACO INC. v. A.A. GOLD INC. et al. |
| Decision Date | 03 April 1974 |
| Court | United States State Supreme Court (New York) |
Bleakley, Platt, Schmidt & Fritz, New York City (George J. Marchese, New York City, of counsel), for plaintiff.
Arnold P. Azarow, New York City, for defendant.
This is an action in ejectment. Plaintiff and defendant A.A. Gold Inc., entered into an agreement of lease dated February 1, 1972 wherein and whereby the plaintiff, as lessor, leased to defendant A.A. Gold Inc., as lessee, certain property located at the corner of Tillary and Gold Streets, in the Borough of Brooklyn, City of New York, which said premises had previously been used as a gasoline service station. The premises are not described in the lease by metes and bounds, except on the corner of Tillary and Gold Streets, and then described as follows:
'Excepting and reserving, however, from the foregoing demise that portion of the premises on which there is now or may hereafter be located and installed a public telephone booth, it being expressly understood and agreed by and between lessee and lessor that this lease is subject to a right of access to such telephone booth by the telephone company which owns the same and a right of access to and use by the public in common with lessee and lessee's customers of such public telephone as well as a further right to the telephone company which owns such telephone to maintain on the demised premises a sign or signs customarily displayed by such telephone company to advise the public of the availability of a public telephone booth; provided, however, that such sign or signs shall be so located as not to interfere with the service station business carried on at the demised premises together with the buildings, improvements, fixtures, equipment and facilities owned or leased by lessor, now located on said premises or which lessor may hereafter, during the continuance of this lease, erect or place thereon.'
Notwithstanding the fact that the instrument of lease does not accurately describe the demised premises, the defendant in opposing plaintiff's application for a preliminary injunction against it does not question the description of the property alleged in the complaint as '* * * located at the corner of Tillary and Gold Streets in Brooklyn, New York, * * *.'
The lease provides that 'Unless sooner terminated as hereinafter provided, this lease shall remain in force and effect for an initial period beginning March 1, 1972 and ending February 28, 1973 and thereafter from year to year, but subject to termination by either party at the end of such initial period or any subsequent year on ten days' prior written notice; * * *.'
It has been established that the lessor gave ten days' notice that the lease would be terminated on February 28, 1974 in accordance with the terms and provisions thereof.
Simultaneously with the execution of this lease and on February 1, 1972, the plaintiff and said named defendant entered into an agreement of sale prepared by plaintiff wherein the plaintiff, as seller, agreed to sell to the said named defendant, located at Tillary and Gold Streets, Brooklyn, New York, as purchaser, and the purchaser agreed to buy, to receive, and pay for plaintiff's products as set forth in said agreement. The point of delivery is designated as 'Tillary & Gold Streets, Brooklyn, New York.' The prices were f.o.b. purchaser's place of business. Delivery by seller's truck and terms of payment were specified. The agreement of sale was subject to the provisions printed on the reverse side thereof except such as by their terms are inapplicable. The duration of the agreement was from March 1, 1972 to February 28, 1973 and thereafter from year to year. However, it was provided therein that either the purchaser or the seller may terminate the agreement at the end of the first year or any succeeding year by giving written notice to the other party thereto at least sixty days prior to the date upon which such termination shall become effective. The agreement of sale also provided that either party may terminate the agreement 'forthwith' by written notice upon failure of the other party to perform strictly any of the obligations imposed upon the other hereby.' There is no allegation in this complaint of any basis upon which forthwith termination may be predicated. The agreement then provides:
'(6) d. If this agreement covers delivery at premises leased by Seller to Purchaser, it shall automatically terminate upon termination or cancellation of such lease.'
Obviously, it is the clear intention of the parties that the lease and the agreement of sale shall be read together and, that, but for the provision in paragraph (6) d of the agreement of sale, failure to give sixty days' prior notice of termination of the sales agreement would be fatal to its termination, except for termination of the lease on the giving of ten days' notice of termination. The provision of the agreement of sale referred to in the opinion of the court coordinates termination of the agreement of sale with cancellation of the lease.
The defendant, in opposing the motion, argues that the lease and the agreement of sale, collectively referred to by it, is a franchise agreement which must be read together and points out the discrepancy between the sixty days' notice of termination in the agreement of sale and the ten days' notice of termination in the lease. Defendant makes no reference to the provision in (6) d of the agreement of sale. Defendant therefore claims that the two agreements when read together must be construed as establishing a franchise relationship with all the rights and obligations of a franchisor and franchisee attendant thereto, and refers to the New Jersey Franchise Practices Act and to the case of Shell Oil Co. v. Marinello, 120 N.J.Super. 357, 294 A.2d 253 (1972). In that case the plaintiff brought a proceeding to dispossess defendant lessee on the ground that the plaintiff had terminated defendant's contract and lease at the end of its term. The defendant had been the holder of a franchise from the plaintiff for thirteen years prior to said termination by the plaintiff. The court held that the 'letter' of the New Jersey Franchise Practices Act could not be applied to this fact-pattern, because all pre-existing franchises were exempted from its application, but nevertheless found little difficulty in adapting its 'spirit,' saying at 375, 294 A.2d at 263:
'In the performance of (their) function legislative judgments may be and frequently are highly persuasive in pointing out to the courts the direction in which they ought to go * * * in the pursuit of this judicial goal.'
However, the court took a much more pragmatic view of the contract relationship than that taken in Division of Triple T Service, Inc. v. Mobil Oil Corp., infra:
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...cases which tend to indicate that the New York courts will enforce a termination clause as written include Texaco, Inc. v. A. A. Gold, Inc., 78 Misc.2d 1050, 357 N.Y.S.2d 951 (S.Ct. Kings Co.), aff'd, 45 A.D.2d 1054, 358 N.Y.S.2d 973 (2d Dept. 1974); Mobil Oil Corp. v. Lione, 66 Misc.2d 599......
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