Loughran v. Ross.

218; Holth. Law Dic. 261; 2 Bouv. 3, 4; 17 Abb. 360; 10 Bosw. 537; 1 Daly, 325; 7 Barb. 263; 35 id. 58; 41 id. 231.

ALLEN, J. It is not claimed by the defendant that the tenants Occupying the premises for the terms ending on the 1st of May, 1865, having erected the buildings during their tenancy, might not, during the continuance of their terms and their occupancy under the first leases, have removed the buildings; and the plaintiff does not deny, that after the expiration of the terms, and the tenants had ceased to occupy as tenants, their right to remove the buildings would have been lost; that a surrender of the premises would have been an abandonment of the claim to the buildings, and they would have become the property of the landlord as a part of the realty. The material question in this case is, as to the effect of the second letting and occupation under it, after the expiration of the first leases, upon the rights of the tenants and the ownership of the buildings. The rule is, that whatever fixtures the tenant has a right to remove must be removed before his term expires, except when the time at which the term will end is uncertain, depending upon a contingency, and it may be determined unexpectedly to the tenant, in which case he may be entitled to a reasonable time for removing fixtures after the expiration of the tenancy. Ellis v. Paige, 1 Pick. 43; Reynolds v. Shuler, 5 Cow. 323. The rule may be subject to the further qualification, that the right to remove the fixtures is not lost to the tenant so long as his possession as tenant continues; and the claim of the plaintiff is, that this qualification includes and saves the right of a tenant continuing in possession under a new lease. The right of the tenant to remove is a privilege conceded to him for reasons of public policy, and may be waived by him, and will be regarded as abandoned by any acts inconsistent with a claim to the buildings as distinct from the land, and upon abandonment of the right by the tenant, fixtures erected by him immediately become the property of the landlord as a part of the land. A surrender of the premises, after the expiration of the lease, is such an abandonment as vests the title in the landlord In reason and principle the acceptance of a lease of the premises, including the buildings, without any reservation of right, or mention of any claim to the buildings and fixtures, and occupation under the new letting, are equivalent to a surrender of the possession to the landlord at the expiration of the first term. The tenant is in

Loughran v. Ross.

under a new tenancy, and not under the old; and the rights which existed under the former tenancy, and which were not claimed or exercised, are abandoned as effectually as if the tenant had actually removed from the premises, and after an interval of time, shorter or longer, had taken another lease and returned to the premises. A lease of lands and premises carries with it the buildings and fixtures on the premises, and the tenant, accepting a lease of the premises without excepting the buildings, takes a lease of the lands with the buildings and fixtures, and acknowledges the title of the landlord to both, and is estopped from controverting it. In respect to the lot of which there was a written lease for the new term, the tenant expressly covenanted to surrender the premises at the end of the term, “in as good state and condition as a reasonable use and wear thereof will permit, damages by the elements excepted;" and this covenant relates to and includes the buildings then on the premises, and, if they are excluded from its operation, it can have no effect. It follows that the tenant becoming a party to that lease, and occupying under it, is estopped from claiming the buildings as his own, for he has covenanted to surrender them, as a part of the premises and included within the general description, to the landlord at the end of the term, in good repair. Such is also the implied undertaking of the tenant taking a new lease by parol Elementary writers are very well agreed, that when a tenant continues in possession under a new lease or agreement, his right to remove fixtures is determined, and he is in the same situation as if the landlord, being seized of the land with the fixtures, had demised both to him. Tayl. L. & T. 91; Gib. Law of Fixt. 42; and Grady's Law of Fixt. 98. And it would seem that the position is warranted by authority. When the tenant continues in possession after ejectment brought by the landlord, under an arrangement with him, and with his assent to a stay of execution, the tenant's right to remove buildings from the premises, erected by himself during his lease, is gone. Fitzherbert v. Shaw, 1 H. Black. 258. The court held, that there was an implied agreement that the tenant should deliver up the premises in the same condition as they were in when the agreement was made. The same was held in Heap v. Barton, 12 C. B. 274, JERVIS, C. J., saying: "If the tenants meant to avail themselves of their continuance in possession tc remove the fixtures, they should have said so." The general form of expressing the right of the tenant to remove fixtures is, that

Loughran v. Ross.

they must be removed within the term; that is, the term during which they were erected, and unless the lessee uses, during the lease, the privilege to sever them, he cannot afterward do it. Lee v. Risdon, 7 Taunt. 188; Lynde v. Russell, 1 B. & A. 394. But it may be done so long as the possession continues, although the term may have ended, if there has been no new agreement. Penton v. Robart, 2 East, 88. A case somewhat analogous in principle to this was that of Thresher v. Proprietors of the East London Waterworks, 2 B. & C. 608, in which it was decided that a lessee, who had erected fixtures, for the purposes of trade, upon the demised premises, and afterward took a new lease, to commence at the expiration of the former one, which new lease contained a covenant to repair, was bound to repair, those fixtures, unless strong circumstances existed to show that they were not intended to pass under the general words of the second demise, and a doubt was expressed whether any circumstances, dehors the deed, could be alleged to show that they were not intended to pass.

