On appeal from the Supreme Court (Essex Circuit).
For the plaintiffs-appellants, Abe Press (Samuel Press, of counsel).
For the defendant-respondent Harry Torp, Herbert H. Meyer (Walter P. Reilly, of counsel).
For the defendant-respondent Middlesex Transporation Company, Kenneth Perry (John E. Toolan, of counsel).
The opinion of the court was delivered by
WELLS, J. This is an appeal from a judgment entered upon a verdict directed in favor of both defendants against the plaintiffs and from the refusal of the court to direct a verdict in favor of the plaintiffs against one of the defendants, Harry Torp, trading as Torp's Express.
The suit was for rent due under a lease and the renewals thereof covering a period of some six years.
The facts, as found from a record replete with numerous objections, none of which, however, were made grounds for appeal, present no contradiction as to what actually took place but only a problem as to the legal effects to be attached thereto.
On August 5th, 1929, one of the plaintiffs, Vittoria Peterpaul, was the owner of a garage located at 99 Pennington street, Newark, New Jersey. Her husband, the other plaintiff, Antonio Peterpaul, was her agent in charge of this particular property. On the day above mentioned these plaintiffs executed a lease for the premises with both of the defendants Harry Torp, trading as Torp's Express and the Middlesex Transportation Company. The lease was to run for one year with rent at $100 a month and with the option of renewal for an additional year. The lease also provided that a three months' notice should be given by the tenants to the landlords of their intention to terminate the lease at the end of the first year or to exercise the option of renewal. About two and a half months before the termination of the first year under the lease, the plaintiffs negotiated with one of the tenants, Harry Torp, for an extension under the lease for another year at a reduced rental of $93 a month. The Middlesex Transportation Company did not enter into these negotiations at all nor did it give the three months' notice provided for in the lease of its intention to terminate the lease at the end of the year. However, it did continue to use the premises, considering itself as a subtenant of Harry Torp.
The lease was extended year after year in a manner similar to the first extension. All negotiations were between the plaintiffs, as landlords, and Harry Torp, as tenant. The final extension was apparently agreed upon in August of 1933 for one year. The Middlesex Transportation Company considered itself during all this time as a subtenant and paid its rent to Harry Torp. The uncontradicted evidence shows that at no time until the commencement of this suit was there any demand made by these plaintiffs upon the Middlesex Transportation Company for back rent. All demands for such were made upon Harry Torp alone, as was distraint for back rent. Likewise, when the plaintiffs were asked by a judgment creditor, the mortgagee and the trustee in bankruptcy to give the names of the tenants of the garage, they gave only the name of Harry Torp. Thus the evidence stands uncontradicted that it was the intention of all concerned that Harry Torp should remain as the tenant and the Middlesex Transportation Company subtenant in all renewals or continuations under the original lease.
On May 11th, 1934, the Acorn Building and Loan Association (hereinafter called the Association) served notice upon the plaintiffs, as owners, and Harry Torp, as tenant, of the default in the mortgage held by it upon the premises in question. The notice also stated that the "said Association has and does hereby take possession of said lands and premises according to law." It then went on to forbid the plaintiffs to collect any further rent and directed the tenant and any persons holding possession under him not to pay the rent for said premises to any person except to the Association, or its duly authorized agent and to attorn to said Association and pay all further rent to it or its authorized agent.
In compliance with this notice and with the consent of the plaintiffs, the rent for the next five months, beginning with the month of May, was forwarded to the secretary of the Association. The back rent admittedly due to the plaintiffs at the time of the service of the notice, was adjusted on August 22d, 1934, by an "account stated" between the plaintiffs and Harry Torp as a result of which Harry Torp gave the plaintiffs his promissory notes aggregating $225, which were later negotiated and payments of $175 made thereon. This suit is not based upon these notes.
In October of that year, the plaintiffs directed Harry Torp to pay them the rent from then on but he did not do so. The next month, Antonio Peterpaul filed a voluntary petition in bankruptcy and Harry Torp was directed to pay the trustee in bankruptcy the rent. The Association did not object to this latter arrangement.
After collecting the rent from January to June, 1935, the trustee in bankruptcy learned that the property was owned by Vittoria Peterpaul and not by her husband, Antonio Peterpaul, the bankrupt. The trustee thereupon ceased collecting the rents and turned over the money which he had collected to Vittoria Peterpaul. Upon being notified of the decision of the trustee that he had no longer any right to collect the ...