Case Name: Margaret N. O'Leary et al., Landlords, Appellants, v. Nicholas C. Hallies, Tenant, and Raymond Brost et al., Undertenants, Respondents
Court: New York Supreme Court, Appellate Term
Jurisdiction: New York
Decision Date: 1950-03-16
Citations: 198 Misc. 341
Docket Number: 
Parties: Margaret N. O’Leary et al., Landlords, Appellants, v. Nicholas C. Hallies, Tenant, and Raymond Brost et al., Undertenants, Respondents.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 198
Pages: 341–347

Head Matter:
Margaret N. O’Leary et al., Landlords, Appellants, v. Nicholas C. Hallies, Tenant, and Raymond Brost et al., Undertenants, Respondents.
Supreme Court, Appellate Term, First Department,
March 16, 1950.
Abraham Nayowits and Leon London for appellants.
Joseph A. Muccia for respondents..

Opinion:
Hammer, J.
The petition alleges that the premises are occupied for business purposes and that the tenant entered into pos session of said premises and still occupies the same as a statutory tenant; that on the first day of November, 1949, there was due the landlords $471.50 for rent for October and November plus $6.84 plate glass insurance, $24 for water from August 24 to November 15, 1949; that the rent has been demanded personally from the tenant, that the tenant has defaulted in payment, and the tenant and undertenants hold over without permission.
The tenant defaulted on the trial.
The undertenants Brest and Farrell deny all the allegations of the petition except the allegations of ownership and of the tenancy and subtenancies; plead that the landlords had knowledge and notice of their subtenancies and consented thereto and further plead that they had tendered to the landlords the rent they were paying to the tenant, and also tendered the fair and reasonable value to the landlords of the space they occupied, which tenders were refused.
The demised- premises are '6 the space known and described as the corner store and basement space under said store in the building known as 502 Ninth Avenue. ' '
By the terms of the lease (par. 2) " the-tenant will not sell, assign, or mortgage this lease, or any part thereof or of the term hereby granted, underlet the whole or any part of the premises without the landlords' written consent * # * ", and (par. 39) " Anything herein to the contrary notwithstanding, it is understood and agreed that the tenant may sublet the space now partitioned as a stand on West 38th Street for any lawful business
In the landlords' reply brief it is further stated that the owner of the premises is willing to accept the subtenants in their illegal tenancy provided that they pay the entire rent due or take over the entire premises.
The subtenants, as already stated, claimed they were entitled to retain possession so long as they paid to the landlords the rents payable by them to the tenant, and the justice sustained their contention. See opinion below.
It appears that the Brost subtenants occupy the sidewalk stand plus a space twelve feet wide by four feet deep which formerly constituted the entire show window, plus all of the basement except the front portion of the basement reserved by the tenant Hallies, and the four foot by twelve foot portion occupied by the subtenant Farrell and the boiler room, and that the main tenant retained the balance of the store and a part of the front cellar. According to the landlords none of the spaces are partitioned off except the show window. The cellar space is just
part of the open cellar. As to the partitioning, respondents state that in the more valuable store space Brost's premises are £< completely sub-divided and partitioned off from the remainder of the store ", and££ in any event there is not one iota of evidence that the respective spaces cannot be partitioned." In 214 West 39th St. Corp. v. Miss France Coats, Inc. (274 App. Div. 597, 599, 600) the court says: " If the main tenant is no longer to be regarded as the tenant of the entire demised premises, how can he sign a renewal lease in the absence of an emergency rent for the smaller space? Then, too, in the case where there are multiple subtenants with whom the landlord has no privity, can it be said that the statute thrusts upon a landlord in substitution for a single tenancy of the entire premises, two or more tenancies for subdivided rental units? ° ® If we were to adopt the theory of plaintiff here, it might in many cases be utterly impossible to require a subtenant to attorn to a landlord with whom he had no contractual relationship, particularly where the subtenant has arranged for ingress and egress through the tenant's retained space or for the furnishing by the tenant of such facilities as stenographic and telephone services or the right to the use of tenant's equipment."
In City Textile Print. Corp. v. Zenith Grainer & Litho Equipment Corp. (275 App. Div. 800) cited by the Trial Judge — which seems to be the latest pertinent decision of the appellate court — it is said: " Landlord-appellant's predecessor in title leased the westerly portion of the ground floor of the building at 336 East 28th Street, Borough of Manhattan, City of New York, to a tenant which occupied part of the demised premises for its own purposes and, before the termination of the lease, sublet the balance of said rental area to undertenants. The term of the lease has now expired, the tenant has surrendered possession of the part of the demised premises, which it occupied, and the landlord-appellant seeks to evict the undertenants. The undertenants-respondents are entitled to the protection of the Commercial Rent Law (Tighe v. Sinclair Refining Co., 274 App. Div. 22), and we think that this is true notwithstanding that said undertenants occupy but a portion of the entire rental area. The attorney for the undertenants-respondents upon the argument expressed a willingness on the part of his clients to absorb the entire rental area at the same rental previously charged for the entire space and, in any event, the court should readily be able to apportion a correct rental to the part of the rental area now occupied by the undertenants."
In this case, contrary to the position taken by the subtenants in the City Textile case (supra), respondents refuse " to absorb the entire rental area at the same rental previously charged for the entire space ", and the space here is not apportionable.
Section 13 of the Business Rent Law (L. 1945, ch. 314), as amended by chapter 535 of the Laws of 1949, provides: 1 ' the provisions of any lease for a term of more than three years, in force since on or before June first, nineteen hundred forty-four, wherein the rental stipulated is in a graduated scale, shall determine the rents payable during the term of such lease notwithstanding the subsequent modification of any of its terms; and upon the expiration of such lease, the emergency rent shall be a reasonable rent to be fixed by agreement, by arbitration, or by the supreme court upon the basis of the rent charged for the most nearly comparable business space in the same building or other rental area, or other satisfactory evidence, at the time of such agreement, or on the date the application to the supreme court or submission to arbitration is made. Pending the fixation of such reasonable rent, without prejudice to their respective rights, the tenant shall pay and the landlord may accept rent upon the basis charged during the last month of the expired lease."
It would seem that at the termination of the first, graduated lease the tenant was no longer a tenant at a graduated rental under the emergency statute — in other words, the graduated lease then ended; thereafter, throughout the three-year extension, his status was that of a tenant at the fixed, monthly rental of $205; so that the landlord was entitled to collect that amount, the rent on the freeze date, plus 15%. No question was raised on the trial as to the fairness of the rent, the sole objection in that regard being that it was not the reasonable rent, fixed as provided by section 13 of the Business Rent Law.
Fixation of the statutory amount to be paid by the tenant as rent is not a judicial but a legislative act, not reviewable by the court, and upon the facts presented here the effect of the final order would be to deprive the landlords of their rights under the business emergency statute (Wasservogel v. Meyerowitz, 300 N. Y. 125).
The final order and judgment so far as appealed from should be reversed, with $30 costs, and final order and judgment directed in favor of the landlords against the tenant and undertenants for nonpayment of $502.30, rent due, with interest and costs, with leave to respondents within eight days after service of order entered hereon, to pay said sum.