Author Topic: Ils sont fous, ces Indiens (René Goscinny)  (Read 224 times)

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Ils sont fous, ces Indiens (René Goscinny)
« on: August 28, 2008, 08:29:29 PM »
1912 ‘Gold Coin’ Lease Payment Term is Enforceable, 6th Circuit Rules
Posted August 28, 2008   
By Martha Neil


A 1912 lease provision that requires payment in gold coin is enforceable, a federal appellate panel held yesterday, even though the U.S. withdrew the gold coin from circulation in 1933 and the building owner, for decades after that, didn't attempt to enforce the payment term.

Because the price of gold has shot up since 1912, a lower court must now determine what the 35,000 gold coins that the lease calls for in annual rent is worth in U.S. dollars, under the ruling by the 6th U.S. Circuit Court of Appeals, reports the Associated Press.

The lessee of the landmark building in Cleveland, Ohio, S&R Playhouse Realty Co., had been paying $35,000 annually since assuming the lease in 1982. That amounts to about 17 cents a square foot, says attorney David Thompson of Cooper & Kirk in Washington, D.C., which is representing the building owner, 216 Jamaica Avenue LLC. "We are delighted that the windfall that the tenants have been enjoying is going to be eliminated and this will get back to a market-based rent."

Applying the gold coin rent payment requirement, the tenant will probably have to pay about $8 per square foot, he says.

The gold coin requirement had apparently been long forgotten until 216 Jamaica Avenue bought the building in 2006. It tried to enforce the payment provision, and sued when the tenant balked.

Although it was, for many years, illegal under federal law for individuals to own gold, federal law enacted in the mid-1970s repealed that ban and specifically provided that parties could contract for payment in gold, starting in 1977. Meanwhile, in a 1982 lease assignment, S&R agreed to take on all of the original obligations of the 1912 lease, the 6th Circuit points out in its written opinion (PDF).

While the 99-year lease expires in 2011, the payment issue apparently implicates a substantial sum of money, because the lessee has a right to renew for another 99-year term, according to the opinion.

Source: American Bar Association Journal
An unidentified coin is a piece of metal. An identified coin is a piece of history.