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United States Court of Appeals 

for the 

District of Columbia Circuit 



TRANSCRIPT OF 
RECORD 





BRIEF FOR APPELLANT AND APPENDIX 



IN THE 


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XCnited States Court of ^Vppeals 
district of Columbia 

fluteo-Scss Gaori & Aww* 

A _, Vi fathtOaiJttwtG&tsfttim 


Appeal No. 9647 


FEB 111343 


Basilixo Investment Corporation, a corporation, 

Appellant, 


United Cigae- Whelan Stores Corporation, a corporation. 

Appellee. 


appeal prom the municipal court of appeals fob the 

DISTRICT OF COLUMBIA 


Herman* Mtt.t.pt^ 
Attorney for Appellant, 
800 H Street, N. W. 


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INDEX 

PAGE 

I. Jurisdictional Statement _ 1 

II. Statement of the Case-- 2 

III. Statement of Points - 4 

IV. Question Presented _ 4 

V. Summary of Argument_____ 5 

VI. Argument --_--.-6 

Conclusion_____13 

CASES CITED 

Bruder v. Crafts, 139 N. Y. S. 307 (Sup. Ct. App. Term)... 8 

Butler & Herman v. Meth (Sup. Ct. App. Term), 122 N. Y. S. 271 6 

Cleveland Wrecking Co. v. Aetna Oil Co., 387 Ky. 542, 154 S. W. 

(2d) 31, 137 A. L. R. 352_______ 11 

Cooper v. G-ambrill, 146 Ala. 184, 40 So. 827.... 8 

Failek v. Cramer, — Mo. App. —. 191 S. W. (2d) 375___ 7 

Gostin v. Needle, 45 A. (2d) 772 — Md. — (163 A. L. R. 1013)..7,11 

Greenwood v. Bennett, 208 Ala. 680, 95 So. 159_ 11 

Krim Realty Co. v. Varari (Sup. Ct. App. Term), 229 (97 Misc. 407 7 

Mason v. Curro, D. C. Mun. App. 41 A. (2d) 164...6,11 

McClung v. McPherson, 47 Ore. 73, 81 P. 567___ 8 

Parkway Baking Co. v. Fraehauf Trailer Co., 351 Pa. 82, 40 A. 

(2d) 268 __ 8 

Payne v. Braithwaite (Sup. Ct. App. Term), 185 N. Y. S. 107 (113 
Misc. 517) __.__7,11 

Roberts v. McPherson, 62 N. J. Law 165, 40 At. 630____ 8 

Title & Trust Co. v. Durkheimer Inv. Co. 155 Or. 427, 63 P. (2d) 909 11 





















IN THE 


XCnlte6 States Court of Appeals 
district of Columbia 

Term 194 
Appeal No. 9647 


Baseliko Investment Corporation, a corporation, 

Appellant, 

v. 

United Cigar-Whelan Stores Corporation, a corporation, 

Appellee. 


APPEAL FROM THE MUNICIPAL COURT OF APPEALS FOR THE 

DISTRICT OF COLUMBIA 


BRIEF ON BEHALF OF APPELLANT 


L JURISDICTIONAL STATEMENT 

This is an appeal by Basiliko Investment Corporation, a 
corporation, appellant, from a judgment of the Municipal 
Court of Appeals for the District of Columbia reversing a 
judgment of the Municipal Court, Civil Division, Landlord 
and Tenant Branch. The Municipal Court gave judgment 
in favor of appellant, plaintiff below. An appeal was taken 
to the Municipal Court of Appeals which reversed the judg¬ 
ment on September 10th, 1947. The appellant petitioned 
this Court for an allowance of an appeal, and this Court 
allowed an appeal on December 15,1947. 

The Municipal Court had jurisdiction inasmuch as the 
case was a landlord and tenant proceeding for possession. 


2 


The Municipal Court of Appeals had jurisdiction to review 
and reverse the judgment by virtue of Title 11-722 District 
of Columbia Code (1940) Supp. III. This Court has juris¬ 
diction to entertain the appeal by virtue of Title 11-733 Dis¬ 
trict of Columbia Code (1940) Supp. III. 

II. STATEMENT OF THE CASE 

In the year 1939 Equitable Building Company leased to 
United Cigar-Whelan Stores Corporation, a store on the 
first floor of the Bond Building, 14th and New York Ave., 
N. W., for a term commencing December 1st, 1939, and end¬ 
ing December 31st, 1949. Among the provisions of an eight- 
page single-spaced lease, paragraph numbered eighteen pro¬ 
vided as follows: 

* ‘ 18. In the event that Lessor shall make a bona fide 
contract for the sale of the land and building of which 
the demised premises are a part at any time during the 
term herein, or in the event Lessor shall in good faith 
intend to demolish the building of which the demises 
premises form a part and shall thereafter within a rea¬ 
sonable time actually demolish same, the Lessor, or its 
successor in title shall have the right to cancel and 
terminate this lease at any time after December 31, 
1941, upon the Lessee receiving at its office in New York 
City, not less than three months prior notice in writing 
by registered mail upon the date set forth in such 
notice, the term of this lease shall come to an end and 
expire in the same manner and to the same effect as 
though such date had been the date originally set forth 
herein for the expiration of the term. Lessor shall only 
have the right to cancel and terminate this lease as in 
this paragraph provided, and such cancellation shall be 
valid and effectual only upon condition that Lessor shall 
pay to Lessee in cash or acceptable certified check the 
sum of Seventy-five Hundred ($7,500.00) Dollars if 
this lease is cancelled to be effective any time during 
the calendar year 1943, and Twenty-five Hundred Dol¬ 
lars ($2,500.00) in cash or acceptable certified check if 
this lease is cancelled at any time thereafter during the 
term herein. All payments herein agreed to be made 



3 


by Lessor to Lessee shall be paid on or before sixty (60) 
days after the giving of notice as aforesaid, and Lessee 
agrees that it will pay the rent reserved in this lease up 
to the date fixed by any notice of cancellation for the 
termination thereof. The provisions of this paragraph 
shall not be construed as restricting the right of Lessor 
to possession provided for under Paragraphs Nos. 10, 
11 and 13 herein” (App. 8-9) (Underscore supplied) 

On May 1, 1943, the Lessor conveyed the property, sub¬ 
ject to the lease to the Metropolitan Museum of Art, and 
this last named grantee conveyed to Sophia Cokenias, as 
straw party for Basiliko Investment Corporation on May 
23,1946. Cokenias in turn conveyed to her principal Basil¬ 
iko Investment Corporation, on May 31, 1946. 

On August 29, 1946, Basiliko Investment Corporation by 
registered mail to the Appellee’s New York office, notified 
United Cigar-Whelan Stores Corporation of cancellation of 
the Lease (App. 6-8). 

On December 9,1946, the Appellant sent to the Appellee 
at its New York office a second notice of cancellation, stating 
the second notice was given because of an inadvertance and 
oversight the $2,500.00 required had not been sent within 60 
days of the first notice; that the same intention of cancella¬ 
tion prevailed with the Appellant, and to avoid any question 
of any defect a new notice was being given (App. 6-7). 
Within 60 days of this new notice a $2,500.00 certified check 
was remitted to Appellee (App. 6-7). On December 9,1946, 
the rent for the premises from June 1, 1946, had not been 
paid, and the Appellant requested the same be paid in that 
it was due and owing (App. 7). On April 8, 1947, the 
Petitioner filed its complaint in the Municipal Court for 
possession of the premises (App. 1-2). After the Appellee’s 
motion to dismiss was overruled its answer was filed (App. 
2-4). On Appellant’s motion for summary judgment to 
which was attached photostatic copy of the lease, the notice 
of termination of December 9, 1946, and affidavits, and a 
stipulation permitting the Court to decide the matter as one 


4 


of law, a judgment was entered in favor of the Appellant 
for possession (App. 14). The Court wrote a memoran¬ 
dum supporting his finding (App. 9-13). The Appellee ap¬ 
pealed to Municipal Court of Appeals which reversed (App. 
15-19), and the case is now before this Court on appeal 
from the Municipal Court of Appeals. 

m. STATEMENT OF POINTS 

1. The Appellant as purchaser of the premises was a 
‘ * successor in title ’ ’ capable of giving the notice of termina¬ 
tion of the lease, after conveyance to it as contemplated by 
the provisions of the lease. 

2. That the Appellant having an intention, at all times, 
to terminate the lease, and although had neglected to remit 
the $2,500.00 required within sixty days after the first notice, 
and by the second notice did remit that amount, under all 
of the circumstances the giving of the notices and intention 
to terminate the lease should be liberally and not strictly 
construed. 

3. That the Appellant, in giving the notice of the termi¬ 
nation, was not limited to the time between the contract of 
purchase and the conveyance to it of the property, but could 
give the notice of termination within a reasonable time after 
it acquired title. 

IV. QUESTIONS PRESENTED 

The questions presented for adjudication in the trial 
court, reviewed and reversed by the lower appellate court 
and now before this Court are: (1) whether the Appellant, 
as a bona fide purchaser of the property, is a “successor in 
title” capable of terminating the lease after it acquired the 
property, (2) whether the giving of a notice to terminate 
“at any time after December 31,1941” contemplates a strict 
or liberal construction? and (3) where the Appellant in 
acquiring the property May 23, 1946, and gave a notice of 
termination August 29, 1946, but because it failed to remit 


5 


the required compensation to the Appellee for the balance 
of the term in sum of $2,500.00 and followed this up with a 
new notice of termination dated December 9,1946, in which 
the same intention of termination of the lease is expressed, 
and the compensation is given within time, is such termina¬ 
tion of the lease proper as being within a reasonable time, 
or is the Appellant restricted in termination of the lease, 
where its provision permits it to be terminated “at any time 
after December 31, 1941” for the period between the con¬ 
tract of sale and the date of acquiring the deed? 

V. SUMMARY OF ARGUMENT 

The Appellant contends that the notice of termination 
was properly given and the lease was terminated because 
of the following reasons: 

(1) In the light of the language of paragraph 18 of 
the lease, a right was conferred upon the Appellant “as 
a successor in title” to terminate the lease, and this 
language is so clear that it was conceded by the Appel¬ 
lee in the lower appellate court. 

(2) The plain language also provided “the successor 
in title shall have the right to terminate this lease at 
any time after December 31, 1941 ” and this should be 
liberally construed, in absence of any limitation in the 
lease to the contrary. The lower appellate court def¬ 
initely has made a strict and narrow construction con¬ 
trary to its previous decision which is not warranted by 
the terms of the agreement and definitely inconsistent 
with the plain meaning of the words “at any time after 
December 31,1941”. 

(3) The provisions of paragraph 18 permitted, after 
the bona fide sale, of giving notice “at any time after 
December 31,1941 ’ \ The Appellant acquired the prop¬ 
erty May 23, 1946, and took no steps or acted in any 
way between that date and August 29,1946, to recognize 
the Appellee as tenant, or did it act in any manner in¬ 
consistent with its desire to terminate the tenancy. To 
require the Appellant to act to terminate the lease at 
the time of the completion of the sale is inconsistent 
with the language and intention of the lease and with 
the liberality of construction as stated by the cases. 




6 


VL ARGUMENT 

1. It seems that both the Appellee and the lower appellate 
court have not disputed the fact that the Appellant was a 
party contemplated by the lease to terminate as a bona fide 
purchaser. The plain unambigious phrases of paragraph 
18 provide that the “Lessor its successor in title shall have 
the right to terminate.” In a case before the Municipal 
Court of Appeals, Mason v. Curro, D. C. Mun. App. 41 A. 
(2d) 164, the provisions of the lease provides that if the 
Lessor sold the property, after notice to the tenant giving 
the first refusal, the Lessor could terminate. The Lessor in 
that case did not actually advise the tenant that the lease 
was cancelled, but the Municipal Court of Appeals held that 
by the notice to the tenant giving the tenant first refusal of 
the purchase of the property he was effectually notified of 
the termination. There was no language in the lease in 
that case giving the right to the “successor in title.” As 
pointed out in that decision, the question as to whether the 
Lessor or the Purchaser was the proper person to give the 
notice was one of conflicting opinion, citing cases. In that 
case, although the language of the lease was silent as to 
the purchaser giving the notice, eight days after the con¬ 
summation of the sale the purchaser gave a 30 days ’ notice 
to quit as required by the Code (Title 45-904) and upon that 
notice he relied in his case for possession. On these facts 
the Municipal Court of Appeals held the notice effectual 
and affirmed a judgment for the purchaser for possession. 

