The action was brought to recover two installments of rent claimed to be due to the firm of Morris Arnold & Co. upon a lease by which Arnold & Co. let to.the defendants a store in the city of New York. The defendants, who had never taken possession of the store under the alleged lease, denied that any lease had ever been made between the parties, and the question presented was only whether a completed lease had ever been made. No evidence was given by the defendants, and the case stands solely upon what was proved by the plaintiffs’ witnesses. At the close of the plaintiffs’ case the learned justice who presided at the trial held that, upon the facts shown, no lease was ever concluded between the parties, but that the agreement sworn to was simply a contract to make a lease, which had not yet been completed, and for that reason he dismissed the complaint. Whether that ruling was proper, is the only question presented upon this appeal.
The evidence showed that the principals in the transaction never had any consultation with regard to the making of the lease, but all negotiations, so far as there were any, were conducted by one Tannenbaum, a broker, who undertook to bring the parties together and complete the agreement; and the case stands solely upon his evidence. It appears that the firm of M. Arnold & Co. were in possession of the building, or a portion of the building, at 472 Broadway, for which they had a lease which expired on the 1st day of February, 1893. The defendant corporation was engaged in business in the city of New York, and, as Mr. Tannenbaum says, desired to rent a store for the purposes of its business. It had had some negotiations upon that subject with Tannenbaum, and in the *162early part of January he called at the premises of the defendant, at 1155 Broadway, to talk with its officers about renting a store. Before that they had had in view a store at 543 Broadway, with regard to which they had been conducting some negotiations, which apparently had fallen through. The officers of the defendant, who were conducting its business in New York then, spoke to Tannenbaum -about the store occupied by Arnold & Go.; and, as he puts it, he said:'
“They said they would take the store of Mr. Arnold, if 1 could get it for $5,000; and I told him if they put it in the shape of a proposition,—in the form o-f an offer,—I would endeavor to get it. They said they would take it at $5,000, ‘but hurry up; it is late in January, and we want to occupy it the 1st of February.’ ”
He immediately took a car, and went down to Mr. Arnold’s office. The following testimony was then given:
“Q. Did they say anything to you about closing it at $5,000? A. Yes, sir. Q. Tell us what they said about that,—whether they authorized you to close it at $5,000. A. If I could get the other store for $5,000 for one year, they would take it, and they authorized me to close it. The language was, they authorized me to take it at $5,000.”
The witness then stated that he went down and saw Mr. Morris Arnold, since dead:
“I said to Mr. Arnold that I had just received an offer of $5,000 for the store. I am saying what I told Mr. Arnold. I said, T have just received an offer for $5,000 for your store and basement from R Rothschild’s Sons Company,’ handing him the card. He said, T ought to get $5,500, which I am paying.’ I said, ‘Mr. Arnold, it is late in the season; you had better do it. I can get you a store for $1,800 which will suit you.’ He said, ‘Are you' sure?’ I said, ‘Yes, sir.’ He said, ‘On that statement, I will rent the store for $5,000 to .the 1st of February.’ He said he would rent it for one year for $5,000. He authorized me to close it then.”
After some further conversation, the witness said, “He said, ‘If that is the case, you can close the lease.’ ” This took place on the 9th of January, 1892. On returning to his office, Tannenbaum wrote, and sent by a messenger, the following letter to the defendants, dated on that day: “Gents: I have closed the lease for you as directed, with Mr. Arnold, for store and base., 472 Broadway, for one year from February first, 1892, at $5,000 rental, payable monthly. Yours, truly, Leon Tannenbaum.” The messenger who delivered that letter brought back a scrap of paper upon which was written the following: “Mr. T.: Yours received.. Mr. B. is satisfied. Yours, etc., A. M. Rothschild.” Tannenbaum further testified that on the same day, at a later hour, he caused to be sent to the defendants a letter in which he asked them to inform him by return mail under what state law the company was organized, and the individual names of its officers. He testified that he wrote this letter after his return from having his conversation with Arnold, for the purpose of getting the information to enable him to draw a lease, and that he intended to draw a lease in the ordinary and usual form, and the information which he asked from the defendants was for the purpose of embodying the manner in which the lease was to be drawn. It will be noticed that Tannenbaum, at the time of his first direct ex-*163animation, in wMch he stated the conversations between the two parties relating to the lease, does not say that the Rothschilds said anything to him about the manner of paying the rent. His attention having been called to that upon a further direct examination, he said that in his conversations with the Rothschilds it was stated that the rent was to be paid monthly, and, having been asked whether that manner of payment was also mentioned in his conversation with Mr. Arnold, he answered:
“It was Ills instructions. Q. Both the monthly payment of the rent, the duration of the term, and the amount? A. Tes; I had made his lease originally. Q. And you were going to embody these things in a written agreement, were you? A. Tes, sir.”
