Case Name: Conditioner Leasing Corp., Respondent, v. Sternmor Realty Corp., Appellant, et al., Defendants
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1966-01-13
Citations: 17 N.Y.2d 1
Docket Number: 
Parties: Conditioner Leasing Corp., Respondent, v. Sternmor Realty Corp., Appellant, et al., Defendants.
Judges: 
Reporter: New York Reports
Volume: 17
Pages: 1–6

Head Matter:
Conditioner Leasing Corp., Respondent, v. Sternmor Realty Corp., Appellant, et al., Defendants.
Argued January 3, 1966;
decided January 13, 1966.
Joseph Greenberg, Murray L. Gilman and Isidore A. Seltzer for appellant.
I. A purchaser of real estate in the absence of specific agreement to the contrary does not become obligated to pay his grantor’s debts. (Langel v. Betz, 250 N. Y. 159; Title Guar. & Trust Co. v. 457 Schenectady Ave., 260 N. Y. 119; General Meter Serv. Corp. v. Manufacturers Trust Co., 182 Misc. 184, 267 App. Div. 992.) II. Mere prevention by appellant of respondent’s removal of its units is not to be treated as the equivalent of an assumption by operation of law. (Frank v. New York, L. E. & W. R. R. Co., 122 N. Y. 197; Tel-Hotel Corp. v. Lexnott Corp., 205 Misc. 576; Matter of Kaufman, 272 App. Div. 578.) III. Respondent’s lease having been subordinated to the rights of the first mortgagee, appellant had no right and could not permit plaintiff to remove its units, absent the unequivocal consent of said mortgagee. Such consent was never obtained. (McCloskey v. Henderson, 231 N. Y. 130; Chasnov v. Marlane Holding Co., 137 Misc. 332.) IV. If appellant’s refusal to permit respondent to remove its units can be held to constitute an assumption of the lease, as decided by the majority opinion of the Appellate Division, it is nevertheless settled law that appellant would only be liable for breaches which occurred after its alleged assumption and not for breaches which had occurred prior thereto. (Townsend v. Scholey, 42 N. Y. 18; Mann v. Munch Brewery, 225 N. Y. 189; Trustees of Columbia Univ. v. Rathbone, 172 App. Div. 902, 227 N. Y. 560.) V. The lease sued upon was merely a bailment. Respondent’s claim against appellant, if sustainable in any event, would be either in conversion or replevin and not for the past due accelerated rent. (Chamberlain v. Pratt, 33 N. Y. 46; Hood Farm v. Roberts, 254 App. Div. 383; Goulet v. Asseler, 22 N. Y. 224; Prince v. Conner, 69 N. Y. 608.) VI. The provision in the lease for acceleration of the rent, upon default in payment of rent or other performance of any other covenant on the part of the lessee, is an unenforcible penalty. The lease must be interpreted as of its date and not as of its breach. (Seidlitz v. Auerbach, 230 N. Y. 167; Lenco v. Hirschfeld, 247 N. Y. 44.) VII. The lease sued upon was terminated by plaintiff’s unilateral election. Hence, it could not be revived and assumed by appellant by operation of law in any case. (Helgar Corp. v. Warner’s Features, 222 N. Y. 449; Howes v. Peckham Rd. Corp., 14 A D 2d 940.)
Burton M. Fine, Robert L. Tofel and Meyer Maltz for respondent.
I. Appellant had notice and knowledge of the lease at the time it purchased the premises in which the air conditioners were installed and thereafter continued to use them for its own benefit. Its conduct constitutes an assumption of the obligations of that lease. (Frank v. New York, L. E. & W. R. R. Co., 122 N. Y. 197; Daliendo v. Minardi, 195 Misc. 657; Tel-Hotel Corp. v. Lexnott Corp., 205 Misc. 576; Gillette Bros. v. Aristocrat Rest., 239 N. Y. 87; Mann v. Munch Brewery, 225 N. Y. 189; General Meter Serv. Corp. v. Manufacturers Trust Co., 182 Misc. 184, 267 App. Div. 992; Neponsit Prop. Owners’ Assn. v. Emigrant Ind. Sav. Bank, 278 N. Y. 248; Nicholson v. 300 Broadway Realty Corp., 7 N Y 2d 240; Frankel v. Tremont Norman Motors Corp., 21 Misc 2d 20, 10 A D 2d 680, 8 N Y 2d 901.) II. By using the units and availing itself of the benefits of the lease, appellant has assumed the obligations thereunder. (Matter of Kaufman, 272 App. Div. 578.) III. The second mortgagee having consented to removal and the first mortgagee having had no objection to removal, if replaced, there was no impediment to removal of the units. (McCloskey v. Henderson, 231 N. Y. 130; Chasnov v. Marlane Holding Co., 137 Misc. 332.) IV. The acceleration clause contained in the lease is valid and binding. (Matter of Judy Bond, Inc. [Kriendler], 36 Misc 2d 943; Seidletz v. Auerbach, 230 N. Y. 167; Belnord Realty Co. v. Levison, 204 App. Div. 415.) V. The lease was not terminated. (Muzak Corp. v. Hotel Taft Corp., 1 N Y 2d 42; Cammack v. Slattery & Bro., 241 N. Y. 39; Helgar Corp. v. Warner’s Features, 222 N. Y. 449; Howes v. Peckham Rd. Corp., 14 A D 2d 940.)

Opinion:
Van Voobhis, J.
Regardless of whether appellant be deemed to have assumed the lessee's obligations under this lease of air-conditioning equipment, the cases hold that having taken possession of the leased property under the circumstances disclosed by the record, appellant became at least an assignee, and, therefore, liable for payment of the accelerated balance of rent without assumption of the lease (Gillette Bros. v. Aristocrat Rest., 239 N. Y. 87; Frank v. New York, L. E. & W. R. R. Co., 122 N. Y. 197; Mann v. Munch Brewery, 225 N. Y. 189; General Meter Serv. Corp. v. Manufacturers Trust Co., 182 Misc. 184, affd. 267 App. Div. 992; Tel-Hotel Corp. v. Lexnott Corp., 205 Misc. 576). In this instance, to the knowledge of appellant at the time when it acquired this apartment house and took possession of the air-conditioning equipment leased from respondent, the rental for the balance of the term of the lease had already become due and payable. Consequently, by insisting upon retention of possession of this leased equipment, appellant became in law an assignee of the lease and thereby bound to payment of the rent accrued for the balance of the term. There was no illegality in the acceleration clause whereby the rent for the balance of the term became due prior to appellant's entry into possession (Belnord Realty Co. v. Levison, 204 App. Div. 415).
The order appealed from should be affirmed, with costs.