In most of the cases the question before the Court was 
whether the Lessor alone could give the notice and its giv¬ 
ing restricted only to him, or whether the notice could be 
given by the purchaser after acquiring the property. 

In the following cases the right to terminate, at the time 
of a bona fide sale, was limited to the Vendor-Landlord, and 
not given to the Purchaser: 

Butler & Herman v. Meth (Sup. Ct. App. Term), 122 N. Y. 
S. 271, where the Court stated in restricting the right to 
terminate, to the Lessor only: 


7 


“By the terms of the ‘Fourth’ paragraph it is agreed 
that ‘in event of sale’ the term demised ‘shall cease 
and be determined upon fifteen days notice to the ten¬ 
ant’. The Landlord did not give the notice or elect to 
terminate the lease. The tenant paid the rent to the 
new landlord who accepted it. * * * The ‘Fourth’ para¬ 
graph did not mean that the landlord could arbitrarly 
terminate the term demised simply upon giving 15 days 
notice to the tenant. It meant what it said, that the 
tenancy could be terminated ‘in the event of sale’ pro¬ 
vided that 15 days notice of the sale was given the ten¬ 
ant. In selling the premises without giving the required 
notice the landlord waived the right to insist the tenant 
should forfeit his lease/’ 

It is clear that this decision limited the right to terminate to 
the Vendor-Landlord. To the same effect see Payne v. 
Braithwaite (Sup. Ct. App. Term), 185 N. Y. S. 107 (113 
Misc. 517). 

In Gostin v. Needle, 45 A. (2d) 772 _Md.. (163 A. 

L. R. 1013), the Maryland Court of Appeals laid down the 
same rule, that is, that the right to terminate was limited, 
before the sale, to the Vendor, and the Vendee did not re¬ 
ceive this right, but that Court observed that “Difference in 
clauses have been differently construed.” To the same 

effect is Fallek v. Cramer, _Mo. App_, 191 S. W. (2d) 

375. 

However, on the other hand cases of Krim Realty Co v. 
Varari (Sup. Ct. App. Term), 161 N. Y. S. 229 (97 Misc. 
407), contains this language: 

“Whether cancellation clause was personal to the 
original lessor or ran with the land is to be determined 
from the intention of the parties” (Underscore sup¬ 
plied). 

x 

The clause construed in the Krim Realty case was as fol¬ 
lows : 


“In case the said landlord shall sell the premises 
and the purchaser thereof demands possession the land- 






8 


lord may cancel this lease by giving to the tenant 60 days 
notice. 

“These words would seem to limit the privilege of 
cancellation to ‘the landlord’, i.e., the original lessor. 
The purchaser is the person who is under the contract 
obligated to purchase, but who has not yet taken title. 
The language used contemplates three parties, the land¬ 
lord, the purchaser and the tenant. It also contemplates 
notice by the landlord in case the purchaser desires 
possession. The situation also indicates that the intent 
was that the cancellation clause was personal to the 
Lessor.” 

It is therefore obvious that if the intent of the Krim 
Realty case was that the cancellation was not personal to 
the Lessor, it might be exercised by the Purchaser. 

In Bruder v. Crafts, 139 N. Y. S. 307 (Sup. Ct. App. Term) 
it was stated: 

“The real question, viz; whether the parties intended 
the term should be limited to a bona fide sale and notice 
by the original landlord his heirs or assigns. The 
parties had the right to provide the terms of the lease 
should be limited to either contingency and if they evi¬ 
denced intention of the right to terminate shall be exer¬ 
cised by the landlord his heirs and assigns that inten¬ 
tion can be given effect.” 

In Parkway Baking Co. v. Fraehauf Trailer Co., 351 Pa. 
82, 40 A. (2d) 268, where the lessee agreed in event of sale 
after the third year of the lease to vacate in 90 days after 
notice from the Lessor, and the lease defined the Lessor to 
include assigns, the notice to quit was given by the purchaser 
on the date the purchaser received title and this was held 
sufficient. 

To the same effect see Cooper v. Gambrill, 146 Ala. 184, 
40 So. 827; McClung v. McPherson, 47 Ore. 73, 81 P. 567, 
and Roberts v. McPherson, 62 N. J. Law 165, 40 At. 630. 

In the light of the conflict it seems apparent between all 
of the cases, however, the question of intention is given 



9 


great weight. None of the cases, either pro or con, include 
phrases specifically referring to the right given of cancella¬ 
tion similar to that used in paragraph 18 in the instant case 
to the effect, “The Lessor or its successor in title.” The 
most that can be said about the cases which are above cited 
and that will be cited in the Appellee’s brief are the general 
phrases usually found in all agreements towards the con¬ 
clusion of the agreement, to the effect that the agreement is 
binding upon the “parties their heirs, executors, adminis¬ 
trators and assigns. ’ ’ However, when the language of para¬ 
graph 18 is read, there can be no question that the right of 
termination in the case at bar is expressly given to the Ap¬ 
pellant as “a successor in title.” It is apparent that both 
the Appellee and the Municipal Court of Appeals concede 
this proposition. 

2. The intention to terminate should be liberally con¬ 
strued. 

With the above concession, it appears then, that the Ap¬ 
pellee and the Municipal Court of Appeals argue that the 
Appellant, because as the lower appelate court said, it was 
not given “at time of completion of the sale or at least prior 
to any act on part of the purchaser which recognized the 
existence and continuation of. the tenancy. * * * He (the 
purchaser) could make that choice at any time he made the 
purchase but not any time after he made the purchase.” 
Apparently the decision holds that the cancellation must be 
made “between making the contract to buy and consummat¬ 
ing the contract.” 

If this be correct, it would place any purchaser in an un¬ 
usual position. It might be conceivable that the purchaser 
might desire possession, but the vendor might not want the 
tenancy disturbed until the purchaser made settlement for 
fear that the purchaser might not consumate and thereby 
jeopardise the vendor who does not care to receive posses¬ 
sion. Stated another way, in transactions of the size of 
the Bond Building, the vendor may readily require that 
nothing be done by the vendee until the vendee tenders all 



10 


of the cash required of him and execute all papers, for until 
that is done it is possible that the vendee might not consum¬ 
mate, and if notice is given to the tenant after making the 
contract to buy, thereby putting the tenant on notice, and he, 
acting on such notice, makes negotiations to vacate, and 
thereafter the vendee defaults, position of the vendor would 
be endangered. It is plain that other similar situations could 
result if the vendor permitted notice to be given before con¬ 
summation of the contract. Yet, the Municipal Court of 
Appeals makes this a requirement to effect a termination 
regardless of the fact that the lease contains the language 
to the contrary. It is significant that the language of termi¬ 
nation as to the “successor in title” is closely connected 
with the right to terminate at “any time after December 31, 
1941.” As a practical proposition, among business men, 
when sales are made and possession, under similar provi¬ 
sions of leases are contemplated, language which fairly im¬ 
plies that the purchaser can terminate the lease as a “suc¬ 
cessor in title” and at any time “after December 31, 1941” 
and there is no prohibition to the contrary in the lease, it 
would be misleading and a harsh and narrow construction 
to require them to understand that such language does not 
mean what is plainly infered, but means that the notice must 
be given before the contract is consummated. 

What does the Municipal Court of Appeals infer when it 
states that “Had this been (the right to terminate at any 
time after December 31, 1941) the intention of the parties, 
it surely would have been expressed in plainer language?” 
There is no language in the lease inconsistent with the 
phrase “at any time after December 31, 1941.” There is 
no language which would in any way hint to the contrary. 
AVhat kind of plainer language must be employed? When 
read in its ordinary meaning and when used in the connec¬ 
tion with termination that the lease could be terminated by 
the Lessor or its successors in title at any time after De¬ 
cember 31, 1941, no other understanding can be gathered, 
and when it is considered that the lease apparently was pre- 



11 


pared in a painstaking manner, consisting of eight single 
typed pages, from its contents within its four corners, it 
would be a far stretch of the mind to say that there was a 
contrary intention. 

The paragraph 18 contains the phrase “at an2 time” in 
two places. The first, is in conjunction with reference to the 
term of the lease, that at any time during the lease, and the 
second occurence is specifically with respect to the time 
being reserved at “any time after December 31,1941.” The 
cases of Payne v. Braithwaite, Gostin v. Needle, supra, and 
Cleveland Wrecking Co. v. Aetna Oil Co., 387 Ky. 542, 154 
S. W. (2d) 31,137 A. L. R. 352, use this phrase, but only in 
the same manner as paragraph 18 with reference to the con¬ 
tinuance of the entire term and not as to the time when can¬ 
cellation may take place. 

It was stipulated between the parties that the Court 
might rule upon the matter as a question of law, and that 
the Court did so by holding that the phrase “at any time” 
means “within a reasonable time.” 

This construction is in the light of the cases and the an¬ 
nouncement made by the Municipal Court of Appeals itself 
in Mason v. Curro, supra, that “Notice of termination is 
not strictly construed. It is sufficient if intent is fairly 
shown, or fairly communicated,” cited Title & Trust Co. v. 
Durkheimer Inv. Co., 155 Or. 427, 63 P. (2d) 909, and Green¬ 
wood v. Bennett, 208 Ala. 680, 95 So. 159. In the Mason v. 
Curro case, supra, the Court went at great length to hold a 
notice of termination to be valid. The Vendor merely was 
complying with his contractual obligation of giving the ten¬ 
ant first refusal to purchase at the same terms of the pros¬ 
pective and ultimately successful purchaser. The copies of 
the contract submitted to the tenant provides for settlement 
in 30 days after acceptance, possession 30 days after settle¬ 
ment. There was a provision in the contract that the pur¬ 
chaser desired it for his use as his residence. But nowhere 
in that notice by the Vendor of the contemplated sale was 
the tenant specifically advised that the tenancy was termi- 





12 


nated or that he was directed to vacate. After consummation 
of the sale the new purchaser, recognizing that no proper 
notice was given terminating the lease served a 30 days’ 
notice as was required by the lease; it is interesting to note 
that in event of termination the tenant was entitled to a 30 
days’ notice, but the notice from the Vendor did not contain 
any reference to when the tenant was to vocate. On this 
set of facts, the Municipal Court of Appeals held that the 
lease had been properly terminated. 

Yet, on the other hand, that Court would require some 
kind of language in the lease at bar to amplify the phrase 
“at any time after December 31, 1941” and that this last 
phrase does not mean what it says, unless plainer language 
is expressed. 

The Appellant acquired the property May 23, 1946, and 
between that time and August 29, 1946, did nothing to rec¬ 
ognize the Appellee’s right to continue. No rent was taken, 
and on that day notice was given. No rent was taken until 
after December 9, 1946, and only that which was overdue 
and earned to that date. The lease itself permitted the 
acceptance of rent “up to the day fixed by the notice.” 
When the second notice of December 9,1946, was given, no 
different intention or recognition was manifest by the Ap¬ 
pellant It still desired possession, and while it did not 
concede that the first notice was defective, it gave the Ap¬ 
pellee a new notice, but did not express any contrary inten¬ 
tion regarding possession, and requested the arrears rent in 
that it was earned. Expressing a continued intention to se¬ 
cure possession the tenant was not prejudiced. 

In this situation, the first pronouncement of the Municipal 
Court of Appeals (Mason v. Curro, supra), the rule that the 
notice should be liberally construed should also apply in the 
case at bar, instead of the strict construction on which the 
Municipal Court of Appeals made. 

The intent being present at least on August 29, 1946, and 
that intent not being changed, it was not unreasonable for 
the Trial Judge to hold that the notice was given within a 
reasonable time in the light of the phrase that the “Lessor 



13 


or its successor in title shall have the right to cancel and 
terminate this lease at any time after December 31,1941.” 

3. The Appellant acted reasonably in giving notice and 
was not limited to give the notice between the date of the 
contract and its consummation, but having knowledge that 
the notice might be given “at any time after December 31, 
1941 ’ ’ the notices of August 29,1946, and December 9,1946, 
was not unreasonable. 

Although the language employed indicates the notice may 
be given “at any time” certainly, when the Vendee executes 
the contract it acquired the equitable title but it did not then 
become with the signing “a successor in title.” It is clear 
that the lease did not permit the Vendee to give notice before 
consummation, that right was limited to the Lessor only, 
and when the lease was assigned and the legal title conveyed 
to the Vendee, only then did it become “a successor in title.” 
If the Lessor, for practical purposes, refused to give notice, 
under the construction made by the Municipal Court of Ap¬ 
peals, in that event, the Purchaser could never effectually 
give notice of termination, for until title to the Lease passes 
to it, it does not have the right, and if the Vendor does not 
desire or elect to give notice, because of the contractual 
rights of the parties, the Vendee would be placed at a dis¬ 
advantage in giving notice of termination, and the phrase 
“successor in title” would be meaningless. 

