#### The Importers and Traders’ Insurance Company, plaintiffs and respondents, *vs.*John S. Christie, impleaded, &c. defendant and appellant.

1. Where there is no covenant in a lease restricting the use of the premises by the lessee, but only by sub-lessees, such sub-lessees are bound by the covenant, because it runs with the land.

2. Though possibly an injunction order might be obtained, if applied for before hand, against a sub-letting for occupations forbidden by the lease, if threatened, yet after a sub-lease is executed, the lessors are confined to damages for breach of covenant against the original lessee. He cannot be restrained in his use of the premises, and after he has parted with the right to the possession, it would be useless.

3. Where a lease contains a covenant on the part of the lessee not to under let the premises, to any one whose business or signs are considered objectionable by the lessor, or without his written consent, an .injunction order is only proper against a sub-lessee in case the business intended to be conducted by him should prove “ objectionable ” J» the lessor, within the meaning of the covenant.

*1704. Although a lessee is liable for nominal damages for breach of his covenant as to sub-letting without the consent of the lessor, it is not easy to lay down a . rule of damages therefor, or„for the sub-letting for an *objectionable*business, if he has done so. *Per*Robertson, Oh. J.

5. Where ’ he" is not connected with any acts of the sub-lesseé charged in the complaint, the award of any thing but nominal damages against him is erroneous.

6. The acceptance of rent due after a forfeiture has occurred by the breach of a condition in the lease as to under letting, after an action has been commenced to recover the demised premises for such forfeiture, is not a waiver of it.

(Before Robertson, Ch. J., and Barbour and Monell, JJ.)

Heard April 11, 1867;

decided October 7, 1867.

This action, as appears by the demand for relief in the complaint, is brought to recover certain demised premises, by reason of forfeiture of a term therein, for non-payment of rent; also damages for loss of rent; and to prevent the defendants from using the premises in a specified way. It was begun in March, 1866.

On the 1st of August, 1864, the plaintiffs by a bipartite instrument under seal demised to the defendant Christie the basement or lower floor of the building * * 100 Broadway, excepting and reserving to themselves “the right to pass coal through the front entrance of said basement from the walk, and alongside of the front of their heating furnace, together with the coal and wood bins adjoining . the same; also the right of uninterrupted entrance from the rear of said basement to and the exclusive use of said furnace, and the water closet- * * in the northeast corner of said basement, with the appurtenances, for the term of two years and nine months” from the 1st of August, 1864, at the yearly rent of $450 payable quarterly.

It was agreed in such instrument that if the rent should he unpaid, or default should he made in any of the covenants therein contained, it should be lawful for the plaintiffs to re-enter such premises and repossess the same. The defendant Christie agreed thereby not to underlet such premises, or any part thereof, to any one whose business or signs should “be considered objectionable by” the plain*171tiffs, or “without their written consent first obtained.” He further agreed to restore to its then order his water closet in the basement, if he allowed the tenants of the upper floors of such building so to make use thereof, as to overflow or in any other way damage it. It also contained covenants for quiet possession, and surrender in as good condition as reasonable use and wear and damages from the elements would permit.

In February, 1866, the defendant Christie, without any written consent of the plaintiffs, underlet the whole of the premises to the defendant Lyon and one Peter E. Lyon, who commenced to make alterations therein, prepared a counter for a restaurant, constructed a bar, introduced liquors, and made all the preparations usual for a restaurant; They remained in possession until April, 1866.

The complaint set forth the execution of the lease to the defendant Christie, and alleged that he proposed on taking the premises to use them for offices, and fitted them up therefor. It also set forth the underletting to the defendant Lyon; his taking possession of the premises and making alterations therein, and alleged that the business he was about to carry on therein would injure the plaintiffs in their business as an insurance company. That Lyon proposed “to change the conductors of heat from the furnace below the basement, through it, in a manner to be seriously detrimental to ” the plaintiffs in their business. The answer of the defendant Christie admitted the execution of the lease, and the occupation of the premises by him until the lease to the two Lyons, and set forth such letting to them, denied any present occupancy or possession by him, and admitted that the sub-lessees intended to use the premises as a lunch room. It denied that their business would injure the plaintiffs in their business, and controverted all other matters alleged in the complaint.

