State v. Bermann

Supreme Court of New Jersey

Decided September 12, 1946

Supreme Court of New Jersey · decided 1946-09-12

Cited by 3 later decisions — most recently October 1964

3 state decisions

Good law ✅— No negative treatment on recordhow we know

Decided 1946-09-12

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Per Curiam.

¶1 The judgment under review will be affirmed, for the reasons expressed in the opinion filed in the Supreme Court.

¶2 For affirmance — The Chancellor, Chibe Justice, Parker, Bodine, Donges, Heher, Pbrskie, Colie, Oliphant, Waoiieneeld, Wells, Raeferty, Dill, Freund, McGeehan, McLean, JJ. 16.

¶3 For reversal — Hone.

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Case posture

Posture: On appeal from the Supreme Court, in which court the following opinion was filed: Application has been made to me in my capacity of Circuit Court Judge, sitting as a Supreme Court Commissioner, to strike the answer filed by the defendant, Hugo Bermann, in the above entitled cause on the ground that said answer filed to the amended complaint is sham, frivolous and filed solely for the purpose of delay. A brief review of the factual situations presented by the pleadings may not be amiss. In short the amended complaint alleges that the State of New Jersey, by the Board of Commerce and Navigation, entered into a written lease dated December 20th, 1926, with the defendant, Hugo Bermann, whereby the plaintiff leased to the defendant for a period of ten years from December 20th, 1926 (which term is disputed by defendant), at the annual rental of $727.45, certain lands under water adjoining lands owned by the defendant in fee, situate in the City of Jersey City, in the County of Hudson and State of New Jersey, together with an option in favor of the defendant to purchase at any time within the period of the lease said riparian rights upon the payment of a principal sum, being the capitalization of the yearly rental of $727.45 at seven per cent. or the sum of $10,392.10. Prior to the execution of the lease in question the defendant, under date of April 23d 1926, submitted to the Board of Commerce and Navigation the customary application of riparian owner for a lease of the premises in question for a period of ten years with an option to purchase as aforesaid. The lease was duly executed and the defendant went into possession and paid the stipulated rentals until June 20th, 1935, the due date of the semi-annual payment then due. The lease having expired, according to plaintiff's interpretation, by its own limitation on December 20th, 1936, and the rentals reserved therein not having been paid from June 20th, 1935, to December 20th, 1936, the Board of Commerce and Navigation requested the Attorney-General to take such action as might be necessary to collect from the defendant the rental arrearages, together with interest thereon. Hence the present suit. I have had the benefit of oral argument and memoranda submitted by counsel for the respective parties and the same have been of substantial assistance to the court. Resolving the situation into its simple essentials, the question presented for determination is whether the term created by the lease runs for a period of ten years from December 20th, 1926, as contended by the plaintiff, or whether the term ceased on June 21st, 1935, as contended by the defendant. The matter is, therefore, solely a question of law involving the construction of a written instrument. The second paragraph of the lease has this to say inter alia: `AND WHEREAS, the said Board of Commerce and Navigation, * * *, having due regard to the interests of navigation and the interests of the State, have agreed to lease the lands hereinafter mentioned upon the terms herein set forth and have determined the sum of Seven hundred and twenty-seven and 45/100 ($727.45) dollars to be the annual rental to be paid for said lands under water so designated, subject as hereinafter stated, from the day of the date hereof, for and during and until the full end and term of ten (10) years, except as otherwise provided.' The third paragraph contains the following language: `NOW THEREFORE, the said State of New Jersey, by the said Board of Commerce and Navigation, the Governor approving, in consideration of the premises and of the rents, covenants and conditions herein contained, does hereby demise, lease and to farm let unto the said Hugo Bermann, and to his heirs and assigns, until default is made in the punctual payment of the annual rentals herein fixed, or until this instrument and all estate or rights arising thereunder has been declared forfeited by said Board of Commerce and Navigation or their successors in office, for breach of any of the covenants or conditions herein contained, or until the same has been in any other manner forfeited or terminated.' The so-called habendum clause reads as follows inter alia: `TO TAKE, HAVE, HOLD, use, exercise and enjoy, as lessee for the term aforesaid, the said lands and premises, and all the rights and privileges aforesaid, exercisable within and over, or with reference to the same, to and for the said several uses, intents and purposes, and in the manner and form that they are above leased unto the said Hugo Bermann, and to his heirs and assigns. * * *' The next to the last paragraph of the lease contains a reversionary clause in favor of the State of New Jersey without entry or re-entry upon the expiration of the aforementioned ten years `herein fixed as the duration of this lease, or at any previous time by reason of the non-payment of rentals as herein provided, * * *' In opposition to the contention of the plaintiff that the lease did not expire upon the default in payment of rental due on June 20th, 1935, and that the term continued for the full ten year period, the defendant has presented the ingenious argument that non-payment of the rental due on June 20th, 1935, in itself caused a termination of the lease with no further liability on the part of defendant lessee to pay further rentals. In support of this contention the defendant points to the words contained in the third paragraph of the lease above set forth and reading as follows: `* * * until default is made in the punctual payment of the annual rentals herein fixed. * * *.' With this contention I cannot agree. In my opinion a fair reading of all parts of the lease as a whole discloses that the true intention of the parties was that the State of New Jersey would grant and that Hugo Bermann was to receive a ten year lease and that the clause pertaining to default in the payment of rentals was not to operate per se as a termination of the lease unless the state so elected. The defendant argues that the habendum clause must control and that the term therein created is such as would continue for the period during which the annual rentals were punctually paid and ceased upon default. As previously stated, I feel that it is not the true intent of the lease in question that the rights and liabilities of the