CONCLUSION 

It is respectfully submitted that reason impels that the 
clear and fairly plain language of the lease be given their 
normal construction and inference, and that the judgment of 
the Municipal Court of Appeals is error and should be re¬ 
versed and judgment of the trial court affirmed. 

Respectfully submitted, 

Herman Milijeb, 

Attorney for Appellant, 
800 H Street, N. W. 



APPENDIX 







INDEX TO APPENDIX 


PAGE 

Complaint _ 1 

Answer of Defendant - 2 

Motion for Summary Judgment ---- 4 

Affidavit of Nick Basiliko -- 5 

Letter of December 9, 1946 to United Cigar-Whelan Stores Cor- 

Paragraph 18 of Lease .—------ 8 

Stipulation ........ 9 

Memorandum Opinion (Municipal Court)_ 9 

Judgment —- ----- 14 

Notice of Appeal _ 14 

Opinion of Municipal Court of Appeals..... 15 

Judgment...i_ 19 




















1 


APPENDIX 


• •••••• 

2 IN THE 

MUNICIPAL COURT FOR THE DISTRICT OF 
COLUMBIA, CIVIL DIVISION, 

LANDLORD AND TENANT BRANCH 
500 Fourth Street N. W., First Floor 
Washington, D. C. 

Filed Apr 8 1947 Municipal Court District of Columbia 

Baseliko Investment Corpobation a corporation 

Plaintiff 

Bond Building Address 
vs. 

United Cigab-Whelan Stores Cobp a corporation 

Defendant 

720 - 14th St., N. W. 1400 New York Ave N. W. Address 

No. L. & T. 161962 

Complaint for Possession of Real Estate 
Distric of Columbia, 55.. 

Herman Miller, the duly authorized agent of the plain¬ 
tiff being first duly sworn, states that plaintiff is entitled to 
the possession of premises No. 720 - 14th Street N. W. being 
identical with 1400 New York Ave N. W. in Bond Bldg, at 
S. W. Cor 14th and New York Ave N. W. & basement space 
1-2 & 3 located in the District of Columbia, which the de¬ 
fendant holds without right. The premises are in posses- - 
sion of the defendant, who holds them under a terminated 
and expired lease, which the plaintiff has terminated and 
accelerated by notice as provided therein. 

The ground or grounds upon which possession is sought 
are: (Check one of the following) 

□ Defendant’s default in the payment of rent, there being 





9 


now due rent in the sum of $_for the period 

from...to_ 

x □ That possession is sought by reason of the following: 
(Explain fully). 

Commercial premises, and the defendant having been 
given written notice as provided in the lease under which 
the tenancy was established and such notice has now expired 

Affiant also states: (Check one of the following) 

□ That a notice to quit has been served upon the de¬ 
fendant as required by law; 

□ That service of a notice to quit has been specifically 
waived in writing. 

Affiant therefore says that plaintiff is entitled to judgment 
for possession of said property (and for judgment in the 

sum of $..for rent in arrears) and costs of this 

suit. 

/s/ Herman Miller 
(or Agent) 

Subscribed and sworn to before me this 4th day of April, 
1947. (Seal) /s/ Thomas J. Marcellino 

' Notary Public, D. C. 

«»•••••••• 


Filed May 6 3:50 PM ’47 

Municipal Court District of Columbia 

5 ANSWER OF DEFENDANT 

1. The premises possession of -which is sought 
herein by plaintiff were leased to defendant by written in¬ 
strument dated October 20, 1939. Said instrument pro¬ 
vided, among other things, as follows: 

In the event that Lessor shall make a bona fide con¬ 
tract for the sale of the land and building of which the 
demised premises form a part at any time during the 
term herein • • • the Lessor, or its successor in title 
shall have the right to cancel and terminate this lease 
at any time after December 21, 1941, upon Lessee re- 







a 


ceiving in its office in New York City, not less than three 
months prior notice in writing by registered mail and 
upon the date set forth in such notice, the term of this 
lease shall come to an end and expire in the same 
manner and to the same effect as though such date had 
been the date originally set forth herein for the expira¬ 
tion of the term. Lessor shall only have the right to 
cancel and terminate this lease as in this paragraph 
provided, and such cancellation shall be valid and effec¬ 
tive only upon condition that Lessor shall pay to Lessee 
in cash or acceptable certified check the sum of * * * 
$2,500.00 in cash or acceptable certified check if this 
lease be canceled at any time thereafter (1943) during 
the term herein. All payments herein agreed to be 
made by Lessor to Lessee shall be paid on or before 
sixty days after the giving of notice as aforesaid, * * *. 

2. By the terms of said lease, it was agreed that the place 
of performance of the giving of the notice to cancel and 
terminate would be the State of New York. The laws of 
that State govern the sufficiency of the notice and the suffi¬ 
ciency of the facts as to whether plaintiff had proper and 
legal grounds for the giving of the notice. Under the law 
of this District, and particularly, under the law of said 
State, the plaintiff had no grounds for giving any notice to 
defendant of cancellation and termination of said lease as 
hereinafter appears. 

3. On May 1, 1943, defendant’s original lessor sold and 
deeded said premises to The Metropolitan Museum of Art, 
a corporation. The latter corporation sold and deeded said 
premises to Sophia Cokenias on May 23,1946. Said Coken- 

ias, a straw party, deed said premises to plaintiff 
6 on May 31,1946. All of the conveyances were sub¬ 

ject to the aforsaid lease. No notice of cancella¬ 
tion and termination of said lease, as provided therein, was 
given by any of said owners or purchasers of said premises, 
prior to plaintiff’s tenure. 

4. From June 1, 1946, until March 31, 1947, defendant 
paid rent for said premises, according to the terms of said 
lease, and plaintiff so accepted the same. Thereby, de- 




T 


4 

fendant attorned to plaintiff and plaintiff became the lessor 
of defendant within the meaning of and as in said lease pro¬ 
vided. 

5. On, to wit, December 24, 1946, defendant received the 
alleged notice to cancel and terminate said lease at its New 
York office. 

6. The plaintiff has not made a bona fide contract for 
the sale of the land and building demised to defendant by 
said lease. The privilege of plaintiff to cancel and termi¬ 
nate said lease is an option and a conditional limitation. 
Neither the option of plaintiff to cancel and terminate said 
lease can be exercised, nor can the conditional limitation be 
invoked, unless and until the plaintiff shall make or shall 
have made a bona fide contract for the sale of said land and 
building. 

Whebefobe, defendant prays that this action be dis¬ 
missed, with costs to defendant. 

Bauman & Bubnett, 

600 F Street, N. W., 
Attorneys for Defendant, 

By /s/ John H. Bubnett 
John H. Burnett 


Filed May 12 8:54 AM ’47 
8 Municipal Court District of Columbia 

MOTION FOR SUMMARY JUDGMENT 

Comes now the plaintiff by its attorney and moves the 
Court to enter a judgment for possession in its favor for 
the Following reasons: 

1. That the plaintiff heretofore, to wit: August 29, 1946 
gave to the defendant notice of termination of the lease 
involved herein but because of failure to tender the 
$2,500.00 in cash or certified check because of an oversight, 
elected on December 9, 1946 to give a new notice terminat- 





o 


ing the lease as provided in paragraph 18 thereof. Such 
fact appears from the affidavit of Nick Basiliko hereto at¬ 
tached. 

2. On December 9, 1946 plaintiff served a new notice, a 
copy of which is hereto attached and made part hereof and 
to which reference is hereby made. 

3. The certified check of $2,500.00 as required by said 
paragraph 18 was submitted to the defendant within the 
time of the serving of the notice of December 9,1946 which 
was refused, as appears from the aforesaid affidavit, and a 
fact which the defendant has not dispmted or raised. 

4. The two defenses raised by the defendant are insuffi¬ 
cient. The first to the effect that the notice and its per¬ 
formance is governed the sufficiency of the notice, and the 
grounds upon which such notice are determined by the lease. 

5. The defendant does not deny that the original Lessor 
or its successor The Metropolitan Museum of Art made 
bona fide contracts of sale for the land and buildings, but 
merely limits the right to cancel only when a bona fide con¬ 
tract shall exist, and infers that after closing of the con¬ 
tract it is too late. Such is not a proper construction of the 
lease, nor is it the law in this jurisdiction. 

6. A copy of the lease is hereto attached. 

/s/ Herman Miller 
Attorney for Plaintiff 

• •••••• 


AFFIDAVIT 

10 District of Columbia, ss : 

Nick Basiliko first being duly sworn, on oath de¬ 
poses and says that he is the president of the plaintiff cor¬ 
poration, and as such he caused to be prepared a notice in 
accordance with the provisions of paragraph 18 of the lease 
herein which he served according to the provisions of said 
paragraph on to wit: December 29,1946, but due to an over- 




6 


sight the $2,500.00 cash or certified check was not sent within 
the 60 days as required thereby, and for that reason he 
caused to be prepared the notice of December 9th, 1946 
which he sent via United States Postal Service, registered 
mail, return receipt requested, for which he received a re¬ 
turn card, all being pre-paid. He further says that he has 
personal knowledge of the fact that the plaintiff corpora¬ 
tion, through himself, entered into the contract to purchase 
the property, and bona fidely paid a substantial cash pay¬ 
ment and gave other considerations for value and he says 
that the plaintiff’s purchase is a bona fide good faith pur¬ 
chase of the property. 

He further says that prior to the expiration of sixty (60) 
days of the notice to the defendant of December 9, 1946 he 
remitted the plaintiff’s certified check to the defendant in the 
sum of $2,500.00 which the defendant refused to accept. 

/s/ Nick Basiliko 

Subscribed and sworn to before me this 12 day of May 
1947. 

/s/ Allen Lewis Kay 
(Seal) Notary Public D. C. 


(Copy) 

11 Washington D. C. 

December 9, 1946 

United Cigar-Whelan Stores Corporation, 

330 West 42nd, Street, 

New York City. 

Gentlemen:— 

On August 29, 1946 we advised you that we desired to 
terminate your lease for your store in the Bond Building, 
14th, and New York Avenue N. W., Washington, D. C., which 
termination was to be effective December 1,1946. In order 
t i terminate as provided in the lease, we were required to 
remit to you $2,500.00 in a certified check or cash. However, 
through^ inadvertance and an oversignt, the said $2,500.00 


I 

was not remitted to you within the time required, and for 
that reason there may be some question as to whether the 
notice continued its effectiveness. 

Notwithstanding the above inadvertance and oversight, 
we wish to advise you that it has always been our intention 
to terminate your lease, and for that reason we are forward¬ 
ing to you the following: 

First, please remit the rent now overdue and which was 
heretofore returned to you by us. 

Second, in that we are the bona-fide purchasers of the 
Bond Building, located at 14th, and New York Avenue N. W., 
Washington D. C., in which you are leasehold tenant under 
a lease dated October 20,1939 of that part described as 720- 
14th., Street N. W., and 1400 New York Avenue N. W. in 
said Bond Building located at the Southwest corner of 14th, 
Street and New York Avenue N. W., in the District of Co¬ 
lumbia (said store premises and basement being shown out¬ 
lined in red on the plan attached to said lease and identified 
by signatures of the parties hereto and made a part thereof 
and indicated as stores one (1), two (2) and three (3) and 
basement storage spaces numbered one (1), two (2) and 
three (3) with all appurtenances appertaining thereto, and 
your lease having been assigned to us which makes us your 
landlord, we desire possession thereof. 

As such landlord we do hereby invoke the provisions and 
benefits of paragraph eighteen (18) of said lease regarding 
termination. 

Therefore, as provided by the terms of paragraph eigh¬ 
teen (18) of said lease, you are hereby given three (3) 
months notice to quit and vacate the said premises above 
described; said notice expires April 1st, 1947. 

You are further advised, in accordance with the terms of 
said paragraph eighteen (18) the sum if $2,500.00 will be 
remitted to you, either in cash or acceptable certified check 
on or before sixty (60) days after the giving you of this 
notice. 

So that there will be no ambiguity as to the date when the 




8 


said $2,500.00 will be remitted to you, you are advised that 
the same will be remitted to you, by mail, within sixty (60) 
days of the date of this letter. 

