Court Opinion

ID: 5192433
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:38:19.601004+00
Date Added: 2024-06-11T08:26:57.106958
License: Public Domain

McLaughlin, J. (dissenting):
I cannot concur in the views expressed in the prevailing opinion. The facts bring the case, as it seems to me, clearly within the principle laid down in Kernochan v. Manhattan Railway Co. (161 N. Y. 339), and, if I am correct in this, then the judgment should be reversed.
On the 1st of May, 1872, the premises in question were leased by the city of New York to Francis J. Leggett for a period of twenty-one years. The lease contained a covenant to the effect that at the expiration of the term the lessee, “ his executors, administrators and assigns,” had the privilege of renewal, upon such terms and conditions as might then be agreed upon. The words of the lease, so far as the same related to renewal, were as follows: That it shall be “ upon such rents and other terms and conditions as shall be agreed upon between the parties, or as shall be determined by two sworn appraisers, one of whom to be chosen by each of the said parties, or as shall be determined by a sworn umpire who shall be chosen by such appraisers in case they cannot agree, unless the said premises, or some part thereof shall, at the expiration of the said term hereby demised, be required for public purposes, in which case the said term shall not be renewed.” On the expiration of the lease a renewal lease for twenty-one years from May 1,1893, was executed to Frances J. Storms, one of the plaintiffs, and she and her husband, the other plaintiff, now hold all of the interest for which the award of damages in this case has been made. In 1875 the city of New York gave its consent to the construction, maintenance and operation of an elevated railroad in front of the premises described in the complaint, and in pursuance of which the elevated railroad, which it is claimed caused the plaintiffs’ damage for which the award has been made in this action, was completed in 1879 and has since been operated. It was in operation when the plaintiffs took the new lease of 1893. The rent was then fixed by agreement between her and the sinking fund commission, the representatives of the city of New York, and, in the absence of evidence to the contrary, it must be assumed that if the construction, maintenance and operation of the defendants’ railroad injured the leasehold interest, that that fact was taken into consideration in fixing the rent; in other words, if the defendants’ road had damaged the property, the rent was fixed at a lower figure *101than it otherwise would have been. I say this must be assumed in the absence of evidence to the contrary, because it is the only natural conclusion which can be drawn from the acts of intelligent persons. Intelligent people do not pay an increased rental of real estate for the purpose of recovering prospective damages in an action to be thereafter brought, and if this should be done, it might then well be seriously questioned whether a court of equity would permit its powers to be exercised for the purpose of permitting an agreement of that kind to bear fruit. The Kernochan case is much like this one. The reason there assigned for an affirmance of the judgment necessarily leads to a reversal here. Judge Gray, during the course of the opinion delivered in that case, said: “ But when, at the expiration of that period, in 1890, it became necessary under the provisions of the lease, to readjust the rent, the situation was that arbitrators were ‘ to determine what would be a reasonable yearly rent for the said piece of ground hereby demised during the next succeeding period of twenty-one years.’ This language would seem, fairly, to import, as the duty of the arbitrators, that they should exercise their judgment as to a reasonable rent to be exacted of the tenants for the new rental period upon which the parties were about entering. Of course, the demised estate under this lease was all that the lessor could grant in the use of the res / which included all incidental easements. But, if its usable value is diminished, from an obviously changed condition of affairs, due to the acts of the authorities, or of those acting by delegation of the authorities, are the arbitrators not to consider it ? Will they not, naturally, be presumed to consider it in viewing the property? They must fairly appraise the value of the land as it stands. All the facts relating to the situation of the pi*operty and the facilities for its enjoyment must, necessarily, be considered in determining its value. (Livingston v. Sage, 95 N. Y. 289.) I think it would be a violent presumption that the arbitrators determined upon the rent to be paid for the premises for the ensuing period of time by valuing their use without the presence of the railroad structure, and upon the supposition that it would be removed during the term. The court has found that the defendant’s railroad is a permanent structure, and that fact is not disputed by the appellant; which only insists that it was not a fact which was admissible, or which may be *102legally presumed to have influenced the determination of the arbitrators in fixing the future rent to be paid by the lessee. * ' * * If, where a lease is made at a time subsequent to the construction of the elevated railroad, the lessor recovers damages because of the presumption that the rent reserved is based upon the reduced value of the property, the same principle should be applicable to a case like this, where during the lease the parties have stipulated that the rent to be paid for stated periods shall be determined by the arbitrators. There is a similar presumption that the appraisal for rental purposes is based upon the reduced value of the property.”
I am of the opinion that the judgment appealed from should be reversed and a new trial ordered, with costs to the appellants to abide the event.
Van Brunt, P. J., concurred.
Judgment modified as directed in opinion, and as modified affirmed, without costs.