Case ID: ad_170/html/0668-01.html
Source: Caselaw Access Project
Author: {"author": "McLaughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Susie E. Piser, Respondent, v. Ferdinand Hecht and Piser Furniture Company, Appellants.
    First Department,
    December 30, 1915.
    Landlord and tenant—assignment of lease — covenant to give security for payment of rent.
    The substitution of one tenant in place of another does not operate to discharge the first tenant, as matter of law, from future performance of his covenant to pay rent.
    A landlord who has taken collateral security for the payment of rent by a tenant cannot be deprived of it without his consent, and such consent cannot be implied from the fact that he has accepted rent from an assignee of the tenant.
    Hence, where a tenant who had agreed to execute and deliver a bond and mortgage as collateral security for the full performance of his lease died before the execution thereof, and his wife, to whom his property was left, executed the security with the consent of the landlord, and subsequently assigned the lease, the assignee agreeing to assume and perform all agreements and covenants thereof, and thereafter the assignee transferred the lease with knowledge of the landlord, and the second assignee has paid rent directly to him and been recognized as his tenant, and neither assignee has agreed to give security for the performance of the lease, the landlord, who has not expressly agreed to release the wife from her obligation to perform the terms of the lease, cannot be compelled to cancel the collateral security.
    Nor can the second assignee of the lease be compelled to give the security required by the lease or to indemnify the wife therefor.
    
      Appeal by the defendants, Ferdinand Hecht and another, from a judgment of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 24th day of March, 1915, granting plaintiff’s motion for judgment on the pleadings after demurrers had been filed to the amended complaint.
    
      Norman P. S. Schloss, for the appellants.
    
      Isaac N. Jacobson, for the respondent.
   McLaughlin, J.:

The complaint in this action alleges in substance that on the 14th day of December, 1908, Abraham Piser, husband of the plaintiff, leased from the defendant Hecht certain real estate in the city of New York for a term of seven years commencing on the 1st of May, 1910, with an option under certain conditions for an additional three years; that the lease was in writing and by its terms it was agreed that Piser should execute and deliver to Hecht a bond secured by mortgage in the sum of $10,000 as collateral security for the full performance of the lease by the lessee; that on March 4, 1909, Piser died leaving his estate, both real and personal, to the plaintiff; that on February 26, 1910, she took the place of her husband in the lease and gave the bond and mortgage required; that prior to the 26th of June, 1911, the lease was transferred and assigned by the plaintiff to Piser & Co., a domestic corporation, and that the company agreed to assume and perform all the conditions and covenants of the lessee specified in the lease; that on the 26th of June, 1911, Piser & Co. transferred the lease to the defendant, the Piser Furniture Company, a domestic corporation, and it has ever since been and is now the owner of the lease and in possession of the demised premises; that Hecht had knowledge of the assignment to the Piser Furniture Company, which has since paid the rent directly to him, and has become and is his tenent and is recognized as such; that prior to the commencement of the action plaintiff demanded that Hecht cancel and surrender the bond and mortgage given by her, which he has refused to do; that she has also demanded that the Piser Furniture Company give another bond in place of the one which she gave, which the furniture company has refused to do; and that by the terms of the assignment to the furniture company it agreed to assume all the liabilities and obligations of Piser & Co. and to indemnify it against any loss or expense in connection with the same. The judgment demanded is that the bond and mortgage given by the plaintiff be canceled and discharged, and if security for the performance of the lease on the part of the lessee be required by Hécht, that the defendant Piser Furniture Company be directed to furnish it, or indemnify plaintiff therefor.

Each defendant separately demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of action. Upon the complaint and demurrers the plaintiff moved, under section 547 of the Code of Civil Procedure, for judgment on the pleadings. The court overruled the demurrers with leave to defendants to withdraw same and answer on payment of ten dollars costs, in default of which final judgment was ordered for the relief asked in the complaint. The defendants appealed from the order.

I am of the opinion the order should be reversed and the demurrers sustained. When Hecht entered into the lease with the plaintiff’s husband he required him to give a bond for $10,000, secured by mortgage conditioned as collateral security for the performance by the lessee of the terms and covenants on his part to be performed. Before the bond and mortgage were given plaintiff’s husband died and she thereupon, with the consent of Hecht, took his place in the lease and gave a bond and mortgage as previously agreed by him. There are no allegations in the complaint to the effect that when the assignments were made by the plaintiff to Piser & Co. and by it to the Piser Furniture Company either corporation agreed to give Hecht a bond and mortgage as collateral security for the performance of the covenants on the part of the lessee to be performed, or that Hecht agreed to release the plaintiff from her obligation to perform the terms of the lease or to surrender the bond and mortgage which she had given. The term of the lease was for seven years, with an option to renew for an additional three years. The rent stipulated to be paid was $15,000 a year, or $105,000 for the seven years, to say nothing of the option to renew, and before Hecht would enter into the lease he required that the bond and mortgage he given. The complaint contains no allegation to the effect that Hecht has ever agreed to give up the security or that he has done anything which entitles the plaintiff to have the same canceled and returned to her. Obviously, one who has taken collateral security for the payment of rent by a lessee cannot be deprived of it without his consent, and Hecht’s consent cannot be implied from the fact that he has accepted rent from Piser 6 Co. or the Piser Furniture Company; in other words, the substitution of one tenant in place of another does not operate to discharge as matter of law the first tenant, from future performance of his covenant to pay rent. (Walton v. Stafford, 14 App. Div. 310; affd., 162 N. Y. 558; Jackson v. Brownson, 7 Johns. 227; Rangor v. Bacon, 3 Misc. Rep. 96; 1 McAdam Landl. & Ten. [4th ed.] 865.)

The order appealed from, therefore, is reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs to each defendant, and the demurrers sustained, with leave to the plaintiff on payment of such costs to serve an amended complaint within twenty days.

Ingraham, P. J., Laughlin, Scott and Dowling, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs to each defendant, with leave to plaintiff to amend on payment of costs.