Under the terms of clause seventeenth of the lease made with the Department of Public Works in behalf of the State Division of Placement and Unemployment Insurance for certain premises at Ossining, for the use of that department of the State government, the lease was "executory only to the extent of the moneys available" for payment of the rental although the term of the lease was stated to be for three years from the 15th day of November, 1937. Although the landlord fully performed the provisions of the lease on its part to be performed and the department was in possession under the terms of the lease, notification was given by that department of its termination as of July 31, 1938.
It has been found that there were ample funds available in the hands of the Social Security Board, appropriated either by the State or Federal government, with which to pay the rental on this lease for the fiscal year commencing July 1, 1938. The same person who served that notice, in spite of the proposal of the Federal Social Security Board to continue the Ossining office, requested its discontinuance and on account of that request the Social Security Board failed to include in its budget for the period subsequent to July 31, 1938, the necessary allocation with which to satisfy the rent. The lower courts have construed the term "available" to refer only to the funds which might be allocated by the Social Security Board for the payment of the rent. We think that, as a matter of law, such construction is not permissible in view of the wording of the lease, applicable findings of fact in the lower court, the facts and circumstances surrounding the leasing, and the purpose of the Legislature and of Congress in making the appropriations for the fiscal year commencing July 1, 1938. What was meant and intended by the parties to the lease was that the lease should be executory in the event that there was inadequate legislative appropriation available.
The facts as found establish that the Social Security Board had the power to allocate the funds which were placed in its hands for the maintenance, among other things, of the *Page 280 Ossining office without the request, consent or approval of the State agency. Nevertheless, it acted upon the report of the State agency that that office was no longer necessary and, as a consequence, failed to allocate necessary funds for rental purposes. The contract must be construed in the light of fair dealings between the parties (Campbell v. State, 240 App. Div. 304,309; Patterson v. Meyerhofer, 204 N.Y. 96; Amies v. Wesnofske, 255 N.Y. 156). There was nothing in the facts and circumstances or in the findings of fact which established an obligation on the part of the State any different than would exist under similar facts between individuals. Concededly there were moneys available in the hands of the Federal Social Security Board by legislative and congressional appropriation for the payment of the rent. Those appropriations were made with the intent and purpose, among other things, of providing funds for carrying out the particular lease.
Applicable statutes and appropriation measures are referred to and fully discussed in the dissenting opinion of Mr. Justice HEFFERNAN in the court below and our decision here might well be based upon that opinion. In view of our construction of the lease and in the light of the applicable law, the conclusion of the Court of Claims "that no moneys were available for the payment of the rent reserved in said lease after July 31, 1938," is not sustained by the facts.
The judgment appealed from should be reversed and judgment should be directed in favor of the claimant for the relief demanded, with costs.
LEHMAN, Ch. J., LOUGHRAN and DESMOND, JJ., concur with LEWIS, J.; RIPPEY, J., dissents in opinion in which FINCH and CONWAY, JJ., concur.
Judgment affirmed. (See 286 N.Y. 696.) *Page 281