Court Opinion

ID: 5833877
Source: CourtListenerOpinion
Date Created: 2022-01-12 22:32:44.845674+00
Date Added: 2024-06-11T08:43:32.324613
License: Public Domain

Lupiano, J. (concurring).
Plaintiff leased a store located at 57-59 East 59th Street, Manhattan, New York, for the period December 1, 1968, through September 20, 1978, from defendant Liberty Travel Service of New York, Inc., who had theretofore leased it from the owner, Tankoos-Y armón Hotels (now defendant Transcontinental Equities, Inc.). With the consent of Liberty Travel Service of New York, Inc., plaintiff sublet the premises to Selectronic Office Equipment, Inc. for the period July 1, 1973 to September 29, 1978, terminating one day before the end of plaintiffs sublease. The sublease between plaintiff and Selectronic Office Equipment, Inc. provides in pertinent part that it is: "1. [S]ubject and subordinate to but upon the same terms, covenants, conditions and rentals *318mentioned and described in a certain lease dated October 22, 1968 between Liberty Travel Service of New York, Inc., as Landlord, and [plaintiff], as Tenant * * * and upon the terms, conditions and provisions hereinafter set forth * * * 8. The Tenant herein agrees not to attorn to the major landlord and/ or owner of the building and if any payment is made directly by the Tenant herein to the said major landlord and/or owner, the same shall be solely as agent for the Landlord herein. 9. * * * [T]he Tenant may further sublease the entire premises but shall obtain landlord’s consent to said subletting prior to entering into any subleasing agreement. Landlord agrees not to unreasonably withhold said consent, provided, however, that in the event that the rental paid by the said subtenant shall be in excess of the rental under the sublease, then Landlord shall be entitled to such excess over and above the rental paid by this Tenant. The consent of the major landlord to such further assignment and/or subletting shall not be deemed as a consent by the Landlord herein.” The lease agreement dated October 22, 1968 between Liberty Travel Service of New York, Inc. as landlord and plaintiff as tenant provides in pertinent part as follows: "11. Tenant * * * covenants that it shall not assign * * * this agreement, nor underlet * * * without the prior written consent of Landlord in each instance”. On March 14, 1975, Selectronic Office Equipment, Inc. assigned its sublease to defendant Ben-Ness Cameras & Electronics Center, Inc. (hereinafter Ben-Ness Cameras). Apparently aware in the spring of 1976 that the owner of the building was seeking to terminate leasehold interests in the premises, plaintiff’s counsel by letter dated March 22, 1976 advised Ben-Ness Cameras that plaintiff would recognize "no surrender which does not take into account [plaintiff’s] interest in the premises.” Nevertheless on May 7, 1976, defendant Ben-Ness Cameras entered into an agreement with the owner of the building. Transcontinental Equities, Inc. In that agreement Ben-Ness Cameras agreed to vacate the premises on or before May 21, 1976. Transcontinental Equities, Inc. agreed to pay Ben-Ness Cameras $12,000 as consideration for surrender1 of the premises, in addition to $2,000 representing security under the sublease. Transcontinental *319Equities, Inc. further agreed to hold Ben-Ness Cameras harmless from any claim by plaintiff arising out of Ben-Ness Cameras’ tenancy, possession and/or surrender of the premises.
On June 21, 1976, plaintiff commenced the instant action to recover damages for breach of the sublease agreement. His subsequent motion for summary judgment against defendant Ben-Ness Cameras in the sum of $12,000 for violation of the sublease agreement between plaintiff and Selectronic Office Equipment, Inc., which was assigned by the latter to Ben-Ness Cameras, was denied by Special Term, albeit Special Term clearly and properly recognized "that plaintiff objected to the 'surrender of lease’ prior to its consummation * * * Ben-Ness clearly has violated, at the least, the lease provision requiring plaintiffs consent to assign the former’s interest in the premises.” Instead, Special Term granted summary judgment to Ben-Ness Cameras on the ground that "the transaction between Ben-Ness and Transcontinental constitutes a merger of the balance of Ben-Ness’ tenancy in the main landlord’s freehold estate * * * Plaintiffs obligations under the paramount lease have thereby expired, as have Ben-Ness’ obligations under the sublease.”
On appeal, we modified the order of Special Term to the extent of denying summary judgment to both parties because the pleadings were not made part of the motion nor were they filed with the County Clerk, without prejudice to renewal of the motion for summary judgment upon proper papers which shall include a copy of the pleadings (64 AD2d 551). Plaintiff subsequently renewed his motion for summary judgment upon papers which include a copy of the pleadings, and defendant Ben-Ness cross-moved for summary judgment dismissing the complaint as to it. Special Term again determined to deny to plaintiff, but to grant to defendant Ben-Ness, summary judgment relief on the grounds that as a matter of law plaintiff has not been damaged and that there was a merger of estates.
