171 A.2d 30
No. 4914.Supreme Court of New Hampshire Rockingham.Argued April 4, 1961.
Decided May 31, 1961.
1. A renewal of a lease imports an extension of the tenancy for a like term, from and after the expiration of the current term; and an option for renewal upon the same terms and conditions, without more, does not carry with it an option for additional renewals after the first.
2. Where by the terms of a five-year lease of real property the lessees were granted the right of renewal for a second five-year period and following renewal, with three years remaining of the renewal period, the lease was assigned to the plaintiffs and by agreement with the lessor was “renewed” as of the next day “with the same rent and the same conditions as contained in the original lease” such agreement operated as a cancellation of the original lease and its unexpired term and created a new lease for a five-year term as of that date with a right to a five-year renewal at the expiration of the first five-year term.
3. In such case, the defendants who subsequent to the agreement acquired the premises from the lessor’s administrator “subject to outstanding tenancies and leases” with actual notice of the terms of the agreement, which appeared upon the original lease on which the administrator endorsed his assignment to the defendants of all of the estate’s interests therein, were bound thereby.
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BILL IN EQUITY, by the owners and operators of a lunchroom and clam stand on leased premises in Hampton owned by the defendants, seeking specific performance of a lease of the premises, and an injunction against interference with operation of the premises by the plaintiffs.
The original lease of the premises in question was dated July 10, 1946 and provided for rental to April 1, 1947 at a rent of $200, and for a term of five years thereafter at a rental of $600 per year, “with the further privilege that the Lessees may renew this lease at the expiration of said five year term for a like period of five years at the same rent and upon the same terms and conditions as hereinafter provided.” The lease was duly signed, witnessed, acknowledged, and recorded.
Thereafter on April 18, 1949 the lease was assigned by the original lessees with the consent of the lessor, and under date of April 1, 1954 it was again assigned by the assignee in possession to the plaintiffs, with the consent of the lessor. At this time, under date of March 31, 1954, the plaintiffs and the original lessor signed the following agreement, written upon the original lease, and thereafter recorded: “The original lease from Annie Pearl Lamprey to Leroy W. and Catherine A. Dunfey dated July 10, 1946 is hereby renewed as of April 1, 1954 with the same rent and the same conditions as contained in the original lease.” The agreement was neither witnessed nor acknowledged.
On April 1, 1958, the original lessor Annie Pearl Lamprey, deceased, and the leased premises were later conveyed to the defendants by deed of her administrator, dated May 19, 1958 and recorded June 11, 1958. This conveyance was. “subject . . . to and with the benefit of all existing tenancies and leases.” Under date of June 11, 1958, the administrator endorsed upon the original lease of July 10, 1946, bearing the agreement of March 31, 1954, an assignment to the defendants of “all the interest of the estate . . . herein.”
Trial by the Court (Griffith, J.). Subject to the plaintiffs’ exception the Court excluded “as a matter of law” certain evidence offered by them that the original lessor and the plaintiffs understood and intended that their agreement of March 31, 1954, endorsed upon the lease should be a lease “the same as originally held . . . that is for a period of ten years, five years with a five-year option.”
The Trial Court ruled that “the renewal of the lease did not
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include a renewal of the option to a further renewal, and that the lease was terminated as of April 1, 1959.” Subject to the plaintiffs’ exception, the bill was dismissed.
Richard P. Dunfey and Robert Shaw (Mr. Shaw orally), for the plaintiffs.
George R. Scammon and John B. Ford (Mr. Ford orally), for the defendants.
DUNCAN, J.
By the great weight of authority an option for renewal of a lease upon the same terms and conditions, without more, does not carry with it an option for additional renewals after the first. I American Law of Property, s. 3.87; Bennett, Landlord Tenant, s. 106. See cases collected in annotation, 31 A.L.R. 2d 607, 615, 623. Thus if the agreement of March 31, 1954 was itself a renewal of the original lease, it carried with it no right to a further renewal extending beyond April 1, 1959, and the ruling of the Trial Court was correct.
The lease of July 10, 1946 was first renewed or extended at the expiration of the first five-year term on April 1, 1952. Under the authorities heretofore cited, this entitled the lessees to occupy the premises until April 1, 1957, but without right of further renewal. During the second five-year term, and three years before its expiration, the plaintiffs as new owners of the business conducted on the leased premises agreed with the owner of the premises by endorsement on the lease under date of March 31, 1954 to a “renewal” as of that date, “with the same rent and the same conditions as contained in the original lease.”
A “renewal” of a lease commonly imports an extension of the tenancy for a like term, from and after the termination of the current term. Cf. Maybury Shoe Co. v. Company, 88 N.H. 172. “If the covenant for a renewal is general and unqualified . . . it will be presumed that the renewal lease was to be for the same duration as the former lease in the absence of a provision to the contrary . . . .” 2 Underhill, Landlord Tenant 1369.
The agreement of March 31, 1954 was not technically a “renewal” of the original lease, since three years of the current term remained unexpired, and the agreement created a new term to commence on the following day. The parties did not undertake to renew a lease on its expiration three years later. The purpose of the agreement
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was to cancel the subsisting lease and its unexpired term, and to create a new lease to new lessees, for a new term commencing April 1, 1954, upon conditions incorporated by reference from the lease of July 10, 1946 upon which the new agreement was endorsed. Cf. Shannon v. Jacobson, 262 Mass. 463, 466, 468. It is evident that the parties intended the conditions thus incorporated by reference to include “the same conditions as contained in the original lease.” Since the effect of the action of the parties was to create a new lease, rather than renew the existing lease, the terms incorporated by their agreement included the provision for a five-year renewal at the expiration of the first five-year term. We are of the opinion that as between the parties to the agreement (RSA 477:7), the plaintiffs became entitled to possession for five years, or in case of a renewal for ten years, from April 1, 1954.
The defendants have argued that the evidence excluded by the Trial Court was properly excluded, since there was no “offer to prove that [the defendants] had any knowledge or notice . . . of the transactions” between the plaintiffs and the defendants’ predecessors. In view of our interpretation of the agreement of March 31, 1954 the exclusion of the proffered evidence concerning the intention of the parties becomes moot since it was offered to establish the intention which we consider was manifested by the written agreement.
The remaining issue is whether the defendants are bound by the agreement of March 31, 1954. The record indicates that the defendants, as purchasers of the leased premises, acquired them “subject to outstanding tenancies and leases” and that they had actual notice of the terms of the agreement of March 31, 1954 since it appeared upon the original lease on which the administrator of the original lessor endorsed his assignment to the defendants of all of the estate’s interest therein. Cf. Pratte v. Balatsos, 99 N.H. 430; 101 N.H. 48. We hold that the defendants acquired the property subject to the plaintiffs’ right to renew the lease for a five-year term commencing April 1, 1959 and that the plaintiffs’ bill was erroneously dismissed.
Decree vacated; remanded.
All concurred.
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