Walton v. Stafford, 162 N.Y. 558 (1900)

Rent due on a legal holiday (that is not a Sunday) is payable on that day, and is not automatically postponed to the next business day unless a statute specifically provides otherwise.

Summary

This case addresses whether rent due on a legal holiday is payable on that day or postponed to the next business day. The plaintiff, an assignee for the benefit of creditors, occupied a hotel leased by his assignor from the defendants. The lease stipulated rent was due on the first of each month. The defendants sought to counterclaim for January rent against the plaintiff’s claim for personal property sold to them. The court held that because January 1st was a legal holiday, the rent was still due that day. As the plaintiff only took possession on January 2nd, he was not liable for that month’s rent and the counterclaim failed.

Facts

Francis T. Walton leased the Grand Hotel from the Staffords, with rent payable monthly in advance on the first of each month.

Walton made a general assignment for the benefit of creditors to the plaintiff on January 2, 1894.

The plaintiff took possession of the hotel on January 2, 1894, and continued to occupy it until January 28, 1894.

During January, the plaintiff collected rent from sub-tenants but did not pay rent to the Staffords.

On January 27, 1894, the plaintiff sold personal property located on the premises to the defendants for $811.16.

The Staffords initiated dispossess proceedings, and the plaintiff surrendered possession on January 28, 1894.

Procedural History

The plaintiff sued the Staffords to recover the $811.16 owed for the personal property sale.

The Staffords counterclaimed, alleging that the plaintiff was liable for January rent and, after deducting the $811.16, owed them $3,348.84.

The trial court heard the case based on stipulated facts.

The Appellate Division’s judgment, presumably in favor of the plaintiff, was appealed to the New York Court of Appeals.

Issue(s)

Whether rent due on January 1st, a legal holiday, was legally due and payable on that day, such that the assignor, and not the assignee, was responsible for its payment?

Holding

Yes, because the Court found no controlling authority or statute preventing rent falling due on a legal holiday (that is not a Sunday) from being treated as due and payable on that day.

Court’s Reasoning

The court emphasized that the stipulation of facts explicitly stated that the January rent was due on January 1st. Even without that stipulation, the court found no legal basis to postpone the rent payment.

The court reviewed the Statutory Construction Law (Laws 1892, ch. 677, § 27, as amended) and noted that while it addresses computation of time and the transaction of business in public offices regarding holidays, it does not affect the payment of rent.

The court distinguished the rule for negotiable instruments, where payment is deferred to the next business day if the due date falls on a Sunday or holiday. This rule exists because banks are closed on holidays.

The court stated, “We thus have holidays distinctly dealt with by the legislature as to computation of time in certain cases, as to the transaction of business in public offices and as to the falling due of commercial paper, but the matter of rent and its payment is unaffected by this legislation.”

Because the rent was due on January 1st, and the assignee only took possession on January 2nd, no rent became due during the assignee’s occupancy. The rent was a debt owed by the assignor at the time of the assignment.

The court rejected the argument that the assignee was liable for use and occupation, explaining that the landlord could have removed the assignor and assignee immediately for failure to pay the January rent. Because the assignee was removed before February 1st, no rent ever became due from him.

The court cited Childs v. Clark, 3 Barb. Ch. 52, 60, noting the assignee merely succeeded to the rights of his assignor.