On appeal from a judgment of the First District Court of the city of Paterson.
For the appellants, Bernstein & Altschuler (Jacob L. Bernstein, of counsel).
For the respondent, Mortimer L. Mahler.
Before Justices Heher and Perskie.
The opinion of the court was delivered by
HEHER, J. By an indenture dated April 16th, 1931, plaintiff leased to defendants, for the retail merchandising of women's wearing apparel, store premises situate in the principal business district of the city of Paterson. The term was two years, to commence on May 1st next ensuing, with an option of renewal for the further period of three years; and the rent reserved was $2,100 for the first year, and $2,400 for the second year, payable in equal monthly installments in advance.
The state of the case settled by the District Court judge sets forth that defendants adduced evidence tending to show that, in the month of April, 1932, before the expiration of the first year of the term, they advised plaintiff that "it was absolutely impossible for them to pay any increase in rent; that their business had so fallen down that they had great difficulty in meeting the present rent of $175 per month; that if the plaintiff insisted upon the increase called for in the lease, they would be forced to remove from the premises or perhaps go out of business altogether;" and that plaintiff "agreed to allow them to remain under the same rental 'until business improved.'" While conceding that defendants informed him that "they could not pay the increase called for in the lease because of adverse business conditions," plaintiff, on the other hand, testified that he "agreed to accept the payment of $175 each month, on account." For eleven months of the second year of the term rent was paid by defendants, and accepted by plaintiff, at the rate of $175 per month. The option of renewal was not exercised; and defendants surrendered the premises at the expiration of the term, leaving the last month's rent unpaid. This action was brought to recover the unpaid balance of the rent reserved by the lease for the second year -- $25 per month for eleven months, and $200 for the last month.
The District Court judge found, as a fact, that "a subsequent oral agreement had been made to change and alter the terms of the written lease, with respect to the rent paid," but that it was not supported by "a lawful consideration," and therefore was wholly ineffective.
The insistence is that the current trade depression had disabled the lessees in respect of the payment of the full rent reserved, and a consideration sufficient to support the secondary agreement arose out of these special circumstances; and that, in any event, the execution of the substituted performance therein provided is a defense at law, notwithstanding the want of consideration. The principle invoked is applied in Long v. Hartwell, 34 N.J.L. 116; Halpern v. Shurken, 98 N.J. Eq. 28; Frank Wirth, Inc., v. Essex Amusement Corp., 115 N.J.L. 228. It is said also that, "in so far as the oral agreement has become executed as to the payments which had fallen due and had been paid and accepted in full as per the oral agreement," the remission of the balance of the rent is sustainable on the theory of gift, if not of accord and satisfaction -- citing McKenzie v. Harrison, 120 N.Y. 260; 24 N.E. Rep. 458; Evans v. Lincoln Co., 204 Pa. 448; 54 A. 321; Malis v. Campo, 25 Pa. Dist. 32; 43 A.L.R. 1458.
It is not suggested that the primary contract under consideration was of a class which may not lawfully be modified by parol, except to the extent that the substituted performance has been actually and fully executed and accepted; and we are not therefore called upon to consider that question. See Kerzner v. Chanin, 98 N.J.L. 38; Long v. Hartwell, supra; Troth v. Millville Bottle Works, 89 Id. 219; Headley v. Cavileer, 82 Id. 635; Wilkinson v. Plaket, 5 N.J. Mis. R. 853; affirmed, 104 N.J.L. 451; Halpern v. Shurkin, supra. The point made by respondent is that the subsequent oral agreement to reduce the rent is nudum pactum, and therefore created no binding obligation.
It is elementary that the subsequent agreement, to impose the obligation of a contract, must rest upon a new and independent consideration. The rule was laid down in very early times that even though a part of a matured liquidated debt or demand has been given and received in full satisfaction thereof, the creditor may yet recover the remainder. The payment of a part was ...