Pennsylvania Steel Co. v. New York City Ry. Co.

NOYES, Circuit Judge

(after stating the facts as above). An agreement to assume a debt is undoubtedly an agreement to pay it. A promise by a grantee under an absolute conveyance to assume a definite obligation of the grantor imports an unqualified undertaking to pay. There is no uncertainty as to the promisor’s interest or as to the extent of his obligation. So an undertaking by a lessee to pay an amount due upon a mortgage upon the leased property might be regarded as unconditional. Although' the leasehold estate would be subject to termination the possibility of that event might not affect the fixed obligation. Conversely a promise by an absolute grantee to meet a continuing charge upon the property might be unqualified. The obligation might run but the promisor’s interest would be fixed. Nothing could happen to render doubtful an intention to keep up the payments. But the present case is very different. The agreement of the City Company to assume the Metropolitan’s obligation to pay the bond interest' — including that in question— was an agreement to pay such interest but was indefinite as to how long it was to last. The intention of the parties was not clear. The language of the assumption provision taken by itself might — on the *515one hand — import an obligation to pay the interest regardless of any use by the lessee of the property upon which it was a charge. But it would not necessarily mean this. In view of the very nature of a lease, the language might import no more than a duty running during its existence. There was an obligation to pay. But for how long a time ? Resort must he had to the instrument as a whole.

In interpreling the instrument we must start out with the proposition stated by this court in the Metropolitan Stockholders’ Appeal, 198 Fed. 764, 117 C. C. A. 546, that “an intention to hold a lessee for future payments after it has ceased to use and enjoy the thing leased--in the nature of a forfeiture — must be made very plain to be found.” See, also, Lamson Consolidated Store Service Co. v. Bowland, 114 Fed. 639, 52 C. C. A. 335; Jesup v. Illinois Central R. Co. (C. C.) 43 Fed. 483; Garnsey v. Rogers, 47 N. Y. 233, 7 Am. Rep. 440. Is it then made very plain in this lease that the lessee is to pay this bond interest after it ceases to use the leased property? It is not so expressly provided and we think it cannot be implied. We find nothing in the different provisions showing that the parties contemplated any obligation continuing after thp termination of the lease. The implication from the provision that no entry should impair the lessor’s claims for payments due and unpaid, is rather the other way. The fact that the lessee did not assume the principal of the mortgage debts hut confined itself to running obligations seems also indicative of an intention merely to place the lessee in the lessor’s shoes so long as the lease should exist. Moreover no reasons appear — either within or without the lease — why either party should have wished to place a millstone about the lessee’s neck — as the briefs express it — for the benefit of bondholders who had nothing to do with the execution of the lease. Furthermore no special equities are shown ■ — as in some cases — in favor of these bondholders. It does not appear that they changed their position on account of the lease. Taking the lease as a whole we think that the failure to specify the duration of the lessee’s obligation upon the assumption provision, did not indicate an intention that it should go on forever; that the payments stipulated to be made constituted part of the consideration for the use of the demised property, and that the promise to make them was, in its essence, a rent covenant limited to the existence of the lease.

We give due consideration to the contention that if the assumption of the interest payments amounts only to an agreement to pay rental, it adds nothing to the preceding express agreement to pay all rentals. Regal instruments, however, often cover the same subject twice. Precaution invites repetition. The rule that different provisions of a contract should be given different meanings is never carried so far as to do violence to the plain intent of the parties. And if there he a difference between an agreement to pay moneys to become due under a lease and an agreement to assume the obligations under such lease, it does not necessarily follow that the one runs longer than the other. An ‘undertaking may not be a rent covenant in the strictest sense and yet terminate with the lease.

*516Holding, then, that the obligation to pay the interest coupons in question did not continue after the termination of the Metropolitan-City lease, we come to the inquiries: When did it terminate? What was unpaid when it terminated? The first coupon which was not paid fell due August 1, 1908, and it is practically conceded by all that the lease terminated not later than July 31, 1908. Consequently it must be held that no obligation against the City Company ever accrued. And this is not deciding the matter upon a technicality. Although there had been no formal action the lease was substantially terminated long before July 31st. Indeed we think that any idea that it would be continued was given up by all parties in interest even before February when the interest included in the August coupons began to run.

The order of the District Court is affirmed with costs.