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American Handkerchief Corp. v. Frannat Realty Co.

Decided: December 6, 1954.

AMERICAN HANDKERCHIEF CORP., PLAINTIFF-APPELLANT,
v.
FRANNAT REALTY COMPANY, DEFENDANT-RESPONDENT



On certified appeal from the Appellate Division of the Superior Court.

For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Brennan. For reversal -- None. The opinion of the court was delivered by Vanderbilt, C.J.

Vanderbilt

[17 NJ Page 14] The plaintiff was the tenant of the defendant's factory building in Jersey City under two long term leases, which by agreement in writing had been extended to January 31, 1952. In June 1949 the parties began to negotiate for an extension of these leases. In October 1949, after several conferences had been held, Mr. Marell, the president of the plaintiff corporation, sent Mr. Frank, the vice-president of the defendant corporation, a draft of what the plaintiff calls "an option agreement." Mr. Frank circulated this draft among the other directors of the defendant corporation, who then returned it to him with notes of suggested changes. Mr. Frank then incorporated these suggestions

in a new draft and forwarded two copies signed by him to Mr. Marell for signature by the plaintiff. This draft, which was prepared without the aid of legal counsel, was as follows:

"WHEREAS, There are certain Leases dated December 2, 1944 and January 26, 1947, now in effect until January 31, 1952, between Frannat Realty Company, as Landlord, and American Handkerchief Corp., as Tenant, and

WHEREAS, It has been mutually agreed that said Leases may be extended in the event of a bona fide and approved sublease by the tenant from their present expiration on January 31, 1952, for an additional two years and eight months, up to and expiring April 30, 1955, upon the terms and conditions hereinafter set forth,

Now, therefore, it is hereby agreed as follows: --

1. For One Dollar ($1.00), and other good and valuable consideration, said Tenant is hereby given the right, to renew and extend said Leases (dated December 2, 1944, and January 28, 1947, both of said Leases being duly extended on October 18, 1948), until April 30, 1955, in the event of a bona fide and approved sublease by the Tenant.

2. In the event of a bona fide and approved sublease by the Tenant, then and in that event, the Tenant shall, pay an additional rental of Seven Hundred and Fifty Dollars ($750.00) per year, or a total rental of Six Hundred Twelve and 50/100 Dollars ($612.50) per month instead of the present rental of Five Hundred and Fifty Dollars ($550.00) per month under said Leases, and the Landlord shall have the right, at his option, to terminate said extended Leases at any time after the date of this agreement going into force, in case of a bona fide sale of the property upon giving ninety days' notice in writing, by registered mail, at any time of his intention to so terminate, and said Leases shall thereupon, in all things, cease and end at the expiration of ninety days, following ninety days from the date of mailing of such notice as aforesaid.

3. Except for the foregoing conditions and option agreement, the renewal and extension shall be on the same terms, covenants and provisions of the said Leases dated December 2, 1944, and January 28, 1947, which are now in effect and which are incorporated herein by reference thereto as if set forth herein at length.

FRANNAT REALTY COMPANY,

Wm. A. Frank

AMERICAN HANDKERCHIEF ...


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