Very truly yours, 

Basiliko Investment Corporation, 
By (s) Igvin C. Breneman, 

Secretary 

• ••••••••• 

Paragraph 18 of Lease 

17 18. In the event that Lessor shall make a bona fide 

contract for the sale of the land and building of 
which the demised premises form a part at any time during 
the term herein or in the event that Lessor shall in good 
faith intend to demolish the building of which the demised 
premises form a part and shall thereafter within a reason¬ 
able time actually demolish same, the Lessor, or its succes¬ 
sor in title shall have the right to cancel and terminate this 
lease at any time after December 31, 1941 upon Lessee re¬ 
ceiving at its office in New York City, not less than three 
months prior notice in writing by registered mail and upon 
the date set forth in such notice, the term of this lease shall 
come to an end and expire in the same manner and to the 
same effect as though such date had been the date originally 
set forth herein for the expiration of the term. Lessor 
shall only have the right to cancel and terminate this lease 
as in this paragraph provided, and such cancellation shall 
be valid and effective only upon condition that Lessor shall 
pay to Lessee in cash or acceptable certified check the sum 
of Seventy-five Hundred Dollars ($7,500.00), if this lease 
is cancelled to be effective any time during the calendar 
year, 1942 or the sum of Five Thousand Dollars ($5,000.00) 
in cash or acceptable certified check, if this lease is cancelled 
to be effective any time during the calendar year 1943, and 
Twenty-five Hundred Dollars ($2,500.00) in cash or accept¬ 
able certified check if this lease is cancelled at any time 



9 


thereafter during the term herein. All payments herein 
agreed to be made by Lessor to Lessee shall be paid on or 
before sixty (60) days after the giving of notice 
18 as aforesaid, and Lessee agrees that it will pay the 
rent reserved in this lease up to the date fixed by 
any notice of cancellation for the termination thereof. The 
provisions of this paragraph shall not be construed as re¬ 
stricting the right of Lessor to possession provided for un¬ 
der Paragraph Nos. 10, 11 and 13 herein. 

Filed May 14 1947 

21-a Municipal Court District of Columbia 

It is hereby stipulated and agreed by and between 
the parties hereto (1) that all of the facts set forth in the 
sworn pleadings herein are true (2) that all exhibits may be 
considered by the Court as in evidence in this case (3) that 
the Court may decide this case upon the pleadings herein 
and enter judgment thereon. 

/s/ Herman Miller 
Attorney for Plaintiff 
/s/ John H. Burnett 
Attorney for Defendant 

IN THE MUNICIPAL COUBT FOB THE DIS- 
22 TBICT OF COLUMBIA CIVIL DIVISION 
Filed Jun 10 2 56 PM ’47 
Municipal Court District of Columbia 

L. and T. NO. 161-962 

Basiliko Investment Corporation, A Corporation, 

Plaintiff 

v. 

United Cigar- Whelan Stores, A Corporation, 

Defendant 

MEMOBANDUM OPINION 
This is a suit for possession of commercial property held 



10 


under a lease. The lease, which covers the term commencing 
December 1, 1939, and expiring December 31, 1949 at mid¬ 
night, was entered into by and between the Defendant as 
Lessee, and the Equitable Building Company, the then 
owner, as Lessor. The Plaintiff, Basiliko Investment Cor¬ 
poration, is the present owner, having acquired title and 
beeti assigned the lease through grantees of the one-time 
owner and original Lessor, Equitable Building Company. 
After the sale of the property in question and assignment of 
the lease in issue to the Plaintiff, the Defendant attorned to 
him. Moreover, by the terms of the lease itself, all pro¬ 
visions therein are stated as binding on inter alios all suc¬ 
cessors, assigns, etc. and in Paragraph 19 of the lease the 
relationship created by the instrument is stated to be that 
of Landlord and Tenant. 

The whole case was submitted for decision by both parties 
on the following stipulation: 

“It is hereby stipulated and agreed by and between 
1 the parties hereto (1) that all of the facts set forth in 
i the sworn pleadings herein are true (2) that all exhibits 
may be considered by the Court as in evidence in this 
case (3) that the Court may decide this case upon the 
pleadings herein and enter judgment thereon. 

s/ Herman Miller 
Attorney for plaintiff 
s/ John H. Burnett 

i Attorney for defendant” 

23 The joinder of issue is primarily concerned with an 
interpretation of paragraph 18 of the lease, which 
reads as follows: 

“ iS. In the event that Lessor shall make a bona fide 
contract for the sale of the land and building of which 
the demised premises form a part at any time during 
the term herein or in the event that Lessor shall in good 
faith intend to demolish the building of which the de¬ 
mised premises form a part and shall thereafter within 
a reasonable time actually demolish same, the Lessor, 
or its successor in title shall have the right to cancel 


11 


and terminate this lease at any time after December 31, 
1941 upon Lessee receiving at its office in New York 
City, not less than three months prior notice in writing 
by registered mail and upon the date set forth in such 
notice, the term of this lease shall come to an end and 
expire in the same manner and to the same effect as 
though such date had been the date originally set forth 
herein for the expiration of the term. Lessor shall only 
have the right to cancel and terminate this lease as in 
this paragraph provided, and such cancellation shall be 
valid and effective only upon condition that Lessor shall 
pay to Lessee in cash or acceptable certified check the 
sum of Seventy-five Hundred Dollars ($7,500.), if this 
lease is cancelled to be effective any time during the 
calendar year, 1942 or the sum of Five Thousand-Dol¬ 
lars ($5,000.00) in cash or acceptable certified check, 
if this lease is cancelled to be effective any time during 
the calendar year 1943, and Twenty-five Hundred Dol¬ 
lars ($2,500.00) in cash or acceptable certified check if 
this lease is cancelled at any time thereafter during the 
term herein. All payments herein agreed to be made 
by Lessor to Lessee shall be paid on or before sixty 
(60) days after the giving of notice as aforesaid, and 
Lessee agrees that it will pay the rent reserved in this 
lease up to the date fixed by any notice of cancellation 
for the termination thereof. The provisions of this 
paragraph shall not be construed as restricting the right 
of Lessor to possession provided for under Paragraph 
Nos. 10,11 and 13 herein.’* 

In regard to this paragraph the following facts as gar¬ 
nered from the record should be noted: 

1. The Basiliko Investment Corporation purchased the 
property in question on May 31, 1946; the lease in question 
was assigned to the Basiliko Investment Corporation under 
date of June 3,1946. 

2. On August 29, 1946, the Plaintiff, Basiliko Investment 
Corporation, undertook to give the Defendant, United 
Cigar-Whelan Stores Corporation, the three (3) months 
notice as required by paragraph 18. It stipulated that 
through an oversight the Plaintiff did not tender to the De- 


12 


fendant the required $2,500.00 within the sixty (60) day 
period set forth in the agreement. 

3. On December 9,1946, the Plaintiff served a new three 
(3) months notice upon the Defendant and tendered the 
$2,500.00 within the time limit. 

24 Defendant claims the notice of December 9, 1946 
comes too late. Plaintiff contends it is a valid and 
effective notice. The Plaintiff has filed a Motion for a Sum¬ 
mary Judgment. 

The Court regards the following excerpt from paragraph 
18 as the portion thereof germane to the controversy be¬ 
tween the parties: 

“18. In the event that Lessor shall make a bona fide 
contract for the sale of the land and building of which 
the demised premises form a part at any time during 
the term herein . .. the Lessor, or its successor in title 
shall have the right to cancel and terminate this lease 
at any time after December 31, 1941 upon Lessee re¬ 
ceiving at its office in New York City, not less than 
three months prior notice in writing by registered mail 
and upon the date set forth in such notice, the term of 
this lease shall come to an end and expire in the same 
manner and to the same effect as though such date had 
been the date originally set forth herein for the expira¬ 
tion of the term. Lessor shall only have the right to 
cancel and terminate this lease as in this paragraph 
provided, and such cancellation shall be valid and 
effective only upon condition that Lessor shall pay to 
Lessee in cash or acceptable certified check the sum of 
... Twenty-five Hundred Dollars ($2,500.00) in cash or 
acceptable certified check if this lease is cancelled at 
any time thereafter during the term herein. All pay¬ 
ments herein agreed to be made by Lessor to Lessee 
shall be paid on or before sixty (60) days after the giv¬ 
ing of notice as aforesaid. ...” 

This is not a situation where the notice to terminate may 
be given by seller only (cf Mason v. Curro, D. C. Mun. App. 
41 A. (2d) 164). Here the notice to terminate may be given 
by “Lessor, or its successor in title ....” There is no ques- 



13 


tion, therefore, that the Basiliko Investment Corporation is 
a “successor in title” authorized to give notice. The ques¬ 
tion, however, which presents itself is the timeliness of the 
notice. It cannot be doubted that had the Basiliko Invest¬ 
ment Corporation given an otherwise complete notice on 
June 3 or June 4,1946, the lease would have been terminated. 
Paragraph 18, to reiterate, states that upon certain grounds, 
as aforementioned, the lease can be terminated “at any 
time after December 31, 1941”, upon fulfilling the therein 
stated procedure. 

In interpreting the use of the phrase “at any time ” in 
similar instruments and under similar sets of circumstances, 
other Courts have held that the phrase “at any time” means 
“within a reasonable time”. What constitutes “a reason¬ 
able time” is ordinarily a question of fact. After due con¬ 
sideration of all the facts and circumstances as stipulated 
by the parties, the Court finds as a fact that the 
25 otherwise complete notice of December 9,1946 was 
given “within a reasonable time” and that it is, 
therefore, an effective notice as provided for in paragraph 
18 of the lease. 

The Court, therefore, grants the motion of the Plaintiff 
for a summary judgment. 

Dated: June 10th 1947. 

Thomas Dewey Quinn 

Judge 



14 


26 SESSION RESUMED 


Minutes 155: 
Page 201: 


Thursday, June 12, 1947 
Judge Quinn 


Basiliko Investment Corporation, a corporation, 

Plaintiff 


vs. 

United Cigar-Whelan Stores Corp., a corporation, 

Defendant 

No. L. & T. 161,962 

Upon consideration of plaintiff’s motion for summary 
judgment, filed herein May 12, 1947, it is ordered and the 
same is hereby, granted. 

Further, Judgment for plaintiff for possession of prem¬ 
ises #720 14th Street, N. W. being identical with 1400 New 
York Ave., N. W. in Bond Bldg, at S. W. Cor. 14th and New 
York Ave., N. W. and basement space 1,2 & 3, in the District 
of Columbia, and costs; and have execution thereof. 


IN THE MUNICIPAL COURT FOR THE DIS- 
27 TRICT OF COLUMBIA CIVIL DIVISION 
Filed Jun 16 9:29 AM ’47 
Municipal Court District of Columbia 

L. and T. No. 151-962 


Basiliko Investment Corporation, A Corporation, 

Plaintiff, 


United Cigar-Whelan Stores Corp., A Corporation, 

Defendant. 

NOTICE OF APPEAL 


Notice is hereby given that United Cigar-Whelan Stores 
Corp., appeals to The Municipal Court of Appeals for the 
District of Columbia from the judgment of this court en¬ 
tered on the 12th day of June, 1947. 




15 


Name and address of attorney to be served: 

Herman Miller, 

800 H Street, N. W. 

Bauman & Burnett, 

600 F Street, N. W. 
Attorneys for Defendant, 
By /s/ John H. Burnett 
John H. Burnett 

June 16, 1947 

Copy of Notice of Appeal 

Mailed to Herman Miller, Esq., 

800 H Street, N. W., Wash. D. C. 

/s/C. A. Clements 
C. A. Clements 
Deputy Clerk 




THE MUNICIPAL COURT OF APPEALS 
33 FOR THE DISTRICT OF COLUMBIA 

No. 534 

United Cigar-Whelan Stores Corp., a corporation, 

APPELLANT, 

V. 

Basiliko Investment Corporation, a corporation, 

APPELLEE. 

Appeal from The Municipal Court for the 
District of Columbia, 

Civil Division. 

(Argued August 18, 1947 Decided September 10, 1947) 
John H. Burnett, with whom Chapin B. Bauman was on 
the brief, for appellant. 

Herman Miller for appellee. 

Before Cayton, Chief Judge, and Hood and Clagett, As¬ 
sociate Judges. 

