the rental consideration paid for the premises which are the subject of this suit was predicated on a percentage of gross sales. Whose responsibility is it to say that a certain percentage of the gross sales of the X Company would produce a like more or less revenue to the lessors than a like percentage of the gross sales of the present lessee, defendant herein?
Defendant submits as authority for its contention a line of cases involving an option to purchase. I do not think they are in point. The only issue for determination there is the sales price.
The present tenancy started in 1915 on a flat cash rental basis and changed in 1936 by agreement of the parties and through the instrumentality of arbitration to a percentage of gross sales, thereby, by their subsequent conduct, definitely adding to the uncertainty of the terms of the lease.
Under the caption of 'Certainty and Definiteness,' 32 American Jurisprudence, Landlord and Tenant, Section 958, cites the law as follows:
'Like other contracts or agreements for a lease, the provision for a renewal must be certain in order to render it binding and enforceable. Indefiniteness, vagueness, and uncertainty in the terms of such a provision will render it void unless the parties, by their subsequent conduct or acts supplement the covenant and thus remove an alleged uncertainty. The certainty that is required is such as will enable a court to determine what has been agreed upon. * * * '(Emphasis supplied.)
51 C.J.S.,Landlord and Tenant, § 56, at page 596, reads as follows:
'A provision for extension or renewal, in order to be enforceable, must be definite and certain in its terms, particularly the terms with respect to the duration of the additional term and the amount of rent to be paid.'
A case directly in point is Hoffman's Appeal, 1935, 319 Pa. 1, 179 A. 38, 39, where the dismissal of a petition for specific performance of a contract for the leasing of certain premises containing oil and gas was affirmed on the ground that the contract was too indefinite. The lease provision contained a 'best offer' clause similar to the first refusal clause herein.
Justice Maxey, writing for the court, held:
'* * * what constituted the 'best offer' would, in itself, be probably a matter of dispute and uncertainty. * * * 'The essential basis of a decree for specific performance of a contract to convey real property is a definite present agreement in regard to a specific piece of land, clearly designated as present to the minds of both parties, and to be conveyed by one to the other. * * * It is not the function of a court of equity to make a contract for the parties nor to supply any material stipulation thereof."
To hold the first refusal clause in the instant agreements presently effective would require the Court to rewrite the lease, determining the term, the amount of the rental and all other of the many collateral terms and conditions usually found in an agreement necessary for a tenancy such as are presented in this case.
The language of the court in 58-59 Realty Corporation v. Park Central Valet, Inc., 252 App.Div. 72, 297 N.Y.S. 40, 43, in passing on a very similar situation, is most pertinent here, having in mind the difficulties the parties have encountered in endeavoring to arrive at an understanding.
'The clause must be regarded as incomplete, indefinite, and uncertain. If any intention is evidenced it is to leave open to future negotiation the duration of the term of the renewal. This conclusion is strengthened by the testimony relative to negotiations looking toward a renewal had prior to the expiration of the term granted.'
I hold that the first refusal clause contained in the 1912 leases is too vague, indefinite and uncertain to be enforceable and, consequently, has no legal significance.
Conclusions of Law
1. The first refusal clause contained in the agreements of lease dated December 2, and 6, 1912, is superseded by the agreement of January 18, 1936.
2. The first refusal clause contained in the agreements of lease dated December 2, and 6, 1912, does not give the defendant an enforceable option for a new lease of the property for the reason that said clause is too vague and indefinite.