McCarter v. Davis
194 N.Y.S. 688, 1922 N.Y. App. Div. LEXIS 4926, 202 A.D. 519 (1922)
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Rule of Law:
A landlord's waiver of a breach of a continuing covenant in a lease, such as a covenant against subletting, applies only to the specific instance waived and does not operate as a general waiver for subsequent breaches of the same covenant.
Facts:
- McCauley, the plaintiff-landlord, leased a property to the defendant, Davis, under a three-year written lease starting October 1, 1919.
- The lease contained a covenant explicitly prohibiting Davis from subletting the premises without McCauley's written consent, stipulating forfeiture as a penalty for violation.
- During the summer of 1920, Davis sublet the premises to two women.
- McCauley was aware of the 1920 sublet and did not object, thereby waiving the breach for that specific instance.
- On June 1, 1921, Davis again sublet the premises, this time to a subtenant named Johnston for a term of three and a half months.
- Davis alleged that McCauley had made a casual verbal statement around October 1919, saying the house was his to "do anything you please with it," which he interpreted as a general waiver of the subletting clause.
Procedural Posture:
- McCauley (plaintiff) initiated an action for ejectment against her tenant, Davis (defendant), in the trial court.
- Davis, in his answer, raised the defense of waiver and also included facts seeking to reform the lease, though not formally pleaded as a counterclaim.
- At trial, the judge ruled that evidence concerning the reformation of the lease was inadmissible because it was improperly pleaded, limiting the issue for the jury to the question of waiver.
- The jury returned a verdict in favor of the defendant, Davis.
- The plaintiff, McCauley, appealed the judgment entered on the jury's verdict to this intermediate appellate court.
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Issue:
Does a landlord's waiver of one breach of a lease covenant against subletting operate as a waiver for all subsequent breaches of that same covenant?
Opinions:
Majority - Kelby, J.
No. A landlord's waiver of a single breach of a covenant against subletting does not waive the covenant for all future breaches. The covenant not to sublet is a continuing one, meaning each subsequent unauthorized subletting constitutes a new and distinct breach, giving rise to a separate cause of action for forfeiture. Therefore, the plaintiff's waiver of the 1920 sublet does not prevent her from enforcing the covenant and claiming a forfeiture for the subsequent 1921 sublet. Furthermore, the defendant's proffered evidence of a general waiver—a casual remark made in response to a question about removing plants—is insufficient to support a finding of intent to waive a formal, written covenant for all future violations.
Analysis:
This decision reinforces the legal doctrine of 'continuing covenants' in contract and property law, particularly within leases. It establishes that a single act of waiver by a landlord does not permanently nullify their contractual rights for the entire lease term. This provides landlords with the flexibility to be lenient on a case-by-case basis without fearing the inadvertent forfeiture of their ability to enforce the lease in the future. The ruling also underscores the high evidentiary standard required to prove that a party intended to waive a clear, formal written term through informal verbal communications.