After the commencement of this action the defendant Christie, on the 1st of May, 1866, paid to the secretary of the plaintiffs,.who accepted it from him, the sum of $112.50, *172which was the rent due on that day, and the defendant Christie, on the 9th of the same month, put in a supplemental answer setting up the payment and receipt of such rent as a defense, and also that such defendant had ejected his co-defendant from such premises, since the commencement of this action, and was at the time of putting in such answer in possession thereof.

On the 10th of May, 1866, the plaintiffs filed a supplemental complaint, alleging that since the commencement of this action the defendants debarred the plaintiffs from the use of the furnace on the premises mentioned in such lease, and thereby prevented them from heating their offices for a long time, greatly to their injury and that of their business, but such supplemental complaint contained no demand for relief. The defendant Christie controverted the allegations of such complaint in his answer thereto.

Only the defendant Lyon answered -the original complaint. In such answer he admitted the making of the lease from the plaintiffs to the defendant Christie, who underlet them to him, but controverted any understanding by such defendant with the plaintiffs as to the use of the building, or want of a consent by the latter to its underletting. It also denied that the business of the defendant would injure the plaintiffs in their business, or that he intended to keep a bar-room or restaurant on such premises, or that he proposed .to make any change in the conductors of heat from the furnace below such basement, through it, or into the plaintiffs’ offices or elsewhere. It averred that the only business he intended to conduct was a lunch room; denied that he intended to cook any food upon such premises ; and alleged that he intended to conduct his business in a quiet, cleanly, orderly and un exceptionable manner. It also averred that the only changes he had made was to remove temporary movable wooden partitions, placed there by the defendant Christie at his own cost, in such a manner as to leave the basement unobstructed, and that he had placed a proper shelving and counters theréin.

*173No answer was put in by the defendant Lyon to the supplemental complaint, nor does any action seem to have been taken on .the same against him.

The issues made in this action were tried before Justice McCuKfisr, in June, 1866, without a jury, who rendered a decision containing findings of fact. The facts found- by such decision were, the making of the lease to Christie, set out in the complaint; a concurrent agreement by him to use the premises as offices; the underletting to Lyon without the consent of the plaintiffs; his alteration of the premises for a restaurant and bar-room business, and putting in fixtures for an oyster cellar and a bar, with liquors, wines and beer; the injury to the business of the plaintiffs from conducting such business; the exclusion of the plaintiffs, by the defendant Lyon, from the use of the furnace in question, and consequent injury to their business ; the payment by the defendant Christie, and the receipt by the plaintiffs, of the quarter’s rent dne on the 1st of May, 1866, but without the knowledge or supposition by either party that such payment and receipt would affect the right of the parties; and that this action was treated at the time of such payment, by both parties, as an existing action.

The conclusions of law, in such decision, were that the plaintiffs were entitled to recover possession of such premises, and to have such lease determined, also $75 for damages and loss of rent sustained by them, and to have the temporary order theretofore made in the action, restraining the defendants from doing certain acts, made perpetual, and have such defendants perpetually enjoined from using any part of such premises in a manner forbidden by such temporary order.

Upon the trial the president, (Brokaw,) secretary, (Bal. lard,) and a clerk (Martin) of the plaintiffs, were the only witnesses examined for them. The defendant Christie was examined as a witness on his own behalf.

