Court Opinion

ID: 6830428
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:51:32.397233+00
Date Added: 2024-06-11T16:04:32.717177
License: Public Domain

LEARNED HAND, District Judge
(concurring). I agree that the contract of June 27, 1907, did not change the rights of the parties to the fund, but merely gave control over it to the mortgagees and the lessee so that the fund might be disbursed at their discretion. That must, however, be done with due regard to the rights of all concerned, and- we should look to what those rights were. In the lease of the premises by the Eighth Avenue Company, “the lessor agrees that in ease of loss all insurance moneys payable to or received by it shall be applied to the restoring, rebuilding or otherwise improving the leased property.” This gave the lessee and its successors the right to insist upon the application of any such moneys to that purpose; the lessor was not free to withdraw them during the period of the lease; on the contrary, it was bound to use them on the premises unless the lessee consented to release them. If the lessee did the repairs, it got the right of reimbursement out of the fund pro tanto, having discharged the lessor’s obligation and not being by virtue of its interest under the lease a mere volunteer.
The lien so arising extended, however, only to the lessee’s advances upon the buildings actually damaged, and even then only in so far as the lessee restored these to their former condition. For instance, the lessee got no lien for the expense of changing the building on plot 1 B into a five-story building or of rebuilding that on plot 1 C. It did get a lien upon so much of the fund as was paid by the insurance companies for damage to 1 B because rebuilding was also restoring. But any additional stories it put on this building was a voluntary payment not chargeable to the lessor. • Similarly of plot 1 C. As to plot 1 A, the parties agreed to change its character. The lien there should extend only to so mueh as was put on the plot to restore it to the condition whieh was agreeable to the lessee. The balance should go to the lessor, because the lessee released his right during the term to the use of the original building by accepting a lower one. The lessee’s contention that it may -bring all its payments into hotchpot is unfounded.
The lessor urges that the lessee should not be allowed to assert any rights arising from advances made by the sublessee of plot 1 C. *949This would depend upon whether these were made voluntarily by the sublessee, or whether under agreement with the lessee by which the sublessee could eventually charge them on the lessee’s account. If they were the first, they were in effect advances by the lessee; if the second, the lessee may not claim subrogation to payments which it did not make. The record is not clear about this, and the fact would have had to be ascertained if my views had prevailed.
Therefore, although I agree that the order should be reversed, I think that the lessee was probably entitled to a substantial sum, and that the cause should be sent back to ascertain how much.