Court Opinion

ID: 5233213
Source: CourtListenerOpinion
Date Created: 2022-01-06 17:02:26.747124+00
Date Added: 2024-06-11T08:27:41.933289
License: Public Domain

Hotchkiss, J. (dissenting):
If the following propositions are not conceded by my brethren, nevertheless I believe them to be sustained by ample authority, (1) that the lease from defendant to plaintiff’s assignor implied a covenant of quiet enjoyment (Boreel v. Lawton, 90 N. Y. 293; Mack v. Patchin, 42 id. 167); and (2) that inasmuch as the lease was not made subject to the mortgage then a lien upon the premises, the failure on defendant’s part to disclose the existence of such mortgage evidenced a degree of bad faith sufficient to entitle the lessee (plaintiff’s assignor) to recover compensatory damages. (Jacobs v. Schulte, 153 App. Div. 693, 694; Mack v. Patchin, supra, 167, 172; Marsh v. Johnston, 125 App. Div. 597; affd., 196 N. Y. 511; Friedland v. Myers, 139 id. 432, 436.)
*637The privilege to the lessor to subordinate the lease to a “new mortgage ” should not be construed as the legal equivalent of a lease subject to an existing mortgage. Against the danger of the former the lessee was protected by the implied covenant of the lessor. Against the latter, should it ever occur, the lessee might find means to protect himself. After breach of the covenant, it does not seem to me to be, as matter of law, a defense for the lessor to say, “had I exercised my privilege to place a mortgage on the premises, you would have suffered the same loss.”
The doctrine of constructive notice because of the record of the mortgage (assuming any kind of notice to be material) is not applicable, because while the Recording Act may be invoked as between adverse claimants to the title or an interest therein, it is not available to defendant as a bar to its bad faith in executing an instrument purporting to convey an interest which it either did not have or had under material and undisclosed limitations. (Jackson v. Burgott, 10 Johns. 157; Jackson v. West, Id. 466; Jackson v. Phillips, 9 Cow. 91; Ackerman v. Hunsicker, 85 N. Y. 13; Mead v. Bunn, 32 id. 275, 278.) Whether in the face of actual notice of the mortgage, a covenant of quiet enjoyment so far as that mortgage was concerned, would or would not be implied, is an issue which the court below refused to try, and upon this record the question is not before us. For this reason we may not consider the effect as notice of the clause giving the landlord the privilege to subordinate the lease to a “new” mortgage. I believe but one other question remains. The lease was under seal and the term was five years. It contained a clause which provided that the tenant should not assign the lease “ without the landlord’s consent in writing.” For a breach of this (and as well for a breach of other covenants) a right of re-entry was reserved to the landlord. After the term began the defendant conveyed the premises to the Llewellyn Realty Company. Thereafter, with the consent of this company, the tenant assigned the lease to one Fagenson, who, after eviction, assigned his claim for damages to plaintiff. The defendant did not consent to the assignment of the lease to Fagenson, and because of this fact it is argued that it is not liable in this action. A covenant of quiet enjoyment is a real covenant, is annexed to the estate and runs with the land. *638(Gerard Titles [5th ed.], 568.) A covenant not to assign with a proviso for re-entry is of like nature, and is in no way personal. (Horsey Estate, Limited, v. Steiger, L. R. [1899] 2 Q. B. 79, 89; cases cited 24 Cyc. 968.)
It follows that when the defendant conveyed the premises, all interest in the lessee’s covenant not to assign passed to its grantee, to whose benefit it thereafter inured. (Mugatt v. Coe, 142 N. Y. 78.) With respect to any subsequent assignment the defendant’s consent was of no consequence whatsoever.
Judgment affirmed, with costs.