
    Michel v. O’Brien.
    (Supreme Court—Erie Special Term,
    January, 1894.)
    Plaintiff executed a lease of certain premises to defendant at a certain rental, payable monthly in advance, which also provided that if defendant, without written consent of the plaintiff, should underlet or assign •the premises, or should use the premises or any part thereof in an unusual, improper or wasteful manner, or for any other purpose than for a saloon and dwelling of reputable and orderly character, plaintiff should have the right, at her election, to terminate the lease on three days’ notice, and also to recover six months’ rent as liquidated damages. Defendant occupied the first floor as a saloon, rented the sec&nd floor to plaintiff, and the third floor to parties for halls and dances. Plaintiff Served the notice prescribed by the lease, but thereafter accepted payment of the rent for the following month, and subsequently brought this action and obtained an injunction restraining such use of the third floor, which the defendant disregarded. It was shown that the use of the third floor for dances had injured the building, and that the defendant was insolvent, but it did not appear-whether his surety was responsible or not. On motion to dissolve the injunction, held, that "the forfeiture was waived by the payment and acceptance of the subsequent rent, and that the right to recover the stipulated damages fell with it; that compensation in damages for the injury would not be adequate, and that plaintiff was entitled to.the injunction.
    Upon an application to dissolve an injunction, the court may consider the fact that the injunction has been violated, although the defendant may not have been put in contempt by direct proceedings for that purpose.
    Motion to dissolve an injunction granted against the defendant from using certain premises for public dances, halls, etc.
    
      Edward F. Coatsworth, for plaintiff.
    
      John R. Hazel, for defendant.
   Ward, J.

On the 2d of February, 1893, the plaintiff was the owner and still is the owner of a three-story brick building on the corner of Alabama and Elk streets in the city of Buffalo ; at that date the parties to this action entered into a lease in writing whereby the plaintiff leased to the defendant the building for the term of two years, to commence the 1st of May, 1893, with the privilege to the defendant of renewing the lease for three years longer. For the first two years the defendant was to pay a rental of $600 in monthly payments of fifty dollars each, payable on the first day of each month in advance, after that the rental not to exceed over sixty dollars per month, and among other provisions it was covenanted that if the defendant should, without the written consent of the plaintiff, underlet or assign over the premises or any part thereof for the whole or any' part of the term, or should use the premises or any part thereof in an unusual, improper or wasteful manner, “ or for any other purpose than for a saloon and dwelling of reputable and orderly character, or should violate any other covenant or agreement contained in this lease, then in either case ” the plaintiff should have the right at her election to terminate the lease on first giving to the defendant three days’ notice of such election, and if this was done the term should thereupon cease at the expiration of the said three days, the saíne as at the expiration of the original term of the lease, and such election should be in the discretion of the plaintiff, and when exercised should be conclusive upon the defendant. And in case the defendant should violate the covenant not to underlet or assign, or to use the premises only for.the purposes for which they Avere rented, then the plaintiff, in addition, to terminating- the lease by such notice, “ may also recover damages for the violation of said covenants, or either of them, "a sum equal to the amount of six months’ rent of the premises as stipulated in liquidated damages and not as a penalty.”

The defendant entered into the possession of the premises under this lease, except the second iloor of the building, Avhich he leased to the plaintiff. He occupied the first floor for a saloon, and the third floor the defendant permitted to be used for public dances, balls and parties, and rented the same for that purpose, and alloAved others to use’the same for such dances.

This occupation of the third floor the plaintiff claims was a violation by the defendant of the covenant of the lease, Avas injurious to the building and greatly to the discomfort and annoyance of the plaintiff, who occupied the second floor as a residence; that the defendant threatened to continue the uso of such third floor for the purposes of a dance hall, and was to allow the third floor to he used for that purpose by the “ Oxford Social Club ” to hold a public dance therein on the evening of December 20, 1893. The injunction was granted on the 20th of December, 1893, and served about six o’clock in the evening upon the defendant personally. The injunction restrained the defendant, his seiwants, agents, etc.,.from holding public dances, balls and socials on the premises, or using them for any other purpose than a saloon and dwelling of a reputable and orderly character. The defendant disregarded the injunction, and the “ Oxford Social Club ” held their dance on the third floor of the building on the evening and night of December 20,1893.

