Merchant v. Rawson

The Vice Chancellor.

The counsel for the complainant contended that the clause in the lease in relation to the antecedent agreement, had the effect to incorporate the agreement with, and to make it a part and substance of, the lease. It was doubtless prudent, as all the covenants in the agreement had not been performed, to insert this clause in the lease, as evidence that the performance of the unfinished work was not waived or abandoned. As the lease was dated in February, it is probable that the building itself was not at that time completed so far as it was agreed to be before the lease was to be executed ; and if such was the case, the tenant might well fear that an acceptance of the lease would waive his right to enforce the completion of the building according to the agreement. At least, it was a prudent clause in the lease ; and its insertion only shews that the parties intended, on either side, to insist upon the performance of the agreement according to its conditions. In the view of the case which I take, it is entirely immaterial whether the antecedent agreement was incorporated into, and made part of, the lease by this clause, or not. The case must turn upon the construction to be given to the agreement, in either event. It is likewise immaterial whether this side-walk cellar was of little or considerable value to the complainant. It is sufficient that he stipulated to have it done, and that the defendant Rawson covenanted to do it; and it is certainly no protection to the defendants to say that its completion was of little or no value to the complainant. The case, as I remarked before, must turn upon the construction given to the agreement; and it involves a consideration of that much discussed question, what contracts are independent, and what dependent. Modem decisions have discarded the niceness and technicality with which some old cases would trammel such questions. There has been brought to the decision of modern cases, a degree of common sense which has enabled the courts to lay down some clear and general rules for the construction of covenants of this character. I do not propose to repeat, but rather to apply them. They may, however, be found clearly stated by Chief Justice Savage, in Tompkins vs. Elliott, 5 Wendell Rep. 496. The great-cardinal rule is to construe covenants according to the meaning of the parties and the good sense'of the case.

In this case, Rawson covenanted to erect a building-, and the complainant covenanted to rent it of him for a certain time. Rawson’s covenant comprises a great variety of details : he was to have the building in a certain state of forwardness by the 1 st of May, 1837, when the complainant was to take his lease and enter into possession. Rawson was to do certain other things in the summer of 1837; and he was to build the side-walk cellar under Cottage-street, before the 8th of June, 1838. In point of time there were some things to be done by Rawson, then other things to he done by the complainant, then other things to be done by Rawson. We are to assume that all these things were done in the order, at the time, and in the manner required by the terms of the contract, except the construction of the side-walk cellar. The complainant, by taking his lease and entering into possession, admits that, the contract was fulfilled up to that time. Is there any thing in this case to lead us to the belief that it was the intention of the parties, in making the contract or the lease either, that the payment of the rent accruing under the lease after the 8th of June, 1838, was to depend upon the completion of the side-walk cellar? For, at this point of time, this is the only dependence there can be between the covenants of either of these instruments. Is there any thing in the case to lead us to the belief that it was the intention of the parties, in executing either instrument, to make the co.mpletion of the side-walk cellar a condition precedent tó the payment of rent accruing’ under the lease after •8th of June, 1838 ? The good sense of the case will lead any one, upon a moment’s reflection, to a different conclusion.8 The complainant, by taking’ the lease, fulfilled the contract wholly on his part; and it is absurd to say that an act to be done after that, is a condition precedent to a thing already performed. The parties evidently, at the time of making the contract, considered that it would be substantially performed upon the erection and completion of the building, so far as it was provided to be done by 1st May, and the mutual "'execution of the lease Rand that as to the work thereafter to beydone, the complainant relied upon Rawson’s covenant, and to that he must look. Besides, if the complainant’s view of the case as to the dependence of the covenants in the two instruments, is correct, it affords him an ample and complete defence at law, in the suit instituted upon the lease for the recovery of the rent; and he has no occasion to come into this court. Neither does Raw-son’s insolvency furnish any ground for relief to the complainant. The contract was entered into by the parties, at the reciprocal hazard of the insolvency of the other party. From the proofs in the case, I infer that Rawson would have suffered much more by the insolvency of the complainant, than the complainant can by the insolvency of Rawson; yet, this was a risk which Rawson incurred in erecting an expensive building, to secure the supposed advantages of a long and favorable lease. The complainant is therefore in an error in supposing that he can rescind and abandon the lease and contract under the circumstances in which he claims to do it.

The only remaining point to be considered is, whether the assignees actually accepted the surrender of the premises. I shall dismiss this with the single remark that, in my opinion, the proof does not substantiate the acceptance of the surrender. The complainant’s bill must be dismissed with costs to be taxed.