Court Opinion

ID: 6123147
Source: CourtListenerOpinion
Date Created: 2022-02-04 20:11:00.111296+00
Date Added: 2024-06-11T08:24:18.083718
License: Public Domain

Smith, J.:
By tbe terms of tbe parol contract between tbe plaintiff and tbe defendant’s intestate, as found by tbe referee, tbe latter party agreed, in consideration of tbe sum of $821.22 to bim paid, to prevent a foreclosure sale of tbe premises of wbicb tbe plaintiff was tbe lessee, and to procure tbe foreclosure proceeding, then pending, on two of tbe four mortgages wbicb covered tbe premises to be discontinued, and to purchase all of said four mortgages and bold tbem until tbe expiration of tbe plaintiff’s lease, so that tbe plaintiff could occupy tbe premises and bave tbe benefit of tbe same during tbe full unexpired term of tbe lease. Tbe plaintiff paid tbe consideration and tbe agreement was partly executed by tbe intestate. But be neglected to purchase all of said four mortgages and bold tbem. Foreclosure proceedings were commenced on two of tbem, and prosecuted to a notice of sale; during the plaintiff’s term a sale being about to take place, she sold her lease for $625, there being about two years and three months of tbe term unexpired, for all but one year of wbicb she bad paid rent in advance at the rate of $500 a year. Tbe referee found that tbe use of the premises was worth $500 a year more than tbe amount of rent agreed to be paid. Tbe plaintiff claimed, in her statement of claim, $800 on account of tbe excess of tbe value of tbe lease over tbe rent, which sum, with interest on it from tbe date of tbe expiration of her term, and some minor claims, wbicb were not disputed, tbe referee allowed to tbe plaintiff.
*565It is contended by tbe appellant’s counsel • that tbe substance of Harter’s agreement was merely that the plaintiff should have quiet enjoyment, and that until ousted, there was no breach. The agreement was more than that. It was to do certain specific acts, to wit, to purchase the outstanding mortgages, and hold them until the expiration of the plaintiff’s term. On the failure of the intestate to do either of those things, his agreement was broken. The difference between mere covenants of quiet enjoyment and covenants to do some specific acts, the object of which is to secure the possession of the covenantee, is recognized by numerous decisions. In the former class there is no breach till actual eviction. (Waldron v. McCarty, 3 Johns., 472; Kortz v. Carpenter, 5 id., 121; Sedgwick v. Hollenback, 7 id., 376; Kemball v. Van Slyke , 8 id., 487; Kerr v. Shaw, 13 id., 236.) In the latter class failure to do the specific thing stipulated for, gives a right of action, even though the possession be not disturbed. (Juliand v. Burgott, 11 Johns., 477; Thomas v. Allen, 1 Hill, 145; Gilbert v. Wiman, 1 N. Y., 550; Rector, etc., of Trinity Church v. Higgins, 48 id, 532.) The present case has been before this court on a former appeal, and on that occasion it was held, in effect, that the agreement of Harter was broken by his failure to purchase all four of the mortgages, so that the plaintiff had a perfect cause of action, and a judgment of nonsuit which had been theretofore ordered was set aside and a new trial ordered. (MS. op. of Gilbert, J.) This brings us to the question, what is the proper measure of recovery ? Nominal damages, or the value of the unexpired portion of the term ? I think the latter. The term of the lease was subject to the outstanding mortgages, and their amount largely exceeds its value. A foreclosure and sale under them would have deprived the lessee of her entire interest. To secure to her that interest was the purpose of the arrangement. The object* was not to indemnify her in case of an eviction, but to prevent the possibility of an eviction, and to make her term worth to her what it would have been worth if the mortgages had not been in existence. The extent of the probable loss of value by reason of the existence of the incumbrances is the measure of damages, even though the lessee paid nothing on account of the incumbrances, and was not disturbed in her possession. These views are sustained by authority. In Port *566v. Jackson (11 Johns., 239), tbe plaintiff, wbo was tbe assignee of a lease for a term of years, bad assigned tbe same to tbe defendant, and tbe latter bad covenanted to perform all tbe covenants, etc., to be performed by the plaintiff, among which was a covenant, to pay tbe rent as it should accrue