Hood, Associate Judge: In 1939 appellant, United Cigar- 
Whelan Stores Corporation, leased from Equitable Building 


16 


Company store space in the Bond Building located at Four- 
teenth Street and New York Avenue. The lease provided 
for a term beginning December 1, 1939, and ending Decem¬ 
ber 31, 1949. Paragraph numbered 18 of the lease pro¬ 
vided: 


“18. In the event that Lessor shall make a bona fide 
contract for the sale of the land and building of which 
the demised premises form a part at any time during 
the term herein or in the event that Lessor shall in good 
faith intend to demolish the building of which the 
demised premises form a part and shall thereafter 
1 within a reasonable time actually demolish same, the 
Lessor, or its successor in title shall have tibie right to 
cancel and terminate this lease at any time after De¬ 
cember 31, 1941, upon Lessee receiving at its office in 
' New York City, not less than three months prior notice 
in writing by registered mail and upon the date set 
forth in such notice, the term of this lease shall come 
to an end and expire in the same manner and to the 
same effect as though such date had been the date 
originally set forth herein for the expiration of the 
term. Lessor shall only have the right to cancel and 
terminate this lease as in this paragraph provided, and 
such cancellation shall be valid and effective only upon 
condition that Lessor shall pay to Lessee in cash or 
acceptable certified check the sum of Seventy-five Hun¬ 
dred Dollars ($7,500.00), if this lease is cancelled to be 
effective any time during the calendar year, 1942 or the 
sum of Five Thousand Dollars ($5,000.00) in cash or 
acceptable certified check, if this lease is cancelled to be 
effective any time during the calendar year 1943, and 
Twenty-five Hundred Dollars ($2,500.00) in cash or 
acceptable certified check if this lease is cancelled at 
any time thereafter during the term herein. All pay¬ 
ments herein agreed to be made by Lessor to Lessee 
shall be paid on or before sixty (60) days after the giv¬ 
ing of notice as aforesaid, and Lessee agrees that it will 
pay the rent reserved in this lease up to the date fixed 
by any notice of cancellation for the termination there¬ 
of. The provisions of this paragraph shall not be con¬ 
strued as restricting the right of Lessor to possession 
provided for under Paragraph Nos. 10, 11 and 13 
herein.” 






17 


On May 1, 1943, Equitable Building Company conveyed 
the property to The Metropolitan Museum of Art which on 
May 23, 1946, conveyed to Sophia Cokenias, a straw party, 
who on May 31, conveyed to appellee, Basiliko Investment 
Corporation. No notice of cancellation of appellant’s lease 
under the above-quoted paragraph was given by any owner 
or purchaser until August 29,1946, when appellee sent such 
a notice. On December 9,1946, appellee sent a second notice 
of cancellation, stating that the second notice was given be¬ 
cause following the first notice appellee had failed to pay to 
appellant the $2,500 within the time required by said para¬ 
graph 18 of the lease. Within sixty days after giving the 
second notice appellee sent a certified check for $2,500 to 
appellant who refused to accept it. From June 1, 1946, 
until March 31, 1947, appellant paid rent according to the 
terms of the lease and appellee accepted the same. On April 
8,1947, appellee brought suit for possession and thereafter 
obtained judgment. From that judgment this appeal was 
taken. 

Although appellant has assigned as error certain pro¬ 
cedural matters, in our view of the case the only question 
presented is whether the notice of December 9,1946, effected 
a cancellation of the lease under the provisions of para¬ 
graph 18. 

Appellee’s contention is that it was a bona fide purchaser 
and therefore a successor in title, and that since its purchase 
was subsequent to December 31, 1941, under the terms of 
paragraph 18 it had the right to cancel the lease at any time. 
The trial court accepted this contention, with the qualifica¬ 
tion that “at any time” be interpreted as meaning “within 
a reasonable time ’ ’; and held that the notice of December 9, 
1946, was given within a reasonable time and was therefore 
effective to cancel the lease. We do not agree with either 
appellee or the trial court. Appellee’s contention is, in 
effect, that upon its purchase of the property the term lease 
was automatically converted into a lease terminable at the 
will of the landlord on three months’ notice. Had this been 


18 


the intention of the parties, it surely would have been ex¬ 
pressed in plainer language. The position of the trial court 
was that upon purchase of the property the new owner could 
accept the lease as valid and binding on the tenant, reserv¬ 
ing to itself the right to decide within a reasonable time (in 
this case a period of over six months) whether to continue 
the lease or oust the tenant. This position, we think, is 
contrary to the meaning of the paragraph in question. 

In our opinion paragraph 18 of the lease, which was a 
qualification of an express term of ten years and one month, 1 
assured the tenant of a term of two years and one month 
but provided that the remainder of the term could be can¬ 
celled in the event the property was sold and the new owner 
desired possession.- Notice of cancellation could be given 
either by the seller or the seller’s “successor in title,” i. e., 
the purchaser. If notice was given by the seller it had to be 
given prior to completion of sale, for after sale was com¬ 
pleted the seller no longer had any interest in the property 
or the tenancy. If notice was given by the purchaser it had 
to be given at time of completion of the sale or at least prior 
to any act on the part of the purchaser which recognized the 
existence and continuation of the tenancy. Upon acquiring 
title the new owner had the right to recognize the lease and 
accept the tenant or to give notice of cancellation. The 
purchaser could take the property subject to the lease or 
subject to cancellation of the lease but he could not do both. 
He was required to make a choice. He could make that 
choice at any time he made the purchase but not at any time 
after he made the purchase. The reasonable time for the 
purchaser to determine his course of conduct with respect 

1 The habendum clause reads: “TO HAVE AND TO HOLD the demised 
premises unto Lessee, its successors or assigns for the term commencing 
December 1, 1939 and expiring December 31, 1949 at midnight.” Para¬ 
graph 20 provided: “And Lessor doth covenant that Lessee on paying the 
said yearly rent and performing the covenants aforesaid, shall and may 
peaceably and quietly have, hold and enjoy the demised premises for the 
term aforesaid.” 

s Paragraph 21 provided: “And it is further understood and agreed 
that the covenants and agreements contained in the foregoing lease are 
binding upon the parties hereto and their respective heirs, administra¬ 
tors, successors, legal representatives and assigns.” 


19 


to the lease was the period between making the contract to 
buy and consummating the contract. When he took title he 
took it subject to the lease or free from the lease. He had 
no right to accept the tenancy on the condition that it could 
be cancelled when, as and if he desired. 

In the instant case appellee waited nearly three months 
after the property was conveyed to it before attempting to 
give notice of cancellation. It was then too late. 3 Failure 
to give notice and acceptance of rent for three months con¬ 
stituted acceptance of the lease. 

Reversed. 

34 WEDNESDAY, SEPTEMBER 10, 1947 

The Court met pursuant to adjournment. Present: 
The Honorable Nathan Cayton, Chief Judge, and Andrew 
M. Hood and Brice Clagett, Associate Judges. 
Proclamation being made, the Court is opened. 

• ••••••••• 


United Cigar-Whelan Stores Corp., 
A Corporation, Appellant , 


v. 

Baseliko Investment Corporation, 

A Corporation, Appellee. 

No. 534. October Term, 1946. 

Appeal from the Municipal Court for the District of 
Columbia, Civil Division. This cause came on to be heard 
on the transcript of the record from the Municipal Court 
for the District of Columbia, and was argued by counsel. 
On consideration whereof, It is now here ordered and ad¬ 
judged by this Court that the judgment of the said Munici¬ 
pal Court, in this cause, be and the same is hereby, reversed 
with costs, and that this cause be, and it is hereby, remanded 

* Hotel Dauphin, Inc. v. Remey, 53 N. Y. S. 2d 301 ; Butler & Herman 
Co. v. Meth, 122 N. Y. S. 271; Fallek v. Cramer, (K. C. Ct. App., Mo.) 
191 S. W. 2d 375. 



20 

to the said Municipal Court for further proceedings in ac¬ 
cordance with the opinion of this Court. 

Andrew M. Hood, 
Associate Judge 
September 10, 1947. 










No. 9647 

BRIEF OF APPELLEE 


ZSntteb States Court 

of Appeals 

District of Colum 

BIA 

Basiliko Investment Cor 

1 

I 

PO RATION, 

a corporation, Appellant , 

V. 

I 

1 


United Cigar-Whelan Stores Corp., 
a corporation, Appellee. 


_ 

i 

i 

I 

Appeal From the Municipal Court of Appeals for the 

District of Columbia 


Usifezi States Court of Appm/s 

f9r the District of Columbia 

fiLED mR - 1S48 

CLERK 



Chapin B. Bauman, 

John IJ. Burnett, 

600 F Street, N. W. 
Washington 4, D. C. 
Attorneys for AppeUee. 


Wilson - E>*s Printing Co. . re 0003 - Washington i. D. C- 






INDEX 

Topics 


PAGE 


Counter Statement of the Case. 1 

Summary of Argument. 2 

Argument ... 4 


1. Purpose and effect of the Cancellation Clause 5 

2. Where the Place of Performanc of a “Con¬ 
tractual Provision” is a Foreign Jurisdiction, 
the Decisions of that Jurisdiction Govern the 


Construction of that Provision. 6 

3. The New York Buie. S 

4. The Rule in Maryland, Oregon, Kentucky, 

Missouri and Illinois. 11 

5. The Phrase “At Any Time”. 18 

6. The Stipulated Facts Do Not Support the 

Memorandum Opinion of the Trial Court. 22 

Conclusion . 22 


Cases 

Butler & Herman Co. v. Meth, 122 N. Y. S. 271.3, 8 

Bruder v. Crafts & D. Co., 139 N. Y. S. 307,79 Misc. 88.. 3,10 

Cleveland Wrecking Co. v. Aetna Oil Co., 387 Ky. 542, 

154 S. W. 2d 31,137 A. L. R. 352.3,13,18 

Cooper v. Gambrill, 146 Ala. 184,40 So. 827.3, 5 

Fallek v. Cramer, — Mo. App. —, 191 S. W. 2d 375.3,14 

Furio, Petition of, 72 N. Y. S. 2d 425, 272 App. Div. 941 3 

Gates v. Norton, 228 Ill. App. 96.3, 10,15 

Gostin v. Needle, — Md. —, 45 At. 2d 772_3,11,18 

















ii INDEX (Continued) 

PAGE 

Hotel Dauphin Inc. v. Remey, 53 N. Y. S. 2d 301. 10 

Krim Realty Co. v. Yarveri, 161 N. Y. S. 229, 97 Misc. 

407.3, 10 

Louis-Dreyfuss v. Patterson Steamships, (C. C. A. 2, 

L. Hand, J.) 43 F. 2d 824, 826.4, 7 

Mason v. Curro (Mun. Ct. App.) 73 W. L. R. 219, 41 
At. 2d 164.3, 6 

Helen Inc. v. Acme Litho Graining, Inc., 69 N. Y. S. 

2d 647.3, 10 

MeClung v. McPherson, 47 Or. 73, 81 Pac. 567, 82 Pac. 

13. 3, 12 

Payne v. Brathwaite, 185 N. Y. S. 107,113 Misc. 517.. 3, 9,18 

Scudder v. Union Nat. Bk., 91 U. S. 406, 412-3, 23 L. 

Ed. 245.4, 7 

Text 

32 American Jurisprudence 709 . 21 

Restatement of the Law, Conflict of Laws, Sec. 35S, 339.. 4, 7 

















©niteb States Court of Appeals 

District of Columbia 


No. 9647 


Basiliko Investment Corporation, 

a corporation, Appellant, 

v. 

United Cigar-Whelan Stores Corp., 

a corporation, Appellee. 


BRIEF OF APPELLEE 


COUNTER STATEMENT OF THE CASE 


The trial court decided this case on the stipulation that 
all of the facts in the sworn pleadings were true and that 
all exhibits might be considered as admitted in evidence. 
(R. 21 A.) The Appendix of appellant (plaintiff below, 
and hereinafter so designated), fails to disclose that the 
Answer of Defendant (appellee) (App. 2-4) was sworn to. 1 


1 The jurat and oath are as follows: 

STATE OF NEW YORK, 

COUNTY OF NEW YORK, 
to-wit : 

Harry Rubenoff, being first duly sworn, deposes and says that he is 
the agent and Vice President of the defendant corporation; that he has 
read the foregoing answer and that he verily believes the allegations 
therein set fortii to be true. 

/$/ HARRY RUBENOFF 

Subscribed and sworn to before me this 1st day of May, 1947. 

/s/ A. M. L. REILLY 
Notary Public 
(Transcript of Record, 7) 




2 


Each time the leased property was sold, the owner trans¬ 
ferred and assigned the lease to the purchaser. 2 

The record shows that the appellee, defendant below, 
(and hereinafter so designated), paid rent to plaintiff for 
the months of June, July and August, 1946, according to 
the terms of the lease and plaintiff so accepted the same. 
(App. 3). It was not until the defendant tendered the rent 
for September, 1946, that the plaintiff refused to accept 
rent for that month. Rent for September, October, No¬ 
vember and December, 1946, was tendered to plaintiff and 
refused. Then, on December 9, 1946, when plaintiff gave 
its second notice of cancellation, plaintiff demanded the 
rent for those four months. It was promptly paid. There¬ 
after, each month’s rent was paid and accepted, under the 
terms of the lease, to and including March 31, 1947. 
(App. 3). 