On the 23d of Hovember, 1893, the plaintiff caused a notice, in writing, to be served upon the defendant that, three days from the expiration of that time, she should consider the defendant in possession of the premises without legal right, and should commence legal proceedings to oust him from possession if he did not vacate the premises, and that she elected to terminate, and did terminate, the lease for several reasons therein stated, among which was that he had underlet a part of the said premises without her consent, and was using, or causing to be used, the premises in violation of the terms of the said lease. The defendant, notwithstanding the service of the notice, still remained in possession of the first and third stories of the said premises, continuing his business as usual, and on the 1st day of December, 1893, by the terms of the lease, there was one month rent due the plaintiff from the defendant for the month of December. The defendant voluntarily paid snch rent to the plaintiff, and she accepted it without objection, and afterwards this action was commenced and the injunction obtained. The affidavits tend to strongly show that the defendant is insolvent.

One William Hurley, however, executed the lease as surety for the performance by the defendant of his covenants. It does not appear whether Hurley is responsible or not. Tile affidavits also seem to .establish that the use of the third story as a dance hall had injured the building; that the floor had sagged; that it was not safe to continue the use of the hall for that purpose, and if the defendant was not restrained the plaintiff would suffer .irreparable injury.

The learned counsel for the defendant claims that the injunction should be vacated : First, because the defendant having elected to terminate the lease by notice it was terminated, and the only remedy for the plaintiff was to recover damages; and, secondly, the lease itself provided for the recovery of damages which was liquidated therein in case of a breach by the defendant of any of its covenants, and that her sole remedy was to recover such damages. The first position is clearly untenable because the forfeiture was waived by the payment by the defendant without objection and the voluntary receipt by the plaintiff of the rent due December first. The lease was thereby reinstated in full force and effect, and the case stands precisely as if no notice had been served. Collins v. Hasbrouck, 56 N. Y. 164, 166; Murray v. Harway, Id. 337; Conger v. Duryee, 90 id. 600; McIntosh v. Rector, etc., 120 id. 12.

As to the second objection, it will be observed that, by the terms of the lease above given, the right of the plaintiff to recover the stipulated damages is connected with and made dependent upon the forfeiture to be declared by the plaintiff for a violation on the part of the defendant of his covenant.

It may be said that this is a strict construction of the lease. Assuming this is so, a strict construction is authorized where the provisions of a contract or lease provide for liquidated damages, as they are in the nature of a penalty. But I think the construction thus given is the proper and natural one from the language used.

Now, if the forfeiture is waived by the payment of rent after it occurred, the forfeiture falls and the right to recover the stipulated damages falls with it, and we may treat this action, for the purposes of this motion, as though the questions of forfeiture and liquidated damages were eliminated from it. The question then remains, whether the plaintiff is entitled to the equitable interposition of the court restraining the defendant as in the injunction provided.

“ Where a lessee covenants in a lease executed by; him for a particular use of the demised premises, equity will restrict him to that use by injunction.” Dodge, as Receiver, v. Lambert, 2 Bosw. 570; Steward v. Winters, 4 Sandf. Ch. 587, 588; The Barrington Apartment Association v. Watson, 38 Hun, 545; High Inj. § 691.

In so fan as this motion appeals to the favor of the court it should not be granted, because the defendant is in contempt for violating the injunction in permitting the use of the third story for public dancing after the injunction was served. Williamson v. Field, 2 Barb. Ch. 281; Krom v. Hogan, 4 How. Pr. 225 ; Johnson and Others v. Pinney, 1 Paige Ch. 646; Evans v. Van Hall, Clarke Ch. 22, 24, 25; Field v. Chapman, 13 Abb. Pr. 320, 330, 331.

The affidavit clearly discloses this violation of the injunction, and the court may consider that fact upon this application to dissolve, although the defendant may not have been formally put in contempt by a direct proceeding for that purpose. The suggestion of Harris, J., in Smith v. Reno, 6 How. Pr. 124, that such a procedure is necessary, is not supported by authority, and see cases last above cited.

It is clear from the nature of the injury which the action is brought to redress that compensation in damages will not be adequate, and, therefore, the preventive action of a court of equity is necessary.

It is claimed in some of the defendant’s affidavits that it was the intention of the parties at the execution of the lease that the defendant should continue to use the third story for dancing as it had been theretofore used, and that if the lease expresses a 'contrary intention it was through mutual mistake of the parties. This is denied by the plaintiff, she, on the contrary, affirming that the lease was purposely so worded as to prevent in the future what it was apparent had been an injury to the premises in the past; we can only take the lease as we find it. Ho answer has been interposed in this action, and the question of a reformation of the lease is, therefore, not before us. If, upon the trial, the lease is reformed and the defendant’s contention in this regard is sustained, he can be protected in the final judgment. The preliminary injunction, however, must be sustained, and the motion to vacate the same is denied, without costs.

Let an order be entered accordingly.  