Case ID: ny-super-ct_42/html/0490-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Speir, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JAMES P. KERNOCHAN, et al., Trustees, &c., Plaintiffs, v. WALTER R. WHITING, Defendant.
    I. LEASE.
    
    1. ASSIGNMENT OF, WHEN PRESUMED.
    
      (a.) A lease was made to A., who formed a copartnership with B. for a term exceeding the demised term, and the firm occupied a part of the demised premises (the rest having been sub-let by A. before the partnership with B.) until November 18, 1875, when it was dissolved. The firm paid the rent up to November 1, 1875. On the dissolution, by arrangement between the partners, all debts owing to the firm were to be received by B., and all demands against it were to be presented to him for payment. B. gave public notice of this, and also that the business would be conducted in the name of B. at the demised premisos. B. remained in the occupancy of the portion of the demised premises previously occupied by the firm, until February 1, 1876, when he was dispossessed. B. collected of the sub-tenants to whom A. had sublet, the rents for their respective premises up to February 1, 1876, and deposited them in bank to his individual account. The lease to A. contained a clause against under-letting without the written consent of the lessors. No consent was given to under-let to B.
    held ;
    in an action by the lessors to recover from B. the quarter’s rent falling due February 1, 1876, the above facts appearing without contradiction, that he was holden as assignee.
    
    Before Speir and Freedman, JJ.
    
      Decided June 25, 1877.
    The plaintiffs leased the premises No. 396 Broadway, New York, for two years from May 1, 1874, to William H. Ward, for $8,000 a year, payable quarterly on the usual quarter days.
    On July 30,1875, Ward entered into partnership with the defendant under the firm name of Ward, Dickson & Co., which was to continue by the partnership agreement for one year from August 10,1875. The business of the firm was carried on at the premises, occupying the first floor of the store and part of the cellar. Ward had, prior to the formation of the partnership, sub-let the remainder of the building, and the tenants were in occupation when the defendant came in. The rent was paid by the firm up to November 1, 1875.
    The partnership of Ward, Dickson & Co., was dissolved November 18, 1875. The notice of dissolution provided that all debts owing to the partnership were to be received by the defendant, and all demands against the partnership were to be presented to him for payment. The defendant remained in possession of the premises until after February 1, 1876, when he was ejected by the plaintiffs. The action is brought to recover the quarter’s rent from November 1,1875, to February 1,1876. Additional facts appear in the opinion.
    A verdict was directed for the plaintiffs, exceptions, to be heard in the first instance at general term. •
    
      G. W. Lockwood, attorney, and of counsel for defendant, on the point on which the court rests the case,, urged:
    The lease was never assigned, nor any part off it. To render the defendant liable as assignee of the lease it must appear that the whole term of the lease was assigned (Davis v. Morris, 36 N. Y. 569 ; Bedford v. Terhune, 30 Id. 453; 27 How. Pr. 472; affirming 1 Daly, 371). Ward never had any conversation with: Whiting about the rent before he became his partner, and then no particular conversation. Nor was there any agreement about the rent, except such as is contained in the copartnership articles. The copartnership articles show that Whiting (the defendant) agreed to pay one-half the rent of the first floor and part of the cellar to Ward. That is the only liability Whiting (the defendant), assumed. There is not a particle of evidence showing an assignment of the lease by Ward to Whiting (the defendant). There was no agreement, except such as is contained in the copartnership articles : “Wo other agreement at all.”
    II. There was no privity of contract between the plaintiffs and defendant (42 N. Y. 201; 42 Id. 316; 15 Id. 374).
    
      Man & Parsons, and W. M. Man, of counsel, for plaintiff, on the point on which the court rests the case, urged:
    I. The defendant is liable for this quarter’s rent as assignee, as alleged in the complaint, in which it is expressly alleged that the defendant became assignee and successor of said Ward in regard to said lease and the possession of said premises. Wo objection is taken that Ward is not joined as a party defendant, which objection must be taken by answer, if at all. The plaintiffs bring themselves, by their evidence, clearly within the doctrine of the case of Bedford v. Terhune, 30 N. Y. 453; which case has never been overruled or modified. We have proved the lease to Ward; we have proved his entering into partnership with the defendant under the firm name as above, and their joint occupancy of the premises ; we have proved the payment of rent by that firm for the quarter ending Wovember 1; the subsequent dissolution of the firm; the defendant taking all the assets and agreeing to pay the debts ; his subsequent occupancy of the premises during the quarter in question; his collection of the rents from the sub-tenants, and appropriation thereof to his own use, and the notice by him that the business would be conducted in his individual name, as successor of the firm. The presumption is, under the case of Bedford v. Terhune, of an assignment from Ward to the defendant, as alleged in the complaint. The burden is thereupon thrown upon the defendant of proving in what capacity he occupied the premises. No such proof was given. No question of fact was requested by defendant’s counsel to be sent to the jury, and the learned judge who tried the case was justified in directing a verdict for the amount claimed, and interest.
   By the Court.—Speir, J.

