Court Opinion

ID: 5360575
Source: CourtListenerOpinion
Date Created: 2022-01-08 07:22:52.210282+00
Date Added: 2024-06-11T08:29:52.133069
License: Public Domain

Crapser, J. (dissenting).
The defendant appeals from a judgment entered in the Albany county clerk's office in the plaintiff’s favor in the sum of $7,298.89 and from an order granting plaintiff an extra allowance.
On May 19, 1933, the plaintiff and defendant entered into a written lease for the premises at No. 67 North Pearl street in the city of Albany whereby the entire premises were leased by the plaintiff to the defendant for a term of three years beginning September 1, 1933, and provided for two successive renewal options of seven and five years respectively. The defendant took possession' pursuant to the lease and paid the plaintiff a monthly rental of $500 plus one per cent of the gross sales including the sales of its subtenant.
On August 22, 1934, the defendant entered into an agreement with one Jay L. Woolman, subletting a certain space on the main floor together with a portion of the basement for a term of seven years beginning September 1, 1934, at an annual minimum rental beginning at $4,500 and increasing to $6,000.
Pursuant to that agreement Woolman made alterations and improvements in his part of the premises and operated therein a ladies dress shop. The one per cent of gross sales which the defendant thereafter paid to the plaintiff included one per cent of Woolman’s gross sales.
On September 19, 1934, the plaintiff served a written notice both upon the defendant and upon the subtenant, Woolman, which notice read as follows:
*396“ September 19th, 1934.
" To Schaffer Stores Company, Inc.,
120 Erie Boulevard,
Schenectady, New York.
“ Gentlemen:
“ Re: Lease 67 North Pearl Street, Albany, N. Y.
“ Whereas the undersigned has observed that you have sublet a substantial portion approximately 12 feet in width and 81 feet in depth on the main floor of the premises 67 North Pearl Street, Albany, New York, in violation of the terms of the lease entered into between you and the undersigned on the 19th day of May, 1933, you will please take notice that the undersigned hereby elects, pursuant to the terms of said lease, that the relation of landlord and tenant shall wholly cease and determine within ten days after receipt by you of this notice and that the said lease shall become void and of no effect and that the undersigned will re-enter the said premises and remove all persons therefrom unless within said ten days your default in the performance of the covenants of said lease aforesaid, be rectified.
^ "Vnnpci Arc*
“ WILLIAM E. WOOLLARD,
“ Owner.”
On October 24, 1934, the plaintiff instituted an action in the Supreme Court, Albany county, against the defendant and its subtenant, Woolman. In the complaint in that action the plaintiff alleged the service of the aforesaid notice on the defendant, that the lease was thereby terminated: that the defendant and its subtenant be ousted from the premises and the judgment prayed for asked that it be determined that the lease between the plaintiff and the defendant Schaffer Stores Company, Inc., had been effectively canceled and the right of the defendants to occupy the premises had ceased.
The action was tried before Judge Van Kirk as official referee and resulted in a judgment in favor of the plaintiff, which was entered on July 12, 1935. Under that judgment the defendant and subtenant were ordered to vacate the premises and to surrender the keys to the plaintiff and the lease was declared “ forfeited, cancelled, and null" and void and of no effect whatsoever.” The judgment also allowed the plaintiff a recovery of $5,310.39, which was computed on the basis of twenty-five dollars, with interest, for each business day, for the period beginning September 1, 1934, and ending July 12, 1935, pursuant to the twenty-five dollars per day clause contained in the lease, and being in lieu of one per cent of the gross sales. ¿ The judgment further allowed the plaintiff a recovery *397of $750, with interest from September 1, 1934, that amount being the stipulated costs of restoring the premises to the condition in which they were before the alleged structural changes were made by Woolman in that portion sublet to him.
The defendant obtained from Judge Van Kirk on July 10, 1935, the usual thirty-day stay of execution. On August 9, 1935, the defendant Schaffer Stores Company, Inc., appealed from that judgment to this court. No appeal was taken by the codefendant, Woolman.
On August 23, 1935, a written stipulation was entered into between the attorneys for the plaintiff and the defendant reciting that the defendant’s check for $6,400 had been deposited with the plaintiff and that
“ This is done with the understanding that said Woollard will not issue execution pending appeal in regard to the money judgments mentioned in said judgment.
“ The total of the money judgments appealed from amounts to $6,301.18, together with accrued interest from-date of entry.”
On the defendant’s appeal to this court (246 App. Div. 157), this court reversed the judgment against the appellant upon the law and the facts and dismissed the complaint as to the appellant, with costs.
Upon the appeal from the said judgment of the Appellate Division to the Court of Appeals the latter court (272 N. Y. 304-315) held that the plaintiff by accepting rent from the defendant after the service of the notice dated September 19, 1934, must be deemed to have waived his right to forfeit the lease but the defendant having violated its covenant, by which it agreed to make no structural changes without the landlord’s written permission, and the parties having stipulated on the trial that the costs of restoration of the building to its condition prior to Wool-man’s occupancy was $750, the court modified the judgment of the Appellate Division by directing judgment for the plaintiff in the sum of $750 and, as modified, affirmed the judgment.
In the opinion in the Appellate Division it was said: “ Assuming that the notice canceling the lease served on the nineteenth of September actually operated to cancel the lease on September twenty-ninth, then the plaintiff could not recover twenty-five dollars a day after that time as he has been permitted to by the judgment herein appealed from. The lease did not bind the tenant after its termination to pay anything and although the tenant remained in the premises the respondent would only be entitled to recover for the use and occupation because privity of contract would have ceased and privity of estate only would have remained.”
*398The Court of Appeals by affirmance of the judgment must have held that the plaintiff herein could only recover from the defendant for the value of the use and occupation of the premises during the time their occupancy continued.
On October 12, 1935, the defendant vacated and removed from all of that portion of the dertiised premises occupied by it, delivering the keys to the plaintiff with the following written notice:
“ October 12, 1935.
“ Mr. William E. Woollard 91 State Street,
Albany, N. Y.
“ Re: Woollard vs. Schaffer Stores Company, Inc., et ano.
“ Dear Sir:
“ This is to advise you that pursuant to a judgment in the above matter, entered July 12, 1935, we have this day wholly vacated the premises at 67 North Pearl Street, Albany, N. Y., and delivered the keys to you. In vacating the said premises and delivering the keys to you, we do so under protest.
“ SCHAFFER STORES COMPANY, INC.,
“ By Henry Schaffer,