Otherwise, appellant’s Statement of the Case is satisfac¬ 
tory. 


SUMMARY OF ARGUMENT 

The purpose and effect of the cancellation and termina¬ 
tion clause in this lease was twofold: (1) to enable the own¬ 
er of the property to sell more easily, if he wished to do so, 
and (2) to give the purchaser the option either to con¬ 
tinue the lease or to have possession, either for his own 


2 For value received, we hereby assign and set over unto THE 
METROPOLITAN MUSEUM OF ART and * * * all our right, title and 
interest in the within agreement. EQUITABLE BLDG. CO. 

/s/ A. J. Bitterly, Secretary. 

June 3, 1946. 

For value received, we hereby assign and set over unto BASILIKO 
INVESTMENT CORP. all our right, title and interest in the within 
agreement. 

THE METROPOLITAN MUSEUM OF ART, 
/s/ J. K. Loughry, 

Assistant Treasurer 
THE MUNSEY TRUST COMPANY 
i /s/ F. W. Stoever, 

Real Estate Officer. 

(Transcript of Record 20) 





3 


benefit or that he might obtain an advanced rental. Cooper 
v. Gambrill, 146 Ala. 184,186, 40 So. 827; Gostin v. Needle, 
— Md. —, 45 At. 2d 772, 774; Gates v. Norton, 228 Ill. App. 
96, 99. 

By the terms of par. IS of the lease (App. S) the right 
to cancel and terminate the lease was lodged in the lessor- 
owner of the property as well as in the purchaser. When 
the lessor-owner made a bona fide contract to sell the prop¬ 
erty, its right to give a notice of cancellation and termina¬ 
tion then accrued. (That right was never exercised, App. 3). 
When the purchaser of the property entered upon his ten¬ 
ure of the property, the purchaser had the option either to 
take the property subject to the lease, (that is, to recognize 
it and to accept the tenant) or (2) to give notice of cancel¬ 
lation. He could not do both. In the case at bar, the pur¬ 
chaser recognized the lease by accepting rent thereunder. 
Therefore, he could not cancel and terminate the lease 
until he, in turn, made a bona fide contract for the sale of 
the land. Gates v. Norton, 228 HI. App. 96, 99; Cleveland 
Wrecking Co. v. Aetna Oil Co., 287 Ky. 542, 550, 154 S. W. 
2d 31, 137 A. L. R. 352; Gosten v. Needle, — Md. —, 45 
At. 2d 772, 774; FaUek v. Cramer, — Mo. App. —, 191 S. W. 
2d 375, 377; Butler & Hermcm Co. v. Meth, 122 N. Y. S. 271, 
273; Bruder v. Crafts & D. Co., 139 N. Y. S. 307, 79 Misc. 
88; Krim Realty Co. v. Varveri, 161 N. Y. S. 229, 97 Misc. 
407; Payne v. Braitlmaite, 185 N. Y. S. 107, 113 Misc. 517; 
Petition of Furio (1947), 72 N. Y. S. 2d 425, 272 App. 
Div. 425; John Helen, Inc. v. Acme Litho Graining, Inc., 
(Sup. Ct. App. Term), (1947) 69 N. Y. S. 2d 647; McClung 
v. McPherson, 47 Or. 73, 81 Pac. 567, 82 Pac. 213. 

The notice to be given under the cancellation and termi¬ 
nation clause of this lease was not the statutory notice to 
quit. It was a contractual provision for ending the fixed 
term of the lease. Mason v. Curro, (Mun. Ct. App), 41 At. 
2d 164,165, 73 W. L. R. 219. 




4 


The lease expressly provided that the notice of cancella¬ 
tion and termination, that is, the contractual provision, had 
to be given at the lessee’s office in New York City. Where 
the place of performance of a contractual provision is a 
foreign jurisdiction, the decisions of the Court of that 
jurisdiction govern the construction of that provision. 
Scudder v. Union Nat. Bk., 91 U. S. 406, 412, 23 L. Ed. 
245; Louis-Dreyfuss v. Patterson Steamships, (C. C. A. 2 
L. Hand, J.) 43 F. 2d 824, 826); Restatement of the Law, 
Conflict of Laws, sec. 358, 359. 

But every New York decision supports the lessee’s con¬ 
tention, (N. Y. cases, above), and the opinion of the Mu¬ 
nicipal Court of Appeals. Therefore, there was no error 
by that court. 

In every jurisdiction in which the question now before 
this court has been passed upon, the courts have consist¬ 
ently denied appellant’s argument and have unanimously 
sustained the position of appellee. 

The question decided by the Municipal Court of Appeals 
is neither new nor novel. It is universal. 

The rule of law announced by the Municipal Court of 
Appeals in this case has never been held to be otherwise 
by any of the State courts reviewing that question. 

ARGUMENT 

The appellant was plaintiff, below, and appellee was 
defendant. They will be so designated hereafter. 

At the outset of the argument, we think it best to point 
out to the Court the situation with which we are not 
concerned. 

First, this is not a case where the original Lessor gave 
notice of cancellation. 





5 


Second, this is not a case where the lease provided that 
a notice of cancellation could be given in the event of a 
sale of the premises. 

Third, this is not a case where a successor in title, or an 
assignee of the lease and premises, gave notice of cancella¬ 
tion and did not accept rent from the tenant named in the 
lease. 

This is a case where the successor in title to the original 
Lessor accepted rent for seven months after the premises 
were sold and deeded to it 

Under such circumstances, (1) the defendant attorned to 
plaintiff, (2) the plaintiff recognized defendant as its 
tenant under the terms of the lease, (3) the plaintiff be¬ 
came the “Lessor” in the lease and could cancel only in 
the event it made a contract for sale of the premises, (4) 
the plaintiff waived its right, if any it had, to enforce 
cancellation and termination of the lease, unless and until 
it made a “contract for the sale” of the leased premises. 

1. Purpose and Effect of the Cancellation Clause. 

Before we can properly appreciate the rule we seek to 
invoke, it is respectfully submitted that we should first 
acquaint the Court with the legal background of the liti¬ 
gation surrounding the question to be discussed. Thus, 
we learn why cancellation clauses are placed in leases. 

The reason is clearly stated in the Cooper Case, cited 
supra, (146 Ala. 186): 

The agreement in the lease for a surrender of pos¬ 
session within a reasonable time, if required, upon 
sale of the property, was inserted to enable the owner 
to more easily sell, if he wished to do so; and it was 
likewise for the benefit of the purchaser, giving him 
the option either to continue the lease and receive the 
rents as a return on his investment, or to have posses¬ 
sion, either for his own use or that he might obtain 
an advanced rental. 




6 


To same effect: Gostin v. Needle, (Md.) 45 At. 2d 772, 
774, quoted post; Gates v. Norton, 228 Ill. App. 96, 99, 
quoted post. 

2. Where the Place of Performance of a “Contractual 
Provision 7 ’ is a Foreign Jurisdiction, the Decisions 
of the Court of That Jurisdiction Govern Construction 
of That Provision. 

Let us first consider the case of Mason v. Curro, Munici¬ 
pal Court App. (73 W. L. R. 219), 41 At. 2d 164. At p. 165 
of the opinion, the late Chief Judge, speaking for the Court, 
said : 

! (1-7) Whether a notice may be given by the pur¬ 

chaser or must be the act of the vendor where the 
lease so provides is a matter of conflicting opinion. 
(Payne v. Braithwaite, 113 Misc. 517,185 N. Y. S. 107; 
Gates v. Norton, 228 Ill. App. 96; Gorman v. General 
Outdoor Adv. Co., 320 Ill. App. 339, 50 N. E. 2d, 854; 
Cooper v. Gambrill, 146 Ala. 184, 40 So. 827. See 32 
Am. Jur., “Landlord and Tenant,” Sec. 837 and Anno¬ 
tations 35 A. L. R. 518, 116 A. L. R. 931; see also 
Parkway Baking Co. v. Fruehauf Trailer Co., 351 Pa. 
1 82, 40 At. 2d 268). It is, however, unnecessary for us 
to consider the question here, because we hold that the 
lessor’s letter to the appellant, 'with its enclosures, was 
an adequate substantial compliance of the lease. (Ital¬ 
ics supplied.) 

The first part of that quotation is plainly obiter dicta. 
However, we feel that we should point out to the Court 
that the Gorman, Cooper and Parkway Baking Cases, cited 
therein, were decided on facts totally different than those 
now before this Court. They were not cases where, after 
the tenant paid rent and attorned to the “successor in 
title” to the lease, the latter sought to cancel the lease 
although it had made no “contract for the sale” of the 
premises. The balance of the authorities cited in the 
Mason Case sustain the defendant’s contention. 




7 


However, in the Mason Case, the Court expressly held 
that a notice of cancellation of a lease, upon sale by the 
lessor (41 At. 2d 165) 

# * * was not the statutory* notice to quit. The de¬ 
sire to terminate, so communicated, was a contractual 
provision for ending the fixed term of the lease. 
(Italics supplied.) 

Thus, it is definitely established that the notice of can¬ 
cellation, as provided for in par. 18 of our lease, w*as a 
“contractual provision.” But it also was a “contractual 
provision” which had to be performed in New York. Par. 
18 unequivocally states that cancellation was only effective 
“upon Lessee receiving at its New York City office, not 
less than three months’ prior notice in writing by regis¬ 
tered mail, etc.” 

We appreciate that the lex loci of the lease contract and 
of the demised premises generally governs the legal con¬ 
struction of lease clauses. But, where the terms of the 
contract direct that the “contractual provision” be per¬ 
formed in a jurisdiction foreign to place of contract and 
of the property, then, the law of the foreign jurisdiction 
governs the legal construction to be given to that pro¬ 
vision of the lease. 

The general rule upon this point is laid down in Scudder 
v. Union National Bank, 91 U. S. 406, 412-3, 23 L. Ed. 245, 
as follows: 

Matters bearing upon the execution, the interpre¬ 
tation, and the validity of a contract are determined 
by the law of the place where the contract is made. 
Matters connected with its performance are regulated 
by the law prevailing at the place of performance. 
(Italics supplied.) 

See also: Louis-Dreyfuss v. Patterson Steamships, 
(C. C. A. 2, L. Hand, J.), 43 F. 2d 824, 826 et seq. 

In Sec. 358, Conflict of Laws, Restatement of the Law, 
we find: 



8 


The duty for the performance of which a party to 
a contract is bound will be discharged by compliance 
with the law of the place of performance of the prom¬ 
ise with respect to: 

(a) the manner of performance; 

(b) the time and locality of performance; 

(c) the person or persons by whom or to whom per¬ 
formance shall be made or rendered; 

(d) the sufficiency of performance; 

(e) excuse for non-performance. 

» • • 

i 

Sec. 359. The law of the place of performance or 
happening of a condition or of the exercise of an 
option in a contract governs the performance of the 
condition or exercise of the option. 

Since the option of the lessor to cancel had to be exer¬ 
cised in the State of New York, the law of New York, 
as determined by its courts, is binding in this case. 

3. The New York Rule. 

In Butler & Herman Co. v. Meth, (Sup. Ct. App. Term), 
122 N. Y. S. 271, the lease did not particularly specify who 
was to give the notice of its termination in event of the 
sale of the premises, but it did contain a provision making 
the covenants and agreements of the lease binding on the 
“successors and assigns” of the parties thereto. After 
sale by the original landlord, the tenant paid rent to the 
assignee on August 4th and August 15th, 1909. On August 
12th, 1909, the notice of termination of the lease was 
served and summary proceedings to dispossess were begun. 
The trial court gave judgment for plaintiff. The Appellate 
Term ( Seabury , Lehman and Gavigan, JJ.) reversed, say¬ 
ing, p. 273: 

* * # By the terms of the “Fourth” paragraph it 
is agreed that “in the event of sale” the term demised 
“shall cease and be determined upon fifteen days 
notice to the tenant.” The landlord did not give the 
required notice, or elect to terminate the lease. The 



9 


tenant paid the rent to the new landlord, who accepted 
it. The tenant thus “attorned” to the new landlord, if 
it is still permissible to use this term. Commonwealth 
Mortgage Co. v. DeWaltoff, 135 App. Div. 33, 119 
N. Y. S. 781. Under the original lease and the exten¬ 
sion agreement, the conventional relation of landlord 
and tenant existed between the parties to this proceed¬ 
ing. That relation was established upon the basis of 
the original lease and the extension agreement. When 
this relation was established, all the terms of the origi¬ 
nal lease and the extension agreement were in full 
operation, and the tenant held the premises for the 
term therein demised upon the covenants therein speci¬ 
fied. 

