W. Shore R. Co. v. Wenner

• Decision Date: 29 February 1904
• Parties: WEST SHORE R. CO. et al. v. WENNER et al.
• Court: New Jersey Supreme Court

57 A. 408

70 N.J.L. 233

WEST SHORE R. CO. et al.

v. WENNER et al.

Court of Errors and Appeals of New Jersey.

Feb. 29, 1904.

(Syllabus by the Court.)

Error to Supreme Court.

Action by the West Shore Railroad Company and others against C. William Wennei and Philip Bindernagle. Judgment for defendants, and plaintiffs bring error. Reversed.

Vredenburgh, Wall & Van Winkle, for plaintiffs in error.

John Griffin, for defendants in error.

DIXON. J. By Indenture dated August 26, 1895, the plaintiffs leased to Simon Kelly a lot of land in Weehawken, Hudson county, for the term of 10 years from September 1, 1895. The lease contains the following clause: "The said party of the second part (the lessee) for himself, his executors, administrators and assigns, does hereby covenant and agree to and with the said parties of the first part (the lessors), their successors and assigns, * * * that the said party of the second part, his executors, administrators or assigns, or any of them, shall not nor will, at any time or times hereafter during the term hereby granted, lease, let or demise all or any part of the said premises, nor assign, transfer or make over the same or this present lease or any of his or their term of time therein, to any person or persons whomsoever, without the consent of said parties of the first part, their successors or assigns, in writing under their seal, for that purpose first had and obtained." Another clause in the lease was as follows: "This present lease is on this express condition, that if the said party of the second part, his successors or assigns, shall fail in the performance of any or either of the covenants, conditions or provisos in these presents contained, which on the part and behalf of the said party of the second part, his executors, administrators or assigns, are or ought to be observed, performed, fulfilled and kept, then and from thenceforth this present indenture and the estate hereby granted, and every clause, article and thing herein contained, on the part and behalf of the said parties of the first part to be performed, fulfilled and kept, shall cease, determine and be utterly void to all intents and purposes whatsoever." On September 1, 1896, the lessee, being in possession of the demised premises, executed a mortgage to the Lembeck & Betz Eagle Brewing Company, whereby he granted, conveyed, sold, assigned, transferred, and set over to that company the said lease and all his estate and rights under the same, subject to the rents, covenants, conditions, and provisions in the said lease mentioned, to secure the payment of $10,000 in six months from September 1, 1896. The lessee died in May, 1900, in possession of the premises. On bill filed February 18, 1901, in the Court of Chancery to foreclose this mortgage, the lease was, on June 18, 1901, granted, bargained, sold, and conveyed by one of the masters in chancery to C. William Wenner, who subsequently took possession of the demised premises, and sublet them to Philip Bindernagle. Afterwards the plaintiffs brought this action of ejectment in the Supreme Court against Wenner and Bindernagle, and at the trial in the Hudson circuit before the learned justice there presiding, without a jury, he decided in favor of the defendants, to which decision the plaintiffs duly took exception. Upon this exception the judgment for the defendants is now brought here for review.

The first question presented for consideration is whether the lessee, even if he broke the covenant against transferring the lease, can legally be said to have failed in the performance of a covenant which was to be observed, performed, fulfilled, and kept by him, within the meaning of this lease, so as to work a forfeiture; the point being that a forfeiture is to result only from a failure to perform a covenant, and the act of transferring the lease is not a "failure to perform." To support the position of the defendants on this question the decisions in Doe v. Marchetti, 1 B. & Ad. 715, and Doe v. Stevens, 3 B. & Ad. 299, are cited. Neither of these decisions is precisely in point In Marchetti's Case the right to re-enter was reserved if the lessee should make default in the performance of any covenant after 30 days' notice, and one of the covenants was that the lessee should not suffer any building to be erected. The lessee having erected a building, the court held that the re-entry clause was confined to covenants for the performance of which the lessor might give the lessee 30 days' notice, and it could not be supposed that the parties intended that the lessee should be thus notified not to erect a building, and hence the re-entry clause was not applicable. Stevens' Case is more nearly parallel. There the right to re-enter was to arise if the lessee did or caused to be done any act, matter, or thing contrary to or in breach of any covenant, and the court held that the nonperformance of a covenant to repair was not doing or causing to be done any act, matter, or thing. But this case of Doe v. Stevens was disapproved in Wheeler v. Earle, 5 Cush. (Mass.) 31, 51 Am. Dec. 41, where it was decided that the breach of a covenant "not to occupy the demised premises for an unlawful purpose" gave to the lessor a right to re enter, which was reserved "if the lessee failed to perform and observe any covenant which, on his part was to be performed"; thus distinctly holding that the lessee, by doing what he had cove nanted not to do, had failed to perform his covenant. Shortly after this decision in Massachusetts the case of Croft v. Lumley, 6 H. L. C. 672, came before the House of Lords. There one of the covenants by the lessee was that he would not "charge or incumber" the demised premises "by mortgaging the same, or granting any rent charges, or by any other incumbrance whatsoever"; and a right of re-entry was reserved to the lessor if the lessee "should make default of or in the "performance" of any covenants "which on his part are or ought to be performed, observed, and kept." Nine judges being summoned to present their opinions to the house, one of the questions propounded to them was whether a breach of the covenant above mentioned gave the lessor a right to re-enter, and unanimously they answered in the affirmative. Mr. Baron Watson said: "It is a proper rule of construction that the object and intent of the covenant must be looked at as well as the words used," and "the proviso for re-entry would apply to and embrace negative as well as positive covenants." Mr. Baron Bramwell said: "Default in performance of covenants to be performed, observed, and kept applied to covenants not to do something as well as to covenants to do...