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Trustees of First Presbyterian Church v. Company-Jewelers

Decided: November 7, 1952.

THE TRUSTEES OF THE FIRST PRESBYTERIAN CHURCH IN NEWARK, A NEW JERSEY CORPORATION, PLAINTIFF-RESPONDENT,
v.
THE HOWARD COMPANY-JEWELERS, A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT-APPELLANT



Jayne, Proctor and Schettino. The opinion of the court was delivered by Schettino, J.s.c.

Schettino

This is an appeal from a judgment entered on the verdict of the trial judge, sitting without a jury.

Plaintiff's thesis is that the parties entered into a contract of lease between plaintiff as landlord and defendant as tenant. Defendant contends the negotiations did not reach a contractual stage but rather were a preliminary understanding as to some terms of a contemplated formal lease which was never fully agreed upon or executed. The trial court found

for plaintiff and awarded as damages the loss of rental for the period between the date of commencement of the term of the alleged lease and the date of reletting to a third party, plus the brokerage commissions for which plaintiff claims to be liable in connection with the lease to defendant and attorney's fees connected with that transaction. Defendant challenges the inclusion of the brokerage commission as an element of damages but we need not pursue that issue because of our views with respect to the issue of liability.

The facts are these: The premises were occupied by I. Hausman & Sons, Inc., under a lease which was to expire on April 30, 1952. Hausman desired to terminate the lease and approached Ralph G. Schwebemeyer & Co., representatives of plaintiff, for that purpose. Negotiations between Mr. Schwebemeyer and Mr. Linder, defendant's president, followed. Schwebemeyer and Linder drafted the following proposal dated May 2, 1950 addressed to Schwebemeyer:

"Succeeding our numerous discussions of the subject together, we now advise that we are prepared to enter into a lease for the store premises and basement at 813 Broad Street, Newark, New Jersey, formerly occupied by Hausman Shoes, provided we can do so on the following basis:

1) The lease term to be six (6) years and eleven (11) months to commence on June 1, 1950 and to terminate on April 30, 1957.

2) Premises to be devoted to the sale at retail of jewelry and optical goods, men's and women's ready-to-wear and furs, and appliances such as radios, television sets, refrigerators, washing machines, vacuum cleaners, deep freezers, etc.

We agree to pay rental based upon 6% of merchandise sales covering items of jewelry and optical goods and men's and women's wear and furs and a percentage of 3% of the aggregate sales of all items under the appliance category, against which we will pay the following minimum guaranteed rentals:

1) During the first year and 11 months -- from June 1, 1950 to April 30, 1952 -- at the annual minimum rental of $18,000. payable monthly.

2) During the next two-year period -- from May 1, 1952 to April 30, 1954 -- at the annual minimum rental of $20,000. payable monthly.

3) During the next three-year period -- from May 1, 1954 to April 30, 1957 -- at the annual minimum rental of $23,000. payable monthly.

It is our understanding that a termination of the Hausman lease can be effected to the end that we become ...


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