“President.”

The plaintiff wrote two letters refusing to accept the keys, stating that he had made no demand for the premises, which letters were replied to by the defendant as follows:
“ Oct. 16, 1935.
“ William E. Woollard, Esq.,
91 State Street,
Albany, N. Y.
“ Dear Sir:
“ Your two letters of October 14th to the Schaffer Stores Company, Inc., have been referred to us for our attention. By your own written election, the lease of May 19, 1933, was terminated on September 29, 1934. The judgment orders and directs our client to vacate the premises and deliver the keys. This has been done. The keys which you returned are enclosed herewith.
“ Following the expiration of the temporary stay referred to in your letter, there was no further stay of that portion of the judgment directing our client to vacate and surrender the keys.
“ As to the portion of the premises occupied by Woolman, you alone have the power to regain physical possession under your judgment.
“ Very truly yours,
“ SCHAFFER & SEVITS.”
*399All of this transpired before the hearing of the appeal by the Appellate Division and the handing down of its decision which was on January 15, 1936. At the time the appellant moved out on October 12, 1935, the judgment of Judge Van Kirk was still in full force and effect; only the money part of the judgment was stayed by the deposit of the cash with the plaintiff. It was the duty of the appellant to obey the judgment; the fact that the respondent had stated that he did not intend to enforce the judgment until the appeals were finished was at best only a gratuitous statement. The appellant when it vacated acted under the judgment and pursuant to a specified direction. What it did at that time cannot be evaluated or judged by what transpired later, but must be adjudicated on the basis of the situation as it existed at the time of the vacation of the premises.
The judgment on the remittitur of the Court of Appeals was entered on March 8, 1937, and the present action was instituted by the plaintiff on March 9, 1937.
The appellant’s obligation, if any, in respect to the lease in the case at bar must be determined in the light of the conditions existing prior to the reversal by this court of the declaratory judgment. The acts upon which the appellant’s liability depends in this action took place during the period between the sending of the notice of termination, September 19, 1934, and the reversal of the judgment by this court on January 15, 1936; that reversal could not and did not affect the rights or obligations of the parties which had become altered due to a change of possession as the result of or in consequence of the judgment as long as it stood unreversed and binding upon the appellant.
The reversal by this court did not reinstate the relationship of landlord and tenant. The appellant’s obligation to pay the rent, which had been recovered by the judgment herein appealed from, must be measured as if the declaratory judgment had not been reversed. The obligations of the appellant, now under review, accrued while the declaratory judgment was in effect and binding upon the appellant irrespective of whether that judgment was right or wrong when rendered.
In the former appeal this court stated: “ The lease did not bind the tenant after its termination to pay anything and although the tenant remained in the premises the respondent would only be entitled to recover for the use and occupation because privity of contract would have ceased and privity of estate only would have remained.”
The present action is based solely upon the lease and is predicated exclusively upon the continued relationship of landlord and tenant— *400that was the theory upon which the case was tried and decided. The court below overlooked the fact that liability for rent and liability for use and occupation are entirely separate and distinct obligations. Liability for use and occupation is not Lability for rent under a lease. (Peoples Trust Co. v. Schultz N. & S. G. Co., 244 N. Y. 14; Rosenfeld v. Aaron, 248 id. 437; Hermitage Co. v. Levine, Id. 333; Michaels v. Fishel, 169 id. 381; Caesar v. Rubinson, 174 id. 492; Smith v. Frank, 252 App. Div. 834.)
The defendant-appellant having removed from the said premises while the declaratory judgment was in full force and effect cannot any longer be held to the terms of the lease, but whatever rights remained in the plaintiff against him must be for use and occupancy. (Cornwell v. Sanford, 222 N. Y. 248; Wolf-Kahn Realty Corp. v. Sussman, 240 App. Div. 422; International Publications v. Matchabelli, 260 N. Y. 451.)
The difference between lability for use and occupation as distinguished from Labihty for rent is not a mere technical distinction between alternative causes of action, but is substantial and important to the appeHant. (Rainier Company v. Smith, 65 Misc. 560; Martin v. Moulton, 200 N. Y. Supp. 213; Lucina Realty Co., Inc., v. Flachner, 180 id. 732.)
The judgment appealed from should be reversed and the complaint dismissed on the ground that plaintiff’s correct and proper action is to recover for the use and occupation of the premises.
Schenck, J., concurs.
Judgment affirmed, with costs.