The “Fourth” paragraph did not mean that the 
landlord could arbitrarily terminate the term demised, 
simply upon giving 15 days’ notice to the tenant. It 
meant, what it plainly said, that the tenancy could be 
terminated “in the event of sale”, provided that 15 
days’ notice of sale was given the tenant in the man¬ 
ner prescribed. The demise was thus given upon a 
limitation by which the term was to expire in the 
event of a sale and upon giving the required notice 
in the manner prescribed. In selling the premises 
without giving the required notice, the landlord waived 
the right to insist that the tenant should forfeit his 
lease. By the acceptance of rent the same relation 
existed between the new owner and tenant that had 
previously existed between the original landlord and 
the tenant. Unless the event happened, viz., a sale 
and proper notice thereof, the estate of the tenant 
would not terminate until the expiration of the time 
stipulated in the extension agreement. No sale of the 
premises took place after the tenant paid the rent to 
the new landlord and in the absence of such a sale the 
latter had no right to terminate the estate of the tenant 
simply by serving a notice that on and after a certain 
day his lease would become “null and void.” (Italics 
supplied.) 

In Payne v. Braithwaite (Sup. Ct., App. Term), 185 
N. Y. S. 107, (113 Misc. 517), the lease contained the pro¬ 
vision that 





10 


1 The lessor shall have the privilege of terminating 
the within lease at any time in the event of a sale of 
the premises, by giving sixty (60) days’ notice in 
writing. 

The court held that the purchaser of the premises could 
not give a valid notice of termination of the lease until 
she made a sale of the premises. 

See also: Krim Realty Co. v. Varveri, (Sup. Ct. App. 
Term), 161 N. Y. S. 229, 97 Misc. 407, cited and quoted in 
FaUek v. Cramer, — Mo. App. —, 191 S. W. 2d 375, post; 

Bruder v. Crafts & D. Co. (Sup. Ct. App. Term), 139 
N. Y. S. 307, 79 Misc. SS, where the Court held that when 
the “assignee accepted them (the premises) subject to the 
lease, the purpose of this clause had ceased.” 

In Hotel Dauphin Inc. v. Remey (Sup. Ct. App. Term), 
53 N. Y. S. 2d 301, we find, p. 302: 

Under paragraph 35 of the lease the right to termi¬ 
nate by 60 days’ notice was to be based upon the de¬ 
cision of the landlord to demolish the building con¬ 
taining the demised premises, or the making of a con¬ 
tract for the sale of file property, it being further pro¬ 
vided that if the landlord did not avail of its right to 
such termination the purchaser could exercise the 
option. The attempted exercise of the option by the 
purchaser over a year and a half after it became land¬ 
lord of the premises, in the absence of a contract of 
sale, was ineffectual. Payne v. Braithwaite, 113 Misc. 
517, 185 N. Y. S. 107; Krim Realty Corp. v. Varveri, 
97 Misc. 407, 161 N. Y. S. 229; Broadway-St. John St. 
Corp. v. Huyler’s 115 Misc. 621,189 N. Y. S. 223. 

See also: Petition of Furio, (1947), 72 N. Y. S. 2d 425, 
272 App. Div. 941; John Melen, Inc. v. Acme Litho Grain¬ 
ing, Inc., (Sup. Ct. App. Term) (1947), 69 N. Y. S. 2d 647. 

Not only do the decisions of the New York Courts solidly 
support defendant’s view of the law in this case, but the 
courts of Maryland, Oregon, Kentucky, Missouri and Illi¬ 
nois are to the same effect and lend added weight to our 
argument. 



11 


j At this time, we deem it proper to say to the Court 
that our research has failed to disclose a single decision 
in any other jurisdiction, where this precise question has 
been determined contrary to our view of the law of this 
case. 

4. The Rule in Maryland, Oregon, Kentucky, Missouri 
i and Illinois. 

In Gostin v. Needle, — Md. —, 45 At. 2d 772, (163 A. L. R. 
1013), the Maryland Court of Appeals stated the rationale 
of the cancellation clause to be the same as laid down in 
the Cooper Case, supra, 146 Ala. 184, 186. The lease 
provided: 

Should the landlords at any time during the term of 
this lease sell or agree to sell the property known as 
i Number 1433 Pennsylvania Avenue, Baltimore, Mary¬ 

land, and thereby desire possession thereof, the said 
Tenant hereby agrees to vacate, quit and surrender the 
premises within sixty (60) days from the date of such 
' notice to him of the Landlords’ or purchaser’s desire 

i to regain possession, and upon such surrender in ac¬ 

cordance with the terms of the lease, the said Tenant 
shall receive the sum of One thousand ($1,000.00) 

! Dollars as liquidated damages. 

In the Gostin Case, above, the tenant’s lease expired and 
! he held over, continuing to pay the same rent. The Court 
held that the tenant was still a tenant for years under 
Maryland law and that the terms of the lease were still in 
effect. The tenants sued for the $1,000.00. The question 
here involved was not directly before the Court, but in 
speaking of the forfeiture clause, the court said, p. 774: 

The clause in the lease gives the defendants (lessor), 
not the purchaser, the option to terminate the tenancy, 
viz., if the defendants (1) (a) sell or (b) agree to sell 
the property, and (2) “thereby desire possession”. 
The plaintiff (tenant) must be given notice of (i) the 
defendants’ or (ii) the purchaser’s “desire to regain 






12 


possession”, accordingly as the sale is to be consum¬ 
mated (i) after or (ii) before expiration of the notice. 
"Phis option is given to the defendants for the benefit 
of the purchaser. Whether or not the option shall be 
exercised by the defendants will depend upon the 
\alue of the option to the purchaser, and ordinarily 
will be one of the terms of sale. The value of the 
option will ordinarily be reflected in the price of the 
property. If the defendants sell the property without 
exercising the option or agreeing to exercise it for 
iliem, the purchaser cannot exercise it and thereby 
impose upon the defendants liability for the price of 
rhe option, viz., $1,000.00. This, w’e think, is the 
meaning of the option clause. Different termination 
clauses have been differently construed. Authorities 
are not lacking w’hich hold that an option of the land¬ 
lord must be exercised by the landlord, not by the 
purchaser. 

1 . This construction is not changed if we assume that 
rhe option clause is a covenant running wfith the land, 
i. e., with the reversion. Matter of Loewr’s Buffalo 
Theatres, Inc., 233 N. Y. 495, 499, 502, 135 N. E. 862; 
507 Madison Avenue Realtv Co., Inc., v. Martin, 200 
App. Div. 146, 192 N. Y. S. 762, affirmed, 233 N. Y. 
083, 135 N. E. 969; cf. Hollander v. Central Metal 
Co., 109 Md. 131, 71 At. 442, 23 L. R. A. (N. S.) 1135. 

< hi this assumption the landlord’s option could be exer¬ 
cised by the first purchaser in the event of a second 
sale of the reversion, but not in respect of the first 
sale by the original landlord to him. Krim Realty 
Corp. v. Varveri, 97 Misc. 407, 411, 161 N. Y. S. 229; 
Butler & Herman v. Meth, 122 N. Y. S. 107; McClung 
v. McPherson, 47 Or. 73, 81-3, 81 P. 567, 82 P. 13. 

In McClung v. McPherson, 47 Or. 73 (81 Pac. 567, 82 
Pac. 13), the lease provided that the landlord had a right 
to cancel the lease in the event that it sold the property. 
The landlord sold the property, then gave the notice of 
cancellation. The assignee sued for possession. The Court 
held that the original lessor w’as the proper party’ to give 
the notice under the terms of the lease, but the Court also 
took occasion to state the law in cases like the one at bar,, 
p. 81: 



13 


* * * The rale to be extracted from textbooks relat¬ 
ing to landlord and tenant, and from the opinions of 
judges of courts of last resort who have considered 
this subject, would seem to lead to the conclusion, when 
applied to the case at bar, that, the leased premises 
having been conveyed to plaintiff, he thereby became 
the landlord and was authorized to give in his own 
name a notice to defendant which would have been 
adequate to terminate the lease. As a corollary re¬ 
sulting from the legal principle thus announced it 
would also seem necessary to follow, though not in¬ 
volved herein, and referred to only by way of illustra¬ 
tion, that as the covenant in the lease whereby the 
tenancy could be terminated is not personal, but runs 
with the reservation, plaintiff took the title to the real 
property cum onere and could never sever the relation 
existing between the parties unless he also sold the 
premises and gave the required notice in his own name 
before he delivered the deed. 

In Cleveland Wrecking Co. v. Aetna Oil Co., 287 Kv. 
542, (154 S. W. 2d 31, 137 A. L. K. 352), the lease pro¬ 
vided: 


In the event the Landlord at any time during the 
term of this lease, or any continuance of same has a 
bona hde sale for the leased premises, or any portion 
of it, then the Landlord may at its option cancel this 
lease uopn ninety (90) days’ written notice to the 
Tenant, and the Tenant agrees to vacate the property 
within this ninety (90) days. 

The original lessor conveyed the premises to Aetna Oil 
Company, who advised the tenant by letter to pay the rent 
to it. The tenant paid the rent for December, 1940, Jan¬ 
uary and February, 1941, when, in the latter month, it 
notified the tenant of termination of the lease. The tenant 
refused to vacate and suit was filed. In its answer, the 
tenant alleged the foregoing facts and claimed that the 
landlord had no right to cancel and terminate the lease. 
The landlord demurred to the answer, which demurrer was 
sustained by the trial court, but reversed on appeal. The 



14 


appellate court held that the course of conduct of the 
assignee landlord estopped it from exercising the right to 
cancel. (287 Ky. 550-1). 

In Fallek v. Cramer , — Mo. App. —, 191 S. W. 2d 375, 
the lease provided: 

1 After the first year of this lease has elapsed, then in 
the event of a bona fide sale of the premises described 
1 in this lease, the lessor reserves the right to cancel 
the same by first giving the lessee ninety days’ notice 
in writing. 

The lessor sold and deeded the property, subject to the 
lease and assigned the same to the purchaser. For eleven 
months the lessee paid rent to the assignees pf the original 
owner. The first purchaser was a straw and one month 
after the purchase deeded the property to the plaintiffs. 
The straw gave a notice to vacate to the tenant stating, 
among other things: 

This notice is in accordance with the lease dated 
July 7, 1942. The reason that the present owner is 
' asking for possession of the above described property 
' is that he desired to occupy the same. 

When the tenants refused to vacate, plaintiff (real 
owner) filed a suit for unlawful detainer. Judgment for 
the tenant was affirmed. The Court said, p. 377: 

* * * The plaintiffs either in person, or by their 
agent, Willis, notified defendants that they had pur¬ 
chased the property subject to the lease, and that they 
should pay the monthly rental to them, which they 
did, for the next seven or eight months. Under such 
circumstances, the plaintiff became the lessor and could 
cancel the lease only in accordance with its pro¬ 
visions. This proposition is definitely decided by 
the cases of Gates v. Norton, 228 Ill. App. 96; Krim 
Realty Corp. v. Varveri, 97 Misc. 407, 161 N. Y. S. 
271; Cleveland Wrecking Co. v. Aetna Oil Co., 287 
Ky. 542, 154 S. W. 2d 31, 137 A. L. R. 352; Payne 
v. Braithwaite, 113 Misc. 517; 185 N. Y. S. 107. In 
the Krim Realty Corp. case, supra, the Court in 



15 


construing a very similar lease and facts now before 
us said (97 Misc. 407, 161 N. Y. S. 232): 

But it is not necessary to determine whether 
the privilege is personal, for, if the right of can¬ 
cellation were a covenant running with the land, 
it would not entitle the grantee to cancel the 
lease until it in turn made a sale. Butler & Her¬ 
man Co. v. Meth, Sup., 122 N. Y. S. 271. When 
the respondent accepted an installment of rent 
from appellant, it became the landlord; and if it 
was at all entitled to the privilege of cancella¬ 
tion contained in paragraph 14, it could only exer¬ 
cise the privilege in the one case specified in that 
paragraph, which was: “In case the landlord 
sell the said premises, and the purchaser thereof 
demands possession.” 

