Defendant moves for an order dismissing the complaint and for judgment on the ground that no genuine issue exists as to any material fact; and which it claims to be entitled to as matter of law. Rule 3:56-3.
Plaintiff occupied commercial premises in Jersey City under a lease made by it with Nobdor Realty Corp. for a term of years ending March 31, 1944. During the term Nobdor's interest was assigned to defendant, which thereupon agreed with plaintiff for the extension of the term to March 30, 1950. Some time thereafter, on October 10, 1946, the parties entered into a further agreement by which the lease was amended. That agreement, together with certain preliminary oral representations alleged to have been made to plaintiff by defendant's agents, is the basis of the present action.
The agreement recites that defendant as lessee in a certain over-lease, which covers the land and buildings that include the premises in question, is obligated thereby to pay all real estate taxes on the subject property. Under the original
lease plaintiff had no concern with taxes. The amending agreement alters this. With respect to the remainder of the then current term it provides for the contribution by plaintiff, at a specified rate, to the payment of any tax increase in any one year, on the premises leased to it, and designates the year 1945 as standard. All such contributions made are to be regarded as part of the rent. Conversely, any tax decrease in the same period is to work a corresponding rent reduction.
Also crucial to the controversy is the provision of the agreement that gives to plaintiff a contingent right, as hereinafter shown, to the further extension of its leasehold. Defendant had an extension privilege in its over-lease, and the agreement provides: "In the event Landlord (defendant) extends the term of said over-lease or obtains a new lease of the premises" plaintiff shall have the option of extending the term of its leasehold with defendant for a period not to exceed five years, upon a rental basis of $8,000 per annum, subject, however, to an agreed proportionate increase or decrease, dependent upon any increase or decrease in the annual net rent payable by defendant under such extension of its over-lease or under any new lease obtained by it, above or below an annual net rent of $60,000. Other provisions of the agreement will be noticed as they become relevant to the decision.
The complaint is in five counts. The first count, which demands the return of tax contributions paid, is predicated upon a claim of fraud in the inducement of the amending agreement. The charge is, confining ourselves to essentials, that defendant's agents represented to the agent of plaintiff that defendant intended to exercise its option to extend the over-lease; that upon such exercise it would, at plaintiff's election, extend the latter's leasehold for a maximum period of five years; that plaintiff's rent for such extended period would be reduced by a sum equal to 7.09 per cent of any decrease in defendant's rent under the over-lease below $60,000 per annum for the same period; that said representations
were false to the knowledge of defendants and its agents, in that defendant did not intend to extend its said over-lease and in that defendant's said option to extend provided for an annual rental in excess of $60,000; that said representations were fraudulently made to induce plaintiff to enter into the said amending agreement and with intent to deceive and defraud plaintiff thereby; and that plaintiff, believing the representations to be true, and in reliance thereon, was induced to enter into the said agreement.
Briefing of the motion as addressed to the first count is given largely to the question of rescission as a condition precedent to a suit to recover money payments, and of the sufficiency of the allegations of fraud, and as to whether the representations alleged relate not to a present fact but rather to a mere promise of future performance. Anderson v. Modica , 4 N.J. 383 (1950), and compare Roberts v. James , 83 N.J.L. 492 (E. & A. 1912). The points thus made will not be considered in this opinion. The reason is my belief that a final and more definite result lies in the application of the parol evidence rule. Naumberg v. Young , 44 N.J.L. 331, 341 (Sup. Ct. 1882). That rule is matter of substantive law and not of evidence merely. Winoka Village v. Tate, infra. On this aspect of the case supplemental briefs were called for and have been amply furnished.
Plaintiff stands on the principle, enunciated in many cases, that fraud at the option of its victim vitiates a contract, and that where the contract is in writing the parol evidence rule will not exclude the proof. And plaintiff makes the further contention that as between the oral representations in the present instance and the contents of the writing there is no conflict, with the result that no question of altering the writing by parol is involved. More specifically, it is urged that the representations in point simply declared defendant's "then present state of mind," and declared it falsely, thus implementing the ...