
    Charles A. Hausauer and James B. Smith, Respondents, v. Sarah Dahlman and Others, Appellants.
    
      Landloi-d and tenant — agreement to give sub-lessees a further lease if the principal lease is extended — obligatory although the principal lease is not extended until a-year after it expires—waiver of service of a notice of a wish to continue a lease.
    Where premises are sub-let, until the expiration of the term of the principal lease, under a sub-lease which gives the sub-tenants the privilege of renewing their sub-lease upon notice, provided the principal lessees shall receive an extension of their lease upon its termination, and the latter, although unable to obtain such an extension upon the simultaneous expiration of the terms of the principal and the sub-lease, continue in possession of the premises and accept rent, from the sub-tenants, as tenants at will, until the following year, when they obtain a new lease from the principal lessors, the new lease (although not technically a renewal of the old one) is to be deemed an extension of the old one within the terms of the sub-lease, and binds the principal lessees to relet tó their sub-tenants.
    A lessee may, orally or by acts, waive the service of a written notice upon the. part of a sub-lessee, to the effect that he elects to continue his sub-lease for an additional term.
    
      ■ Appeal by the defendants, Sarah Dahlman and others, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Erie on the 29th day of July, 1896, upon the decision of the court rendered after a trial at the Erie Special Term, separately stating the facts found and the conclusions of law, and adjudging that the defendants were- not entitled.to damages against the plaintiffs for retaining possession of leased premises from May 1, 1892, to May 1, 1895.
    
      Simon Fleischmann, for the appellants..
    
      Adelbert Moot,, for. the respondents.
   Follett, J.:

This action was. begun April 27, 1893, to restrain the defenaants from prosecuting summary proceedings against the plaintiffs to remove them from the possession of certain premises, the plaintiffs alleging that they were lessees and entitled to the possession of ' the premises until May 1, 1895.

The defendants alleged, by way of defense and counterclaim, that the plaintiffs’ term as. lessees expired May 1, 1892, and that since that date they had wrongfully withheld possession of the leased premises to the defendants’ damage in the. sum of $1,000 for each year..

The defendants also alleged, by way ;of counterclaim, that the plaintiffs by wrongfully holding over .were liable for “ double the yearly value of the lands or .tenements so detained,” pursuant to statute. (R. S. pt. 2, chap. 1, tit. 4, § 11; 5 R. S. [9th ed.] 3575, § 200.)

The plaintiffs retained possession until May 1, 1895., This action was tried May 7, 1896, was decided July 11, 1896, and judgment was entered July 29, 1896.

By reason of the discontinuance of the summary proceedings to dispossess the plaintiffs and by the expiration of the term during .which they claimed to hold before this action was tried, the only question involved herein 'is whether the plaintiffs wrongfully withheld from the defendants the premises from May 1, T892, to May 1, 1895.

The defendants insisted on the trial and on this appeal that the plaintiffs’ term was not extended beyond May 1, 1892, because (1) the defendants’ lease from the owner of the fee was never extended beyond May 1, 1891, but a new and different lease was taken ; and (2) because the plaintiffs failed to give on or before February 1,1891, the defendants written notice of their election to have their lease extended for four years from May 1, 1891.

From May 1, 1865, to May 1, 1885, the defendants were lessees in possession, under a written lease under seal, of a piece of real estate situate on the west side of Main street in the city of Buffalo, which is forty-three and one-half feet wide north and south on said street and eighty feet deep east and west. By contract, under seal, executed June 18, 1884, between the owner of. the fee and the defendants, said lease was extended for five years, until May 1,1890, at the annual rental of $3,500, payable in equal quarterly payments. By the lease it, was provided that the lessor, at the end of the term, should pay the lessees the value of the buildings then standing on the premises, to be determined, in case the parties disagreed, by the assessors of the city of Buffalo. By contract, under seal, dated March 13, 1890, said lease was extended until the 1st day of May, 1891.

On the premises was a building erected by the defendants, which was divided into two stores, numbered 388 and 390 Main street.

March 12, 1890, the litigants entered into a contract, under their hands and seals, by which the defendants leased to the plaintiffs “ the store known as. number 390 Main street, with basement, for the term of one year, to commence on the first day of May, 1890, and to end on the first day of May, 1891, at eight o’clock in the forenoon. The said party of the second part (plaintiffs) agrees to pay to the said party of the first part (defendants) the annual rent of twenty-five hundred dollars ($2,500), in monthly payments, with the privilege of renewing this lease, at its termination, for four years longer, at the same annual rent and on the same conditions, provided that the said party of the first part (defendants) will receive an extension of their lease, at its termination, and that the said party of the second part (plaintiffs) shall, at least three months before the expiration of this lease, notify the parties of the first part (defendants), in writing, of his intention of renting said premises, for such additional term.” '

It will be observed that the lease from the owner of the fee under which the defendants held, and the lease under which the plaintiffs held from the defendants, both expired May 1-, 1891.

The defendants were unable to obtain an extension of their old lease, or a new lease, from the owner of the fee during 1891,/by Teason of a disagreement which arose between them. Nevertheless . the defendants continued in possession 'and paid to the owner of the fee the rent stipulated, in the old lease until May 1, '1892, and the plaintiffs held possession under their lease from the defendant's until. May 1, 1892, paying the stipulated rent..