In the Gates case *, supra, the Illinois Court an¬ 
nounced in this language, (228 Ill. App. 99): 

We do not consider the right to terminate this 
lease, as reserved by its terms, to be one which 
was personal to the original lessor, Racine. It 
was a covenant which ran with the land and 
passed to the successive grantees of the original 
lessor. But that does not mean that a grantee, 
by reason of that clause, has the right as such 
grantee, and by reason of his purchase, to termi¬ 
nate the lease because of such purchase . The 
right which a grantee acquires, under the pro¬ 
vision of the lease referred to, is only the right 
to terminate the lease as a lessor “in the event of 
the sale of the premises,” by him. That is the 
right reserved in the lease to the lessor and that 
is the right passing on to the lessor’s grantees or 
assigns. * * * Under this clause in the lease, no 
successor in interest of the original lessor has 

* This was a forcible entry and detainer action. The lease provided: 
“The said Racine (lessor) shall in the event of sale of said premises* 
have the right to terminate this lease on the thirtieth day of April of any 
year by giving notice in writing on or before the first of March of any 
year of his intention to terminate.” Several conveyances of the premises 
were made. Two weeks after the last purchasers took title, they gave 
notice to quit. Judgment for plaintiff was reversed on appeal. (This 
case cites and follows: Krim and Butler cases.) 



16 


the right to terminate the lease by reason of the 
purchase of the property by him but only “in the 
event of a sale of the property”, by him. • • • 
(Italics ours.) 

In Butler & Herman Co., supra, (122 N. Y. S. 272), 
the court was considering a lease with this provision, 
“(Fourth): It is understood that in the event of a 
sale of the said premises this renewal term, or any 
other extension or renewal term, shall cease and be 
determined upon fifteen (15) days’ notice to the tenant, 
* • In disposing of the question, we are now con¬ 
sidering, the court said (122 N. Y. S. 273): 

The Fourth paragraph of the extension agree¬ 
ment did not mean that the landlord could arbi¬ 
trarily terminate the term demised upon giving 15 
days’ notice to the tenant. It meant, what it 
plainly said, that the tenancy could be terminated 
“in the event of sale” provided that 15 days notice 
of sale was given the tenant in the manner pre¬ 
scribed. The demise was thereupon a limitation 
by which the term was to expire in the event of 
sale, and upon giving the required notice in the 
manner prescribed. In selling the premises with¬ 
out giving the required notice, the landlord 
waived the right to insist that this tenant should 
forfeit his lease. By acceptance of rent the same 
relation existed between the new owner and the 
tenant that had previously existed between the 
original landlord and the tenant. Unless the event 
happened, viz., a sale and proper notice thereof, 
the estate of the tenant would not terminate until 
the expiration of the time stipulated in the exten¬ 
sion agreement. The notice which the new land¬ 
lord gave on August 12th was merely an arbitrary 
attempt to terminate the tenant’s estate without 
regard to the provisions of the extension agree¬ 
ment. No sale of the premises took place after 
the tenant paid rent to the new landlord, and in 
the absence of such sale the latter had no right 
to terminate the tenant’s estate simply by serving 
a notice that on and after a certain date his lease 
would “become null and void.” 



17 




Other cases holding to the same effect are Cleve¬ 
land Wrecking Co. v. Aetna OH Co., supra, and Payne 
v. Braithwaite, supra. 

Plaintiffs ably argue that the opinion in the Hadley 
case, supra, (97 Mo. App. 314, 71 S. W. 451) disposes 
of the issues in this case. We do not so construe the 
opinion. In that case the lease did provide that if the 
sale of the property be made during the continuance of 
the lease, then the lessee would deliver possession upon 
30 days notice in writing. It was the contention of the 
defendant that this was a personal right reserved for 
the original lessor only and did not run with the 
land. The court held that it was a covenant which 
ran with the land and the purchaser from the original 
lessor was entitled to possession after giving proper 
notice; but it does not appear from the opinion that 
the purchaser ever accepted rent from the lessee and 
thereby became the lessor and bound by the same limi¬ 
tations and restrictions in the lease as was the original 
lessor, i. e., he was entitled to possession only upon a 
sale of the property. The sale was made and notice 
given within a period of 30 days. The court did not 
discuss or decide the specific question which we are 
considering. 

In the Childs case, supra, (110 Misc. 103,180 N. Y. S. 
919), the lease entitled the lessor to the possession of 
the property by giving 30 days’ notice without any 
restrictions whatever. The court merely held that the 
covenant ran with the land and the purchaser had the 
same rights that the lessor had. 

Without lengthening this opinion by discussion of 
each case relied upon by plaintiffs, an examination of 
them will disclose that they have distinguishing fea¬ 
tures such as: the original lessor gave the notice or 
the purchaser gave the notice before accepting the rent 
and becoming the lessor, or the lease provides for the 
right of cancellation without any limitations or restric¬ 
tions, such as only in the case of the sale of the prop¬ 
erty. 

We hold that the stipulation now under consider¬ 
ation is a covenant which runs with the reversion, but 





18 




that when plaintiffs purchased the property and con¬ 
tinued to accept rent from the lessees, they thereby 
became lessors and bound by the limitations and re¬ 
strictions in the covenant, and could dispossess the 
defendants only in the event of a bona fide sale of the 
premises. 

On December 9, 1946, plaintiff in this case conceded that 
it was the landlord of the defendant. On that date, in 
plaintiff’s notice of cancellation, we find: “and your 
lease having been assigned to us which makes us your 
landlord,” etc. (R. 11). Thus, even after lessee attorned 
to the lessor in June, 1946, plaintiff recognized and acknowl¬ 
edged the lessee to be its tenant. Plaintiff’s identity is 
plainly that of lessor in this lease. 

5. The Phrase “At Any Time.” 

The phrase “at any time” was in the leases in Payne 
v. Braithwaite, Gostin v. Needle, and Cleveland Wrecking 
Co. v. Aetna Oil Co., cited and quoted above. Yet neither 
the New York, Maryland nor Kentucky court gave that 
phrase any weight or consideration. No weight can be given 
to it in this case. 

| 

Paragraph 18 of the lease provides that (a) “In the 
event that Lessor shall make a bona fide contract for the 
sale” of the leased premises, “At any time during the term 
herein” then, and only then, (b) the “Lessor, or its suc¬ 
cessors in title shall have the right to cancel and terminate 
this lease at any time after December 31, 1941”, etc. 

It is only in the event that (a) the “Lessor,” (not the 
“Lessor, or its successor in title,”) makes a contract for 
the sale of the premises, that (b) the “Lessor or its suc¬ 
cessor in title”, may cancel or terminate the lease. 

The fact that the lease did not read: “In the event that 
Lessor, or its successor in title, shall make a bona fide con¬ 
tract for sale” etc., is most significant. 



19 


When the parties intended to give the right to terminate 
or cancel to the lessor’s successor in title, the lease plainly 
said so. The fact that the phrase “its successor in title” 
docs not appear after the word “Lessor” in the first line 
of par. 18, but does appear after the word “Lessor” in the 
6th line of par. 18, must be given effect. The absence of 
“successor in title” in the one place and its presence in 
the other can only have one effect, namely, to show clearly 
that the parties to the lease intended to limit the right of 
cancellation or termination to the person who was “Lessor” 
at the time of the making of the contract for sale . 

The lease can be construed in only one way, viz., that, 
(a) whoever is lessor and (b) makes a contract for the 
sale of the premises (c) after December 31, 1941, (d) has 
the option, then and there, either to give a notice of can¬ 
cellation and termination of the lease, or to recognize the 
lease. 

Thus, it appears that, the clause “at any time during 
the term herein” which appears in the 3rd line of para¬ 
graph 18 is limited and restricted by the clause in the 
6th and 7th lines of paragraph 18 which provides: “the 
Lessor, or its successor in title shall have the right to can¬ 
cel and terminate this lease at any time after December 31, 
1941.” If the premises had been sold many times prior 
to December 31, 1941, could anyone of the successors in 
title have canceled the lease prior to that date? Most 
certainly not! 

The conclusion is made doubly plain by the proviso for 
the scale of payments to the tenant in the event of can¬ 
cellation and termination. Such payments to the lessee 
in the event of cancellation start in the year 1942. 

The phrase “at any time after December 31, 1941” 
simply sets the date when the Lessor, or its successor in 
title, can first exercise the option to cancel in the event 
of a “contract for the sale” of the premises. Of course, 



20 


at any time after that date, when the then Lessor contracts 
for sale of the premises, then and only then, can the then 
Lessor, or its successor in title, (provided he has not 
accepted rent from the lessee) give notice of cancellation. 

The phrase “at any time after December 31, 1941” 
could not possibly mean simply: “at any time whatso¬ 
ever.” The former phrase cannot be said to confer on the 
Lessor’s successor in title the right to cancel and termi¬ 
nate “at any time whatsoever” after the Lessor has made 
a legitimate “contract for sale” of the premises. We 
have seen, first, that the context of the lease clearly indi¬ 
cates that no cancellation and termination could have been 
made before 1942. Second, the lease can only be inter¬ 
preted to mean that termination and cancellation can be 
invoked only in the event that the person who is then 
Lessor makes a contract of sale. Otherwise, after the first 
sale of this property was made in 1943, any successor in 
title to the original Lessor could have canceled the lease 
“at any time,” and the lessee would then have been a 
tenant at will of the landlord and the lease would have no 
life in it. That was not the intent of the parties as is shown 

(1) by the provision in the third paragraph on page 1 
of the lease, (the habendum clause, Tr. 13), wherein the 
“term” of the lease is fixed at 10 years and one month, 

(2) by the first paragraph on page 2 of the lease fixing 
a yearly rental, and (3) the most significant point, para¬ 
graphs 20 and 21 of the lease (Tr. 18) following the can¬ 
cellation clause, provide: 

20. And Lessor doth covenant that Lessee on pay¬ 
ing the said yearly rent and performing the covenants 
aforesaid, shall and may peaceably and quietly have, 
hold and enjoy the demised premises for the term 
aforesaid. 

21. And it is further understood and agreed that 
the covenants and agreements contained in the fore¬ 
going lease are binding upon the parties hereto and 
their respective heirs, administrators, successors, legal 
representatives and assigns. 


21 ' 

No matter how many times the premises were sold, the • 
lease still remained a lease for years. Sec. 45-818 D. C. 
Code, 1940. 

The only logical and reasonable explanation of the pres¬ 
ence of the phrase “at any time after December 31, 1941,” 
is that—in the event of a “contract for the sale” of the 
premises, by the Lessor of this defendant, (whether that 
Lessor was the original Lessor or its successor in title), 
the notice of cancellation of the lease could be made to 
terminate on any day of the year and not necessarily at 
one year’s end or at the conclusion of a monthly rent 
period. 

That is the rule stated in 32 American Jurisprudence, 
709: 


In a number of cases the courts have construed 
specific provisions for the termination of a lease in 
the event of a sale of the property with respect to the 
time of their operation. Frequently, such options are 
so worded that the demised premises can be sold at 
any time during the tenancy and the lease thereby 
terminated. Sometimes, however, the option is given 
only to be exercised at the end of a certain period of 
the tenancy, such as a month, or a year. 

Sec. 832. * • • Frequently, the option is granted 
with the intention of its being exercised at the end of 
a rental or otherwise specified period of the tenancy, 
such as a month, quarter, or a year, and when such 
intention is manifest, the option must be exercised 
in relation thereto. The option may, however, author¬ 
ize the termination of the lease at any time , irrespective 
of rental or other periods. (Under lining supplied.) 

In the lease under consideration, the only purpose of the 
phrase “at any time”, was to permit a valid termination 
and cancellation of the lease at any time other than a 
rental period. 





22 


* 6. The Stipulated Facts Do Not Support the Memorandum 

Opinion of the Trial Court. 

• * • '* . 

The trial court found- “as a fact” that plaintiff exer¬ 
cised its* option to gifk*fte v notice of cancellation “within 
a reasonable time.”- (R. 24-25). 

There is no fact in the record upon which to base such 
finding. The pertinent, established dates are May 23 and 
May 31, 1946, when the premises were sold and deeded to 
plaintiff’s straw and to plaintiff, respectively. Those 
were the dates of actual sale and of deeds. Neither of 
those dates constituted the “event” when Lessor made a 
bona fide “contract for the sale” of the premises. 

The date of “contract for sale” of the premises is un¬ 
known. But that is the date, and the only date, when the 
right to serve the notice of cancellation first accrued. 

Therefore, on this record, it is metaphysically impossible 
to arrive at any conclusion as to whether or not December 
9, 1946, is “within a reasonable time” of the unknown 
date. 


CONCLUSION 

This case should be affirmed. 

Respectfully submitted, 

Chapin B. Bauman, 

John H. Burnett, 

600 F Street, N. W. 
Washington 4, D. C. 

Attorneys for Appellee.