upon tbe lease. Tbe action was covenant to recover tbe amount of rent alleged to be due to B., tbe plaintiff’s assignee, for about twenty-four years. Defendant pleaded that before any rent became due, be assigned tbe term to GL, wbo entered and was accepted by B. as bis tenant. Held, on demurrer, that tbe plea was bad; that tbe defendant’s covenant was express to pay tbe rent, etc., for which tbe plaintiff remained liable on bis covenant to B. by privity of contract, notwithstanding tbe assignment by tbe defendant to Q-. and tbe acceptance of him by B. as bis tenant; that tbe defendant’s covenant was broken by tbe non-payment of tbe rent, and tbe plaintiff was entitled to recover tbe whole rent in arrear, for which be was bable on bis covenant with B., though be bad paid nothing, and bad not been damnified. In Gilbert v. Wiman (supra), it was said by Pratt, J., in tbe Supreme Court, after stating tbe rule as to strict contracts of indemnity against damages: “ But in personal contracts, where tbe instrument deviates tbe least from a simple contract to indemnify against damages, even when indemnity is tbe sole object of tbe contract, and when in consequence of tbe primary habihty of other persons, actual loss may be sustained, tbe decisions of our courts, although by no means uniform, have gradually incbned towards fixing tbe rule to be one of actual compensation for probable loss, so that in contracts of that character it may now be considered as a general rule both in this country and in England.” Although tbe decision of tbe Supreme Court in that case was not concurred in by tbe Court of Appeals, tbe rule above stated was not questioned, tbe latter court bolding that tbe obbgation sued on was one of indemnity merely. In tbe case of The Rector, etc., v. Higgins, above cited, it was held by tbe Commission of Appeals that a covenant in a lease, whereby tbe lessee agrees to bear, pay and discharge all taxes and assessments which sbab be imposed upon tbe demised premises during tbe term, is broken when tbe lessee neglects to pay a tax or assessment duly imposed. It is not simply a contract of indemnity, but by it tbe tax or assessment, as between tbe parties, *567becomes tbe debt of tbe lessee; tbe lessor, therefore, can maintain an action thereon without first paying tbe tax or assessment, and, as damages, be is. entitled to recover tbe amount of such tax or assessment. And tbe general doctrine was asserted tbat parties have tbe right to make a contract contravening tbe rule that actual compensation will only be given for actual loss, and where tbe intent so to do is expressed in apt and suitable language, courts of justice will support it. In tbat case, LeoNAbd, C., cited many other cases (p. 537) which support tbe rule of damages above suggested, to wit, compensation for tbe probable loss against which tbe parties by their agreement intended to provide. Another point deserves consideration. It seems tbat in an action by a lessee against tbe lessor, on a covenant for quiet enjoyment, to recover damages foían eviction, be can recover nothing for a rise in value of tbe use of tbe demised premises. (Kinney v. Watts, 14 Wend., 38; Kelly v. Dutch Church of Schenectady, 2 Hill, 105.) Tbe cases so bolding proceed upon tbe ground tbat tbe lessee stands upon tbe same footing as a purchaser who, in an action for a breach of a covenant for quiet enjoyment, is held to tbe price agreed upon by tbe parties as tbe true value of tbe land. By analogy, tbe rents reserved in a lease, where no other consideration is paid, are regarded as a just equivalent for tbe use of tbe demised premises; but tbat rule has not been very satisfactory to tbe courts of this country. (Mack v. Patchen, 42 N. Y., 167.) Its soundness has been questioned (Sedg. on Dam. [lsted.], 170), and we think it is not to be extended beyond this class of cases, to wit, actions between lessee and lessor, to which it has been applied. In our opinion, tbe correct measure of damages in this case is tbe value of tbe unexpired portion of tbe plaintiff’s term, less the rent reserved. (Mack v. Patchin, supra.) Tbe appellant’s counsel insists tbat tbe referee erred in admitting evidence of tbe worth of tbe use of tbe premises, be contending that tbe true mode of ascertaining tbe damages was to show tbe receipts and expenses. Tbe evidence was properly received.
Tbe judgment and order should be affirmed.
MulliN, P. J., and Talcott, J., concurred.
Judgment and order affirmed.