Appeal from Trial Term, New York County.
Action by Louis Sherry against Arthur B. Proal. Judgment for plaintiff, and defendant appeals. Reversed.
See, also, 125 A.D. 508, 109 N.Y.Supp. 1008.
[116 N.Y.S. 235]
Martin W. Littleton (Frederick Allis, on the brief), for appellant.
Franklin Bien, for respondent.
Argued before PATTERSON, P. J., and INGRAHAM, CLARKE, HOUGHTON, and SCOTT, JJ.
The plaintiff sues and has recovered a judgment for one half year's rent, from October 1, 1906, of an apartment in an apartment hotel. Plaintiff had occupied the apartment for a number of years under a written lease, which had been renewed from year to year by written renewals; the last renewal expiring on October 1, 1906. In March of that year plaintiff and defendant had a conversation respecting the renewal of the lease, and after much discussion a tentative agreement was made for a new lease for five years at an increased rental. This lease was never executed, and plaintiff makes no claim under it. Plaintiff testifies that he prepared and signed duplicate copies of such a lease, and directed his bookkeeper to send them to defendant for signature. There is no evidence that they were ever delivered to defendant, or at his apartment or his office, and he denies that he ever received them. Soon after this conversation both parties went abroad, leaving the matter of a new lease undetermined. Defendant returned to New York in July, and then took up the matter of a new lease with one Flauraud, the manager for plaintiff who was still abroad.
The question at issue between the parties is a very narrow one, and arises out of this conversation between Flauraud and defendant; the former testifying that a definite and precise agreement was then made for a new lease for one year, and the latter testifying that he offered to take a lease for a year, but that Flauraud declared that he had no authority to make such a lease. Although the parties to this conversation differ as to its ultimate outcome, there is no reason to believe that either is consciously and willfully testifying falsely, but rather that they honestly differ in their recollections as to what was finally said. A jury has twice decided to accept Flauraud's statement, and we shall undertake the consideration of the case from the standpoint of the accuracy of his recollection. His statement of the conversation is as follows:
" Mr. Proal came in, and after passing the time of day, and asking about how he was, and so on, I asked Mr. Proal if he would send me the lease that Mr. Sherry had sent him for signature; that his lease had been signed by Mr. Sherry. I said for Mr. Proal to return the lease that Mr. Sherry had signed, to me, with his signature attached, in order to complete the leasing of the apartment. Mr. Proal said he had not received them. I told him that, if he looked in his apartment or at his office down town, he probably would find them. After a little more conversation on the matter, he said: ‘ Now, Flauraud, I don't like that lease. I want you to change that lease for me.’ ‘ Well,’ I said. ‘ what do you want me to change?’ ‘ Well,’ he said, ‘ I want you to make my lease the same as the old lease was; that is, I want the five years with the option of one at a time, at the same rental as the first year-that is, $14,000.’ I said to Mr. Proal: ‘ Don't ask me to do a thing of that kind. You talked that matter over with Mr. Sherry, and it has all been settled, and you know Mr. Sherry does not want to give any options at all. Now,’ I said, ‘ I will do anything for you, but I can't do that.’ So, after a little while, further talk and conversation, he said: ‘ Well, give me a one year's lease,’ says [116 N.Y.S. 236] he, ‘ send me down the lease.’ I says: ‘ No; it is not necessary. You have got those. Just strike it out, and put one year, instead of five.’ That was all that was said."
It is apparent from this statement of the conversation, accepting it as accurate, that both Flauraud and Proal expected and intended that the oral agreement then arrived at should subsequently be embodied in a formal written lease. The plaintiff recognizes this, and places his right to a recovery squarely upon the rule, which is well established and often enforced, that in a case wherein, under the statute of frauds, a tenancy can lawfully be created by parol, and the parties have orally agreed upon all the terms, nothing being left to be done except to put them in writing, the letting will be deemed to be complete, although the stipulated written lease should never be executed. This well-recognized rule is, however, to be applied with caution, and is never applied unless it clearly appears that every material term of the contract was in fact agreed to, and that nothing remained for future negotiations and agreement. So we find in a great majority of the cases in which the rule has been applied that the meeting of the minds has been evidenced by letters or other writings, which have shown beyond dispute just what was agreed to. Sanders v. Pottlitzer Bros. Fruit Co., 144 N.Y. 209, 39 N.E. 75,29 L.R.A. 431,43 Am.St.Rep. 757; Peirce v. Cornell, 117 A.D. 66, 102 N.Y.Supp. 102.Where the question is, as in the present case, one of intent, it has always been recognized that the circumstance that the parties intended to have a written formal agreement is strong evidence that the oral agreement was not understood or intended to be binding. Bryant v. Ondrak, 87 Hun, 477, 34 N.Y.Supp. 384, citing Brown v. N.Y. C. & H. R. R. Co., 44 N.Y. 79; Franke v. Hewitt, 56 A.D. 497, 68 N.Y.Supp. 968.
In Arnold v. Rothschild's Sons Co., 37 A.D. 564, 56 N.Y.Supp. 161, affirmed 164 N.Y. 562, 58 N.E. 1085, the parties had negotiated through a broker for the lease of certain premises. These negotiations had resulted in a note from the broker to defendants saying:
" I have closed the lease for you as directed with Mr. Arnold of store and bas. 742 Broadway for one year from February 1st, 1902, at $5,000 rental payable monthly."
To which defendants had ...