During the year ending May 1, 1892, the defendants gave, and " the plaintiffs received, receipts for rent paid by which the plaintiffs ¡acknowledged that they occupied “ said premises as tenants at will ■or- by sufferance.” The purpose of these receipts was evidently to protect the defendants from a claim fo.r damages in case they and their sub-lessees should be evicted by the owner of - the fee because ■a .new lease, or an extension of the old one, had not been granted by ¡such owner. '

Negotiations were had during 1891 between the owner of the fee ¡and the defendants, in respect to a new lease, which resulted in the ■execution and delivery,.on or about February 12, 1892, of a new lease by which the owner of the fee leased to the defendants the premises for ten. years from May 1, 1891, at an annual rent of '$3,590 for the first five years and at an annual rent of $4,000 for the last five years of the term, payable in equal quarterly payments, -and at the expiration of the term the buildings on the premises, were to belong to the owner of the fee.

By .a lease executed February 12j 1892, the. defendants leased the entire, building,.Nos. 388 and 3.90 Main street, to the C. M. "Clapp Company, for nine years from May 1, 1892, at an annual rent of $9,000 for the -first four years and at.an annual rent of; :$9j500 for the last five years of said term.

March 29, 1892, the defendants served a written notice xtpon the plaintiffs, requiring them'• to quit and surrender possession of No. 390 Main -street on May 1, 1892. The plaintiffs refused to quit,, ¡and November 18,1892, the defendants began summary proceedings in the Municipal Coiirt of Buffalo to dispossess the plaintiffs on the .ground that their term had expired. Thereupon this action was-begun and a temporary injunction granted, restraining the prosecution of the summary proceedings in the.Municipal Court. A motion to vacate the injunction was denied at. Special Term,, but on appeal the order was reversed and the injunction vacated. (72 Hun, 607.)

By a stipulation entered into "between the litigants it was agreed that the plaintiffs should pay, and the defendants receive, monthly payments on account of rent at the rate stipulated in the lease, without- prejudice to the rights or claims involved in this action, under which the plaintiffs paid, and the defendants received, rent at the rate of $2,500 per year until May 1, 1895, when the plaintiffs surrendered possession of the leasfed premises to the defendants.

At tire date of the lease between the litigants the defendants were holding under a lease from the owner of the fee for a year, which expired May 1, 1892, and on the same date that the lease between the litigants expired; and the defendants contend that, because they did not secure a renewal of their outstanding lease, they were not bound by the renewal clause in the lease between the litigants to renew that lease.

It is apparent that when the litigants executed the lease of March 12, 1890, for one year, they did not contemplate that the defendants were to obtain from the owner of the fee what is technically known as “ a renewal lease,” which would have been for one year, because it is provided in the renewal clause above quoted that the plaintiffs’ renewal was to be “for- four years longer,” four years from May 1, 1891. This provision was evidently inserted upon the mutual expectation that the defendants would not obtain simply a technical renewal of their lease for one year, but would obtain a new lease for a term of sufficient length to enable them to extend the plaintiffs’ term for four years from May 1,1891. The lease between the litigants cannot be construed to mean that the defendants were not bound to extend the plaintiffs’ term for four years unless the defendants secured from the owner of the fee a technical renewal of the lease then outstanding.. The terms of the renewal clause, read-in the light of the surrounding circumstances, make it apparent, I think, that the parties did not intend that the right of the plaintiffs to a four years’ extension should be dependent upon the defendants’ securing a renewal of their léase then outstanding with the owner of the fee, but was to be dependent upon their securing a lease from the owner of the fee for a period sufficient to enable them to extend the. plaintiffs’ term for four vears, which they actually succeeded in doing.

In case a lessee enters into contractual relations with a third party in respect to the subject of the lease, and afterwards obtains a renewal, or a new lease, the renewal, or the new lease, will be deemed an extension of the original term as between the lessee and the third party, if it.be necessary for the protection of the rights of the third party. In case a lessee mortgages his term for years, and afterwards, instead of obtaining a .renewal, takes a new lease for three lives,, his new lease is subject to the mortgage. (Smith v. Chichester, 2 Dru. & Warren, 393 ; S. C., 1 Con. & L. 486; 1 Wh. & Tud. Lead. Cas. [3d Am. ed.] 84-97; 1 Platt’s Leas. 762 et seq.; Wood’s Landl. & Ten. 680.) The defendants were not relieved from their covenant to extend the plaintiffs’ term for four years because they obtained a new lease instead of a technical renewal of their old one.

The court found, and the fact was not disputed on the trial, that the plaintiffs did not, at least three months before the expiration of their lease, notify the defendants in writing that the plaintiffs elected to.continue their lease for four years. The defendants contend that the failure to serve this written notice bars the claim of the plaintiffs that their term was extended. When the time for serving this-notice arrived the defendants had not secured an extension of their lease, or a new lease, from the owner of the fee, and the renewal clause provides, that a notice would not extend the plaintiffs’ term unless the defendants’ should be extended. It was testified on the trial that' the plaintiffs talked with the defendants about an extension for four years in case they obtained an extension, and that, the defendants promised so to extend the term.

The trial court found as a fact, and I think upon sufficient evidence, that the defendants waived the service of this notice because the owner of the fee had not, when the time arrived for its service, granted them a new lease, and the term of the defendants was .consequently uncertain.' 6

It was competent for- the defendants to waive service of the written notice, orally or by acts. (Long v. Stafford, 103 N. Y. 274.

The judgment should be affirmed, with costs.

All concurred.

Judgment affirmed, with costs.  