several parties be controlled solely by the formal words contained in the so-called habendum clause. The lease as finally executed represents the intent of the parties and when the same is ambiguous and in dispute the court may have recourse to extraneous facts and circumstances for the purpose of arriving at the true intent of the parties. There is no doubt but that Hugo Bermann desired a ten year riparian lease. This is clearly evident from his application to the Board of Commerce and Navigation under date of April 23d 1926. Furthermore the second paragraph of the lease specifically mentions the term of ten years. The period of ten years is referred to in the paragraph relating to the making of any renewal of the lease, except at such valuation and terms as may be fixed by the said Board of Commerce and Navigation. The paragraph relating to the option to purchase also specifically mentions a period of ten years as does the reversionary clause in favor of the State of New Jersey upon non-payment of rentals. Although the so-called habendum clause does not specifically mention a term of ten years, I have no doubt but that the words therein `for the term aforesaid' distinctly refers to the ten year period. Vice-Chancellor Jayne in the recent case of Trenton Potteries Co. v. Blackwell , 137 N.J. Eq. 113 ; 43 Atl. Rep. (2 d ) 831, decided September 5th, 1945, has expressed the modern view of construction of the habendum clause in the following apt words: `I am constrained to state that the rule declaring that an habendum clause creating an estate contradictory or repugnant to that described in a conventional granting clause must be rejected, has lost much of its prestige and patronage in recent years. While it continues to be regarded, inter alia , as a rule of construction, it is not respected as a strict rule by which the transmission of estates in property must be governed. `In modern times, deeds are customarily prepared with the use of forms on which the stereotyped passages have been printed. The natural consequence is the common practice of inserting qualifications, reservations, and restrictions at some convenient and available open space on the stationery. Therefore, I do not hesitate to venture the opinion that the dialectic process that regarded the granting clause, the habendum and tenendum as entirely separate and independent portions of the same instrument, each possessing exclusively its special functions, is no longer pragmatical. See 26 C.J. 429-432 , §§ 128, 129; 16 Am. Jur. 570 , § 237; Martindale on Conveyancing (2 d ed. ), § 121; Jones on Real Property, in Conveyancing , § 627. In branches of jurisprudence, experience has caused many technical rules to be supplanted by prescripts more realistic and practicable. `It is not of the nature of courts of equity to nourish the force of outworn formulas. The efficient and equitable process of inquiry to-day is to scrutinize the whole instrument in quest of the true intentions of the parties rather than to attribute predominant significance to some formal division of the document.' Applying the rule of Trenton Potteries Co. v. Blackwell to the instant case, it is evident that the strict words of the habendum clause contained in the lease before me must be read in conjunction with all other parts of the lease and that such a reading clearly discloses an intention to create a lease for a period of ten years from December 20th, 1926. The contention of the defendant that the words `until default is made in the punctual payment of the annual rentals herein fixed' operate so as to render void and terminated the lease upon non-payment of rent is untenable. The cases are consistent to the effect that the non-payment of rent as voiding a lease in a situation which can only be availed of at the election of the lessor. Mr. Justice Reed in the case of Smith v. Miller et al. , [ Supreme Court , 1887], 49 N.J.L. 521 ; 13 Atl. Rep. 39 , stated the rule to be as follows: `The rule is that the lessor has the right to take advantage of the forfeiture, but it is entirely optional with him whether he avails himself of his privilege, although by the terms of the proviso the term is to cease or become void for the nonperformance of the covenants; and if the lessor does not avail himself of it, the term will continue, for the lessee cannot elect that it shall cease or be void.' And further: `The rule seems firmly established in the English courts, and it may be generally considered well settled that however absolute the words of forfeiture may be, they will be construed as having no other object than that of enabling the party in whose favor they are made to treat the lease as void, or to enforce it, as he desires. * * * The claim, therefore, that at the time of bringing this action the lease had ceased to exist by reason of the default in payment of rent, cannot be admitted.' A glance at the lease in question will disclose that the situation here is exactly the same as was sought to be availed of by the defendant in Smith v. Miller et al., supra. In deciding a similar question Chief Justice Beasley in Creveling v. West End Iron Co. [ Supreme Court , 1888], 51 N.J.L. 34 ; 16 Atl. Rep. 184 , summarized the rule to be as follows, that a condition in a lease that upon neglect of the lessee to pay the rent, or any failure to perform on his part, the lease shall cease and determine does not render the lease absolutely void upon default in performing the condition, but voidable at the election of the lessor. If he elects to waive the forfeiture, the lessee is bound, as though there were no breach of condition. In. Williams v. Beach Pirates Chemical Engine Co. [ Supreme Court , 1906], 73 N.J.L. 446 ; 63 Atl. Rep. 990 , the rule as expressed by Mr. Justice Pitney is to the effect that conditions rendering a demise void for breach of covenants by the lessee will work an avoidance only the election of the lessor. In view of the many references to a term of ten years expressed in the lease under consideration, I am convinced that the defendant has not substantiated by sufficient proof his contention that the term expired immediately upon his default in payment of rent. Where a term is demised in clear and apt words, it can only be defeated by words as strong and express as those by which it is created. See Vanatta v. Brewer , 32 N.J. Eq. 268 , opinion by Vice-Chancellor Van Fleet. It is likewise my conclusion that the defendant could not avail himself of a forfeiture of the lease so as to escape liability by simply failing to pay the rentals when due and I find nothing in the evidence before me to indicate that the plaintiff elected to consider the lease terminated upon the defendant's failure to pay the rental due on June 20th, 1935. In view of the foregoing the defendant's answer is insufficient and the same will be struck. Counsel may present an appropriate rule in accordance with the foregoing conclusions.

Source: CourtListener

Court

Supreme Court of New Jersey

Parallel citations

48 A.2d 893