"The general rule at law with respect to merger of estates, that when a greater estate and a lesser estate meet in the same person, without the existence of an intermediate estate, the lesser is merged or drowned in the greater, applies to leases” (34 NY Jur, Landlord and Tenant, § 354; emphasis supplied). However, it is clear that on this record plaintiffs interest constituted the existence of an intermediate estate. Defendant Ben-Ness Cameras did not possess the entire period *320of tenancy held by plaintiff and its status was that of a sublessee. There was no assignment of plaintiff’s leasehold interest to Selectronic Office Equipment, Inc. and consequently no assignment of that interest to defendant Ben-Ness Cameras. The reversionary interest (the reservation of time, no matter how small) inhering in plaintiff mandates the conclusion that he held an intermediate estate frustrating application of the merger doctrine relied upon by Special Term. "A covenant against assignment without the written consent of the landlord has been regarded by the courts as a valued right * * * Therefore a landlord * * * can sue the tenant for such damages as he has sustained by reason of the breach of the restriction” (34 NY Jur, Landlord and Tenant, § 221). Plaintiff is, therefore, clearly entitled to recover damages which he has sustained by virtue of Ben-Ness Cameras’ breach of the covenant against assignment without permission of plaintiff. What is at issue is the measure of damages, plaintiff claiming he is entitled to $12,000 and defendant BenNess claiming "plaintiff is trying to get something for nothing” and is, therefore, entitled to no or nominal damages.
At the time the assignment agreement was executed, plaintiff had three possible courses of action for breach of the covenant in question: "(1) An action at law for damages so caused * * * (2) An action in equity to restrain their violation * * * (3) An action to recover possession of the land” (Symonds v Hurlbut, 240 NY 96, 98; see, also, Liebmann’s Sons Brewing Co. v Lauter, 73 App Div 183). Plaintiff chose to sue for damges. "The measure of damages for the breach of a covenant not to assign or sublet is, it seems, generally speaking, the amount of loss to which the landlord is subjected by the assignment * * * Usually, since the original lessee remains, even after assignment, liable on the express stipulations of the lease, an assignment or subletting by him in violation of the covenant will not support a claim for substantial damages” (Tiffany, Landlord and Tenant, § 152, subd j, par [4], pp 942-943).2
Plaintiff’s second cause of action against defendant BenNess Cameras seeks recovery of the $12,000 paid by Transcontinental Equities, Inc. to Ben-Ness. There is no claim pre*321sented for rent due plaintiff from Ben-Ness and the record is devoid of any factual issue regarding rent due. As to the value of one day’s use and occupation of the premises by the assignee Transcontinental, i.e., the interval between the termination of the assignor Ben-Ness’ leasehold interest and the termination of plaintiff’s leasehold interest, such issue appears to be more properly addressed to Transcontinental and not to Ben-Ness. Further, although the sublease between plaintiff as landlord and defendant Ben-Ness as subtenant provides that any excess (profit) inuring to the subtenant Ben-Ness by virtue of the latter’s subleasing at a higher rental than that due under this sublease shall be given over to plaintiff, there is, by analogy, no profit arising out of the $12,000 payment by Transcontinental to Ben-Ness for the assignment. Under the assignment, the remaining term of Ben-Ness to be given over to Transcontinental amounted to approximately 28 months. The monthly rental due plaintiff from Ben-Ness is $775. Prorating the $12,000 payment received by Ben-Ness over the 28-month term remaining, discloses a monthly value of approximately $428.57, which is patently less than the $775 monthly rental. Thus, no profit was received by Ben-Ness over and above the rental specified. In essence, plaintiff has failed to demonstrate that he has sustained any damage.
Accordingly, the order of the Supreme Court, New York County (Gabel, J.), entered January 24, 1979, denying plaintiff’s motion for summary judgment and granting defendant Ben-Ness Cameras & Electronics Center, Inc.’s cross motion for summary judgment dismissing the complaint as to it, should be affirmed.
Markewich, J. (concurring).

. Technically, Ben-Ness did not surrender, but assigned its leasehold interest to Transcontinental Equities, Inc. "A surrender is the restoring and yielding up of an estate for life or for years to one who has the immediate estate in reversion or remainder, whereby the lesser estate is merged in the reversion or remainder” (34 NY Jur, Landlord and Tenant, § 388; emphasis supplied).

. The lessee remains liable on its contractual covenants, such as the covenant to pay rent which may be enforced against it in case its assignee fails to perform this duty to pay the rent.