Mr. Brokaw testified that the defendant Christie used the premises while he held them for offices; that he let them to *174the defendant Lyon, who constructed a bar in them and introduced liquors; made all the preparations for, and said he meant to use them as, a restaurant. That such restaurant would affect the plaintiffs’ business detrimentally. That the entrance to such premises was directly under their window. That they were driven from the basement by the defendant Lyon on one occasion, when they went to make a fire in the furnace, and were kept two weeks without heat. That he received the rent from the defendant Christie on the 1st of May, 1866, without understanding that he waived by it, or that it affected, any rights of the plaintiffs. Nothing was said about its affecting this action.

Mr. Ballard testified that he did not know, in receiving the rent, that it affected the rights of the plaintiffs. Any number of persons going into the basement would obstruct the light of the plaintiffs; their entire bodies would be in the light. The smell of a restaurant would be offensive; its use as a thoroughfare, drinking and smoking, would be detrimental to the business of the plaintiffs, and a nuisance. It is necessary for an insurance company that claims to be respectable, to have every part of its premises respectable, and- the plaintiffs would not consider a restaurant or barroom respectable. He saw the bar and liquors, going down. It would be a nuisance to the plaintiffs, if not any where else. There is a lunch room under The Excelsior Insurance Company, which they let for a restaurant.

Mr. Martin testified that the defendant Lyon put up a counter, bar, fixtures and the like, and an oyster stand; he told him he was going to have lunch, cold cuts, oysters, raw and cooked, and the like. He saw liquors there in demijohns and bottles. The defendant Lyon prevented his going down to make a fire, and the premises were locked for two weeks afterwards. He did not see any cooking apparatus.

An affidavit of the defendant was offered in evidence in which he had stated that in pursuance of a covenant of such *175lease before mentioned, he had paid to the plaintiffs the rent for .one quarter of such premises. The defendant Christie testified that Lyon was in possession until April, 1866; no other evidence was given that the premises had gone back into the possession of the former.

Exceptions were taken to the admission of the testimony respecting the acts of the defendant Lyon; the understanding of the plaintiffs as to the receipt of the rent; the effect on the respectability of the plaintiffs of having a restaurant in the same building; the refusal by the defendant Lyon of access to the furnace, and the admission of the affidavit of the defendant Christie.

Exceptions were filed by the defendant Christie to every finding of fact and conclusion of law in the decision, and an appeal was taken by him from the judgment.

*E. J. Pattison,*for the appellant, defendant.

I. The underletting is not a breach of any covenant contained in the lease. *(Jackson*v. *Harrison,*17 *John.*66.) Assuming the agreement not to be a separate and independent agreement, it is void against it, because it is hard and onerous, shackles and embarrasses the tenant, and is a perpetual restriction and incumbrance. The court will not enforce a covenant embracing a hard bargain. *(Doe*v. *Phillips,*9 *Moore,*46.) With respect to provisions of reentry upon breach of conditions other than for the nonpayment of rent, every doubtful grant shall be construed in favor of the grantee. (Tillinghast's *Adams on Eject.*175.)

II. The receipt of rent accruing since the alleged forfeiture is a waiver by the plaintiff of all rights to re-enter by reason of a violation (if any) of the covenants in the lease. (*Willard on Real Estate and Conveyancing,*108. *Bleecker*v. *Smith,*13 *Wend.*530. *Jackson*v. *Allen,*3 *Cowen,*220.)

III. The injunction cannot be sustained as against the defendant Christie, there being no covenant or condition in the lease restraining him from carrying on any kind of business; this restriction in the lease applying only *176*to such party to whom the defendant Christie may underlet the premises.*

IV. Under this judgment, the plaintiff can object to any business, however reputable, that Christie or his tenant might attempt to carry on, and the first notice of the plaintiff’s objection would be by suit. It places the defendant Christie, the lessee, absolutely in the power of the lessors, and deprives him of the use of the premises, but at the same time holds him for the rent.

*<x. S. Parsons,*for the respondent, plaintiff.