The action is brought to recover the quarter’s rent from November 1,1875, to February 1, 1876, alleging that defendant became the assignee of Ward. The complaint contains a separate allegation that the defendant was liable to pay the quarter’s rent to the plaintiffs, by reason of his use and occupation. The answer admits the making of the lease, that Ward entered into possession of the premises, and the demand for rent. It denies every other allegation.

If the defendant is liable for the rent to the plaintiffs, in either of the above characters, the judgment appealed from should be affirmed. The premises in question must have been occupied by the defendant, either as sub-lessee of Ward, or as his assignee of the . term, or as tenant of the plaintiffs. By the terms of the lease, Ward covenanted with the plaintiffs not to let or under-let the premises, without the written consent of the plaintiffs; and no such consent is claimed. Privilege was given to sub-let part of the store. There was no agreement to under-let proven, nor is there any fact proved by which an under-letting could in fairness be inferred. It is not to be presumed that Ward and the defendant would transfer the lease, or the term, in such a way as to cause a breach of the express covenant, if by any other mode possession could be acquired by the defendant without producing such a result.

The action for use and occupation is founded upon contract, and lies only when the relation of landlord and tenant exists. Such relation does not appear in the case. The power to occupy and enjoy must be given by the landlord to the tenant. The defendant’s power was derived from Ward, the lessee, who held the unexpired lease from the plaintiffs. The presumption upon the facts proved would be that the transfer to the defendant was by assignment and not by under-letting. The defendant by arrangement held for the whole residue of the term, and his partnership agreement with Ward extended beyond the term (Davis v. Morris, 36 N. Y. 569). The business of the firm was carried on at the premises, and the rent was paid by the firm to the plaintiffs up to November, 1875. The partnership was dissolved on the 18th of said November. The notice of dissolution provided that all debts owing the partnership were to be received by the defendant, and all demands against it were to be presented to him for payment. Appended to this notice was the following: “ The business will be conducted in the name of Walter B. Whiting,” the defendant, “as successor to Ward, Dickson & Co., at 296 Broadway, New York City,” being the demised premises. The defendant remained in possession of the premises until February 1, 1876, when he was ejected by the plaintiffs, and for the same reason as the lessee could have been ejected, had he continued in possession and failed to pay. The defendant had collected the rents from the sub-tenants who had been put into possession of parts of the store by the lessee, including the quarter’s rent for which this action was brought, and put the money in bank to his own individual account.

When the transfer is for the whole term the person taking is an assignee and not an under-tenant, although there is a formal under-letting. ‘‘ The ordinary distinction between an assignment and an under-lease is, that the former transfers the land for the whole term, the latter for only a part of it” (1 Hilliard’s Abridgment, 126, § 55).

It being shown that the defendant occupied the whole of the unexpired term of the lease to Ward, or could have done so by his arrangement with Ward, in the same manner as Ward could, by paying rent to the plaintiffs, the fair presumption is that he entered for the whole unexpired term, and as such interest is given, not by an under-lease but by an assignment, the further presumption must be that the defendant was in as assignee, and not as under-tenant. If he was in as under-tenant, he would not be liable to the plaintiffs for rent, either in an action on the lease, or for use and occupation (Woodfall's L. & T. 358 ; 1 Chitty Pl. 36).

The evidence clearly established a prima fade case of an assignment to the defendant of the term. If there was, in fact, no assignment, the defendant could not be made liable. But as the law infers an assignment from certain facts proved, the inference must be of a valid operative assignment, sufficient to -transfer the term. The onus was on the defendant to prove either that there was no assignment, or that it was void in law. Instead of making such proof, he rests upon the case as made by the plaintiffs, andas the case made fixes his liability, he should not complain (Bedford v. Terhune, 30 N. Y. 454). Although there are dissenting opinions in this last case, the law, as settled, seems not to have been disturbed.

The defendant’s exceptions must be overruled, and the plaintiffs must have judgment upon the verdict, with costs.

Freedman, J., concurred.