So it will be seen that, at the time Tannenbaum finished his conversation with Arnold respecting the agreement, he supposed that a formal lease was to be made; and he expected to put into that lease an agreement as to the time of payment of the rent of $5,000, which he said was the same sum agreed upon.
The Rothschilds never took possession of the premises under the alleged agreement. The 9th day of January, 1892, was Saturday; and on the 11th the Rothschilds wrote to Tannenbaum, saying that it would be impossible for them to use the Arnold store. After the receipt of that letter no effort was made by Tannenbaum to procure a written lease, and nothing further was done in that direction. Subsequently, after the first installment of rent had become due, an action was brought for it by these plaintiffs against the defendants, in which, upon a trial, the defendants succeeded, and the judgment entered in their favor was affirmed upon appeal, after having been modified by striking out a statement that it was dismissed upon the merits, and inserting in place of it a statement that it was dismissed with the same effect in all respects as though the defendants’ motion to dismiss had been granted at the close of the plaintiffs’ evidence; thus making the judgment operate merely as a non-suit, instead of a final determination of the rights of the parties. Arnold v. R. Rothschild's Sons Co., 23 App. Div. 221, 48 N. Y. Supp. 854. As the case is presented here, the evidence is somewhat different from that presented on the other trial. Therefore the decision of the appellate division upon the facts there appearing cannot be of much assistance to us.
The rule ordinarily is that whether an agreement shall be construed to operate as a lease in prsesenti, or only an agreement for a lease, depends upon the intention of the parties, to be collected from the whole contract. Jackson v. Delacroix, 2 Wend. 433. If the agreement contains words of demise in prassenti, or if all the terms of the contract are included in the agreement, and there has followed an actual possession of the premises by the lessee, it would not be difficult to say that the understanding was that an actual lease had been made, and that the contract was not a mere agreement to make a lease in the future. But if all the terms of the contract were not finally agreed upon, or if there is upon the statement of the alleged contract between the parties any unsettled term, or if any of the terms of the agreement are not clear, and if *164it is understood between the parties that a formal lease was to be -executed, then the contract will be interpreted as an agreement to make a lease, and not as a finally concluded lease which passes to the lessee the right to the possession of the premises, and which wests to the lessor the right to recover the rent. The contract, as testified to, contains no express words of demise by which a present interest passed. That is not claimed. But it is said that authority given to Tannenbaum “to close the lease,” which was all the authority either party gave him, necessarily implied that the contract was complete, so far as the speaker was concerned, when Tannenbaum had procured one party to accept the terms offered by the •other. We do not think so. When Arnold authorized Tannenbaum to “close the lease,” that implied that he should do something .yet to make it a complete lease. He had still to “close it.” He has told us what that meant when he says that he took at once the slips to prepare a formal instrument to be executed by both parties, and it is clear that he did not suppose that his duty was done until such a paper had been made.
It is claimed by the appellants that if all the terms of the agreement were finally concluded between the parties, so that nothing remained except to reduce those terms to writing and execute the •writing, the contract was completed, although it was understood between the parties that a formal lease should be executed. It is quite true that where a valid contract has been made, by which the parties understand that their rights are fixed, such a contract may foe enforced, although there may be a stipulation or an understanding between them that a more formal contract shall be executed. Sanders v. Fruit Co., 144 N. Y. 209, 39 N. E. 75. But it is essential to the enforcement of such an informal contract that the minds
Upon the whole case, we are satisfied that the agreement as testified to by Tannenbaum did not constitute a lease, but was simply an agreement to make a lease, which was subsequently to be reduced to writing; and for that reason neither party incurred any liability to the other as the result of this conversation, and there fore this action cannot be maintained.
The judgment and order appealed from must therefore be affirmed, with costs. All concur, except BARRETT, J., dissenting.