I. The underletting is not denied by the answer, and was proved on the trial. This was clearly a breach of the covenant not to underlet, and worked a forfeiture of the term. (2 *Co. Litt.*204 *a. Lynde*v. *Hough,*27 *Barb.*415.) The further violations of the covenants by Lyon were sufficient to work a forfeiture.

IT. Courts of equity will grant an injunction enforcing specific performance, to restrain the violation by a tenant of covenants contained in his lease, (Waterman *& Eden on Injunctions,*236;) also, to restrain a breach of covenant against converting a house to a different use from that prescribed or agreed for. *(Id.)*

In construing a covenant, the inquiiy always is, what was the intention of the parties. It was evident from all the testimony, that it was the intention of the parties to this lease, that the premises should not' be used for any other purpose than offices, nor in a manner objectionable to the plaintiffs.

TIT. The evidence which showed for what purpose Christie hired the basement, and how he used it while he held it, was proper. It did not contradict the terms of the lease, but tended to explain them. It also proved that he was guilty of a willful breach of the covenant in so underletting the premises. The same fact was alleged in the complaint, and not denied in the answer.

*177IV. It is not competent for the defendant Christie to say now, for the first time, that we are not entitled to the injunction, as against him.

1. The objection, if valid, relates to what appears upon the face of the complaint, and he should have demurred, or have moved to modify the injunction order in that respect.

2. The objection was not taken by demurrer, answer or at the trial; it cannot be taken for the first time on appeal. *(Pope*v. *Dinsmore,*8 *Abb.*429. *Carley*v. *Wilkins,*6 *Barb.*558. *Mosselman*v. *Caen,*34 *id. 66.)*

V. The receipt of rent, after the landlord has actually commenced his action for the forfeiture, does not amount to a waiver. *(Taylor’s Landlord and Tenant, 4th ed.*361. *Doe*v. *Meux,*4 *Barn. & Cress.*606.) Besides, the original lessee who paid the money *was not treated as tenant*when the rent was paid; he only paid damages which he was personally liable to pay, notwithstanding the forfeiture of the term, *(Hinsdale*v. *White, 6 Hill,*511. *Cushingham*v. *Phillips,*1 *E. D. Smith,*416.)

VI. The doctrine that the acceptance of rent, after forfeiture, is a waiver, is one of *intent;*it being inferred from •the payment and acceptance of rent that both parties recognize the lease as still valid; but the contrary may be shown. *(Manioe*v. *Millen,*26 *Barb.*41.)

1. The contrary was shown in this case, and the court below so found as matter of fact.

2. The principal relief sought is to have the lease declared forfeited and ended on account of the breaches of its covenants by both defendants, and the injunction was merely auxiliary; so that by section 148 of the Code the ■objection must be deemed to be waived. *(Zabriskie*v. *Smith,*13 *N. Y. Rep.*322.)

Christie was a stranger to the premises at the time the injunction was issued, having parted with the right to possession, and to the possession and control of the place, *178and the term having been ended by the wrongful act of the defendant Christie, in underletting as he did, and by the acts of the defendant Lyon, for which the defendant Christie was responsible, the parties were trespassers, and. could properly be enjoined at the suit of the plaintiffs. *(Hinsdale*v. *White, supra.)*

By the Court, Robertson, Ch. J.

The relief demanded in this action by the original complaint was three fold; the forfeiture of the lease by the defendant Christie, and damages for his violation of a covenant therein by him not to underlet the premises, as well as a prohibition against any future use of them in a certain specified manner. The supplemental complaint does not contain any demand for any relief. This action is not a substitute for an action of waste as allowed by the Code of Procedure, (§ 450,) in which both the land and damages can be recovered; because no injury to the demised premises or the reversion is set up, but only to the business of the plaintiffs in the same building.

