Stern v. Krasne

DORAN, J. On June 15, 1946, plaintiffs leased from the defendants certain real property for a term of five years, the "written lease containing a covenant to extend the term for an additional five years. About five months prior to its termination, on January 20, 1951, plaintiffs’ agent sent a letter to appellants, electing to renew the lease. Plaintiff’s check for $300 representing the rental from April 15 to May 15, 1951, was returned by the defendants, with a letter stating that same “cannot be accepted as you have advised me that there will be no extension of the lease, which terminates on the 15th day of June, 1951. And to this we have agreed. The rent for the last two months of this five year lease has been paid.”

Four days prior to the end of the term of the lease, plaintiffs, as tenants, filed an action for declaratory relief, asking the court to declare that the term had been extended. Subsequently, after a voluntary dismissal of the declaratory relief action, plaintiffs filed an action against defendants for slander of title in reference to the leased premises, and recovered a judgment for $6,500. After a motion by defendants for a new trial, this judgment and the supporting findings were vacated and a judgment of dismissal with prejudice entered, after plaintiffs had informed the court that the defendants’ motion for dismissal would not be opposed.

Plaintiffs thereafter filed the present action for damages for breach of the covenant to extend the term of the lease, this breach being alleged to have occurred some two months after the slander of title complained of in the previous action. In this present action plaintiffs again recovered judgment against the defendants in the sum of $3,000, from which judgment defendants now appeal. In the trial court the defendants pleaded res adjudicata but the court concluded that the present action was not barred by the judgment of dismissal in the previous slander of title action.

It is appellants’ contention that the present action is barred by the previous judgment for the reason that “A judgment between the parties is res judicata not only as to all issues raised in the former action, but also as to all issues which were by implication included or could have been included, in the trial of the former action.” In this connection appellants’ brief maintains that “the issues raised by the allegations in the [820]prior action of Slander of Title were identical with.those in the present action, save and except the issue of damages which was, of course, different.”