ALDERSON, B., in Weeton v. Woodcock, 7 Mees. & Wels. 14, says: "The rule to be collected from the several cases decided seems to be this, that the tenant's right to remove fixtures continues during his original term, and during such further period of possession by him, as he holds the premises under a right still to consider himself a tenant," and the right to remove the fixtures was denied to the assignees of the tenant, although they retained the possession, the plaintiff having made an entry to enforce a forfeiture. See, also, Minshall v. Lloyd, 2 Mees. & Wels. 450; Shephard v. Spaulding, 4 Metc. 416. The tenants, holding under a new demise, had not the legal right to remove the fixtures put by them on the premises during a former term, there being no mention of the right in the second lease. The offer to prove, that, by custom in the city of New York, tenants had a right to remove buildings, did not go beyond the right conceded by the defendant. The evidence, therefore, if otherwise competent, could not have aided the plaintiff.

The difficulty is, that the conceded right was abandoned and lost by its non-exercise during the tenancy under which the buildings were erected. The remedy of the plaintiff was against the persons wrongfully removing the buildings, and not on the defendant's covenant. The judgment should be affirmed.

CHURCH, Ch. J., FOLGER and ANDREWS, JJ., concur; GROVER and PECKHAM, JJ., dissent. Judgment affirmed.

Manhattan Brass and Manufacturing Co. v. Sears.

MANHATTAN BRASS AND MANUFACTURING Co., appellant, v. SEARS et al.

An agreement to share in the losses as well as the profits of the business is not necessary to constitute a partnership as to third persons; an agreement to share in the profits alone is sufficient.

ACTION by the Manhattan Brass and Manufacturing Company against Sears and Judson, to recover rent of premises leased by plaintiff to the "Judson Horse-shoe Company." The lease was signed by defendant Judson, "President." On the 22d of June, 1866. Judson, being the owner of a patent right, entered into an agreement with Sears to sell, and did sell, one undivided quarter interest "for the loan of $4,000 in cash, for the purposes of the patent and at the risk of its success, and the sum of $15,000 purchase-money." The agreement then proceeds as follows:

“ The said $4,000 loan is to be paid at any time within one year, to be used for the benefit of the patent and returned out of the first profits of the business, after paying the salary of the agent and other necessary expenses. The said $15,000 purchase-money is to be paid as follows, viz.: To be realized and retained by the said Frederick Judson out of Herman B. Sears' share in the profits arising from the sale of rights under the patent, and one-half of all dividends payable to the said Herman B. Sears are to be retained by said Frederick Judson until they amount to said $15,000. The said Frederick Judson is to continue to be the sole agent of the whole of said patent right, at a salary of $1,500 a year, payable only from the profits of the whole of said patent right, subject to an increase hereafter to be agreed upon, whenever the said $15,000 shall be realized, and the profits of the business shall authorize it. The object of this agreement is not for any purpose of business, or manufacture, or partnership, but only to make the parties joint owners of said patent right. The said Frederick Judson is to transact all business, and makes all grants in his own name, and to keep books of account showing all moneys received and expended in said matters, which are to be always open to the inspection of either of the parties to this contract.

"FREDERICK JUDSON, "HERMAN B. SEARS."

VOL. VI.-23

Manhattan Brass and Manufacturing Co. v. Sears

The premises, for the rental of which this action is brought, were hired by Judson in October, 1866, and were used for the introduction and sale of patent rights. Evidence was adduced to show that a portion of the rent had been paid by a draft on defendant Sears, drawn by defendant Judson in favor of plaintiff, out of the $4,000 loan, and that Sears knew that it was to go toward paying the rent. Evidence was also introduced to show that Sears had told plaintiff's president, before the premises were hired, that he owned a quarter interest in the patent held by the Judson Horseshoe Company. Sears alone defended; and, on his motion, the complaint was dismissed. Judgment of dismissal was affirmed at general term, whereupon an appeal was taken to this court.

S. B. Brownell, for the appellant, cited Col. on Part., § 3; 3 Kent (5th ed.), 24; Story on Part., §§ 2, 34, 35, 59, 60, 68; Ex parte Langdale, 18 Ves. 300; Wood v. Valette, 7 Ohio St. 192; Hazard v. Hazard, 1 Story, 371; Waugh v. Carver, 2 H. Black. 247; Gray v. Smith, 2 Wm. Black. 998; Ex parte Hamper, 17 Ves. 403; Champion v. Bostwick, 18 Wend. 175; Catskill Bank v. Gray, 14 Barb. 471.

Charles E. Whitehead, for respondent, cited Parkhurst v. Kinsman, 1 Blatch. 488; Pitts v. Hall, 3 id. 201.

PECKHAM, J. To constitute one a partner, as to third persons, it is not necessary that he should agree to share in the losses of the business. Sharing in the profits is sufficient. The reason is, that sharing in the profits deprives creditors of part of the means of payment. Polt v. Eyton, 3 Man. Gr. & S. 32; 54 C. L. R. 31; Col. on Part. (4th Am. ed.) 5, and cases cited; Story on Part. (Gray's ed.), § 2, where definitions of partnership are given by different writers. More generally no allusion is made to sharing losses. And see section 68; 3 Kent (8th ed.), 26; Grace v. Smith, 2 W. Black. 998. Here seem to be all the elements of a partnership, as claimed by any writer:

1st. Sharing in the profits.

2d. Sharing in the losses, at least, to the extent of $4,000, the repayment of the whole of which depended upon the profits.

3d. The right to inspect the books. Story on Part., § 69, note 1. 4th. A common interest in the stock of the company. 3 Kent, 24. It is not the less a partnership, that Judson was "to transact all