The covenant for or against a particular use of the demised premises can, of course, be specifically enforced. *(Steward*v. *Winters, 4 Sandf. Ch.*589. *Howard*v. *Ellis,*4 *Sandf.*369. *Seymour*v. *McDonald,*4 *Sand. Ch.*502.) But in this case there was no covenant limiting the use of the premises by the originallessee, but only by sub-lessees. Such sub-lessees are bound by tiie covenant, because it runs with the land. Possibly an injunction order might have been obtained before hand against sub-letting for the forbidden occupations if threatened. But after the sub-lease was executed, the plaintiffs were confined to damages for breach of covenant against Christie. No injunction lay against him for his_use .of the premises, and after he had parted with the right to the possession it would be useless. The injunction, therefore, was only proper against the sub-lessee in case the business intended to be conducted should prove *“objectionable*” to the plaintiffs within the meaning *179of the covenant in the lease. But' it is not necessary to discuss his liability, as he has not appealed. So far as the judgment covers any use by the defendant Christie of the premises, it is erroneous.

Although, of course, the defendant Christie is liable for nominal damages for breach of his covenant as to sub-letting without the consent of the plaintiff, it is not easy to lay down a rule of damages therefor, or for the sub-letting for an *objectionable*business, if he has done so. The sum of $75 is awarded for damages and loss of rent, in the judgment ; but for the rent of what does not appear. It could not be of the demised premises upon the ground of forfeiture, because, although mesne profits might be recovered for holding over after it, they must be recovered in a separate action. *(Holmes*v. *Davis,*19 *N. Y. Rep.*488.) The plaintiffs undertook to prove damages to themselves, not as reversioners of the demised premises, but as occupants of another part of the same building, and as carrying on therein a peculiar business; which is not referred to in the lease. The only *objections*they relied upon in evidence were, *jirst,*the diminution of their respectability by having a restaurant in the same building; *second,*the nuisance of the odors of cooking and of the eating, drinking and smoking therein, and, lastly, intercepting daylight from their windows by the passage of the bodies of persons in front, descending into the basement. There was no evidence offered of any loss even of contracts of insurance, or indeed of pecuniary loss, by the refusal of parties to deal with the plaintiffs on account of such restaurant. Indeed there is nothing before us from which to make even a conjectural estimate of damages, and the original complaint is entirely for breach of contract, not for a tort. The defendant Christie is not connected with any acts of his co-defendant charged in the supplemental complaint, and therefore no damages could be recovered against him therefor. The award of any thing but nominal damages against him in the judgment, was erroneous.

*180It is so doubtful whether any prejudice of the business entered upon by the defendant Lyon to the mere peculiar business of-the plaintiffs, rendered the former objectionable within the meaning of the covenant in the lease as to make it a cause of forfeiture, that its consideration may be laid aside. If it were so, as the covenant runs with the land every subsequent grantee of the reversion might *object*to the business of any sub-lessee which interfered with his own, although it might not with that of the plaintiffs, and the prejudice might not depend even ( upon their being in the same building.

But as the premises were sub-let without any written consent of the-plaintiffs, the original lease became forfeited, unless the forfeiture was waived. The only waiver pretended is that set up in the supplemental answer, of the acceptance of rent due after the supposed forfeiture. But that was paid in satisfaction of the covenant, which is a contract, and not affected by a forfeiture of the land, which is a condition of the estate. Its obligation remains, although the relation of landlord and tenant is gone; and the receipt of rent voluntarily paid does not re-establish it; there is no unlawful act of the landlord done, which would defeat the claim for rent, but the forfeiture is produced by a failure of the tenant to do, what he was bound to perform. It was, besides, not for non-payment of rent; but for another cause. No one is prohibited from agreeing to forfeit an estate for a particular act or omission, and yet pay rent reserved, and Christie did that precisely in this case. *(Hinsdale*v. *White,*6 *Hill,*511.) He, in fact, agreed to pay the rent, not for an indefeasible estate, but for one liable to be defeated by his non-performance of his covenants.

