Case ID: misc2d_77/html/0962-01.html
Source: Caselaw Access Project
Author: {"author": "\n      \n      Per Curiam.\n     Margett, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Mobil Oil Corporation, Appellant, v. Paul Rubenfeld, Respondent.
    Supreme Court, Appellate Term, Second Department,
    January 4, 1974.
    
      Bleakley, Platt, Schmidt S Frits {Frederick J. Martin of counsel), for appellant. Anderson, Povman é Warren .{Morton Povman of counsel), for respondent. Louis J. Lefkowits, Attorney-General {Samuel A. Hirshowits, Charles A. LaTorella, Jr., and Peter A. Berkowsky of counsel), amicus curiae.
    
   Per Curiam.

Petitioner Mobil Oil Corporation brings this summary holdover proceeding to recover possession of a gasoline station from the respondent dealer, pursuant to a contractual option to terminate the lease and retail dealer agreement. Respondent alleges, as an affirmative defense,, inter alia, that the petitioner sought to fix and control the retail price of gasoline through means of coercion, which took the form of threatened cancellation of ,his lease. At the trial, respondent raised the additional issue that he was coerced by means of comparable threats, into purchasing tires, batteries and accessories (TEA) designated by petitioner.

Such attempts at retail price-fixing and compulsory purchase of a lessor’s TEA have been held to violate the antitrust laws (see Atlantic Refining Co. v. Federal Trade Comm., 381 U. S. 357; Federal Trade Comm. v. Texaco, 393 U. S. 223; Lessig v. Tidewater Oil Co., 327 F. 2d 459; Broussard v. Socony Mobil Oil Co., 350 F. 2d 346). In Lessig v. Tidewater Oil Co. (supra), the court specifically found that the termination of a gasoline station lease was unlawful, even though in exercise of a contractual right, where the termination was occasioned by the lessee’s refusal to set the retail price of1 gasoline as directed by Tidewater and to purchase TEA designated by it. In view of these holdings, it is our opinion that the defense proffered by respondent is a viable one.

This determination of viability is supported by the doctrine of retaliatory eviction, as set forth in Edwards v. Habib (397 F. 2d 687, cert. den. 393 U. S. 1016). There it was held that a court should not lend itself to the enforcement of a right to evict where the purpose of exercising the right is an illegal one. While in Edwards the eviction was in retaliation for tenant’s reporting of housing violations, a retaliation for a refusal to co-operate in a scheme that has as its object the violation of antitrust laws, is no less unlawful. On a broader basis, public policy would militate against enforcing a contractual right where it is being exercised in furtherance of an illegal end. In L’Orange v. Medical Protective Co., (394 F. 2d 57) it was held that public policy would preclude upholding the cancellation of an insurance policy, even though there existed a contractual right to do so, where the cancellation was exercised for the purpose of coercing and intimidating the insured (a dentist) as a witness in a pending and in future lawsuits.

We also hold that the Civil Court is not deprived of jurisdiction to hear and resolve the issue, although, since the instant proceeding is limited solely to the award of possession, its determination will not have res judicata effect (Mohar Realty Co. v. Smith, 46 Misc 2d 849; see, also, 1966 Commentary to CCA, § 204 in McKinney’s Cons. Laws of N. Y. Book 29A).

Finally, in view of the unrebutted testimony that a harmonious relationship existed between petitioner and respondent dealer until the latter’s refusal to set his gasoline prices as directed, and to purchase the designated TBA, the finding of the court below upholding the defense interposed, should not be disturbed.

The final judgment, in favor of respondent, is affirmed, with $25 costs.

Groat, P. J., and Schwartzwald, J., concur.

Margett, J.,

dissents and votes to reverse the final judgment and enter judgment for the petitioner, in the following memorandum: Petitioner seeks to exercise its right not to renew a lease between the parties and to recover possession of the service station leased by respondent. On the trial of the proceeding, respondent introduced evidence tending to establish that petitioner seeks to oust respondent because of his refusal to engage in price-fixing and practices in restraint of trade. After a rather extended discussion of the facts, the court below concluded that petitioner was seeking to recover possession of the premises in retaliation for respondent’s failure to participate in these illegal practices and dismissed the petition (Mobil Oil Corp. v. Rubenfeld, 72 Misc 2d 892).

The decision of the court below, affirmed ,by the majority here, would deny eviction and would, in effect, direct the petitioner to renew the expired lease (for an indefinite period and at an unspecified rental). In my opinion, the court lacks the power to so rewrite the contract of the parties. (Graf v. Hope Bldg. Corp., 254 N. Y. 1.) In First Nat. Stores v. Yellowstone Shopping Center (21 N Y 2d 630, 638) the 'Court of Appeals quoted with approval the following language from Graf:“ ‘ Stability of contract obligations must not be undermined by judicial sympathy. To allow this judgment to stand would constitute an interference by this court between parties whose contract is clear ’ (Graf v. Hope Bldg. Corp., 254 N. Y. 1, 4-5 [emphasis added] * * *).”

The manifest injustices presented in this case must be redressed by remedial legislation and not by deviating from long-settled principles of private contract and real property law. (See Schwartz v. Heyden Newport Chem. Corp., 12 N Y 2d 212, mod. 12 N Y 2d 1073, cert. den. 374 U. S. 808.) Moreover, inquiry by this court into the questions of whether the lease is unconscionable and whether the lessee acquired a right to remain in possession is foreclosed by the affirmance of the decision in Division of Triple T Serv. v. Mobil Oil Corp. (60 Misc 2d 720, affd. 34 A D 2d 618, mot. for lv. to app. den. 26 N Y 2d 614).

Accordingly, I dissent, and vote to reverse and enter judgment for petitioner.