None of the evidence objected to in this case related to the question of *forfeiture; it*all related to those issues on which a right to an injunction and damages depended. It is easy, therefore, to separate the facts found upon the strength of it, from those on which the right of forfeiture rests, as they are set out in tiie decision of the court. The *181want of a written consent to underlet was admitted; the judgment of eviction was therefore proper; and neither such evidence nor any exceptions to the same affect it. It is unnecessary, therefore, to pass upon such exceptions, which affect only the question, of damages and the injunction, as to which the defendant Christie is entitled to have the judgment reversed or modified.

There was no evidence to connect the defendant Christie with the trespass set forth in the supplemental complaint, and he is therefore entitled to judgment on that issue. But the plaintiffs, upon the basis of an accidental finding of a fact which is contained in the decision of the court, although not put in issue by the pleadings, or sustained by any evidence, claim that the, defenüant Christie, under a separate (parol) agreement made between him and the plaintiffs, concurrently with the delivery of the lease, bound himself *not to use the demised premises except for offices.*If any such agreement was ever made, it could hardly have remained binding after the lease was executed; that demised the premises free from any restriction as to their use or enjoyment, except by sub-lessees of the defendant Christie, and then only as to the affixing of signs, or some other use *“ objectionable*” to the plaintiffs, (whatever *that*meant,) the remedy for which was their dispossession in consequence of forfeiture of the lease thereby. There were also certain reservations in such lease, and a covenant for the surrender of the demised premises in good order at the end of the lease. It •would seem, therefore, that the parties had embodied in such lease all the restrictions upon the enjoyment or use of such premises, to which they had intended to agree, or which they required. And although a concurrent separate parol agreement upon matters not disposed of by a sealed instrument, and not interfering with rights thereby granted, may be enforced, yet it is extremely doubtful whether such an agreement as that supposed could interfere with the unlimited right of use and enjoyment of the premises conferred by the lease; and also whether the parties, not having *182deemed it worth inserting in the more exact, durable, reliable and solemn written evidence of their compact, it is not to be classed among those preliminary understandings which are considered as merged in the final written contract. The enforcement of specific performance of such a collateral loose agreement would be of still more doubtful propriety.

But such agreement, if made, would not authorize an injunction against the defendant Christie after (as in this case) he had sub-let the premises to others. If their use of it was imputable to him, as his, under such an agreement, an injunction against him could not reach his sub-lessees', and it was therefore entirely nugatory. It would have been a mere personal contract resting in damages after the defendant Christie parted .with the right of possession of the premises, and his sub-lessee or assignee could not be enjoined from a use, of the restriction upon which, they knew nothing.

As, however, I have already stated, no agreement of the kind found appears in the pleadings. The complaint merely alleges that the defendant Christie, when taking the lease, *proposed*to use the *premises for offices*and actually fitted them as such. This is far different from an agreement never to use them for any such purpose, and created no obligation; and there is no pretense of any fraudulent representation. Even that statement, however, is controverted in the defendant’s answer, and no evidence of it or of the supposed agreement, as found in the decision, was offered on the trial. The only reference to *offices,*in the evidence, is that in the testimony of the president of the plaintiffs, (Brokaw,) who testified that the defendant Christie *used the premises as offices.*Although such injunction may not have caused any damage, it should not be retained.'

There was no evidence in the case that the defendant Christie excluded the plaintiffs from the use of the furnace. Their right to such use was a mere reservation in the lease, and those who interfered with it were, of course, liable as trespassers.

*183In order to avoid all questions as to the power of the court to modify the judgment as rendered, it must be reversed, and a new triaTkad, unless the plaintiffs consent to a modification of it by reducing the damages against the defendant Christie to a nominal sum, striking out the continuance of the injunction against him as to the use of the premises, giving judgment in his favor on the supplemental complaint, and striking out the costs against him, as he succeeded on one issue. In such case it may be so modified, without costs of the appeal to either party.