219 Broadway Corp. v. Alexander's, Inc.

• Decision Date: 22 February 1979
• Citation: 46 N.Y.2d 506,414 N.Y.S.2d 889,387 N.E.2d 1205
• Parties: , 387 N.E.2d 1205 219 BROADWAY CORP., Appellant, v. ALEXANDER'S, INC., Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 889

414 N.Y.S.2d 889

46 N.Y.2d 506, 387 N.E.2d 1205

219 BROADWAY CORP., Appellant, v. ALEXANDER'S, INC., Respondent.

Court of Appeals of New York.

Feb. 22, 1979.

Edwin Ostrow, Stanley Zwillinger and Mark I. Aronson, New York City, for appellant.

Richard M. Goldstein and Ronald H. Alenstein, New York City, for respondent.

OPINION OF THE COURT

JASEN, Judge.

The specific issue raised on this appeal is whether a complaint which alleges a breach of a written lease, yet explicitly concedes that such lease was never delivered, states a cause of action.

Plaintiff, 219 Broadway Corp., alleges that its representatives and those of defendant, Alexander's, Inc., conducted extensive negotiations between August, 1974 and June, 1975 with the expectation that mutually acceptable terms could be reached concerning the leasing of certain premises by defendant, as lessor, to plaintiff, as lessee. Plaintiff planned to utilize this property located on Broadway between 219th Street and 220th Street in New York City, as a parking lot.

As a result of the negotiations, an agreement was reached as to the terms of the lease and an instrument was drafted which provided for plaintiff to lease the subject premises from defendant for a 10-year term at an annual rental rate of $6,000 for the initial five years and $6,600 for the remaining five years. The lease and an accompanying memorandum for recording were duly signed by the plaintiff on June 25, 1975, and thereafter forwarded to the attorneys for the defendant. Plaintiff alleges, upon information and belief, that "subsequent thereto, the defendant executed the said lease and memorandum thereof but refused and still refuses to deliver the said lease to the plaintiff."

In August, 1975, the attorneys for the defendant informed the plaintiff's attorneys that the defendant had leased the premises to a third party. Plaintiff, learning of this turn of events, commenced this action by service of a summons and complaint in which it seeks specific performance of the lease, or, in the alternative, money damages resulting from its breach. Defendant moved to dismiss the complaint on the ground that it failed to state a cause of action. (CPLR 3211, subd. (a), par. 7.) Special Term denied defendant's motion, reasoning that "the signatures of (the) lessor and lessee are sufficient to validate a lease." The Appellate Division unanimously reversed, holding, Inter alia, that absent delivery, a lease is ineffective. An appeal to this court ensued from the order of the Appellate Division. There should be an affirmance.

Initially, we note the procedural posture in which this case comes before us. The sole question presented for an our review is whether the plaintiff's complaint states a cause of action. As such, we accept, as we must, each and every allegation forwarded by the plaintiff without expressing any opinion as to the plaintiff's ability ultimately to establish the truth of these averments before the trier of the facts. (See, e. g., Becker v. Schwartz, 46 N.Y.2d 401, 408, 413 N.Y.S.2d 895, 898, 386 N.E.2d 807, 810; Cohn v. Lionel Corp., 21 N.Y.2d 559, 562, 289 N.Y.S.2d 404, 407, 236 N.E.2d 634, 636; Kober v. Kober, 16 N.Y.2d 191, 193, 264 N.Y.S.2d 364, 365, 211 N.E.2d 817, 818.) If we find that the plaintiff is entitled to a recovery upon any reasonable view of the stated facts, our judicial inquiry is complete and we must declare the plaintiff's complaint to be legally sufficient. (See, e. g., Dulberg v. Mock, 1 N.Y.2d 54, 56, 150 N.Y.S.2d 180, 181, 133 N.E.2d 695; Condon v. Associated Hosp. Serv. of N. Y., 287 N.Y. 411, 414, 40 N.E.2d 230, 231.)

In addressing the issue presented, we take cognizance of the hybrid nature of a lease. Only recently we have noted that "a lease, especially a modern lease, is generally more than a simple conveyance of an interest in land for a fixed period of time. Typically it is also a contract which requires the parties, particularly the tenant, to fulfill certain obligations while the lease is in effect." (Geraci v. Jenrette, 41 N.Y.2d 660, 665, 394 N.Y.S.2d 853, 856, 363 N.E.2d 559, 563.) Thus, it can be said, and we would be remiss not to recognize, that a lease achieves two ends, to wit: the conveyance of an estate in real property from lessor to lessee, and the delineation of the parties' rights and obligations pursuant thereto.

Plaintiff, seizing upon this judicial acknowledgment of the dual function of a lease, would argue that the validity of the instrument, as a conveyance of an estate in land, should be governed by what are said to be contract principles. Since it is alleged in plaintiff's complaint that the lease and the accompanying memorandum for recording were duly "executed" by both the plaintiff and the defendant, plaintiff contends that it has adequately demonstrated, at the pleading stage, its right to demand specific performance, or, in the alternative, to recover money damages. Specifically, plaintiff cites compliance with section 5-703 of the General Obligations Law to bolster its position. ^* Inasmuch as that provision imposes no requirement that a lease be delivered to take effect, plaintiff asserts that the lease, and all rights and obligations of the parties thereunder, became fully binding once the instrument was duly signed by the defendant. With this contention, we cannot agree.

By its very terms, section 5-703 of the General Obligations Law speaks only to the requirement that conveyances and contracts concerning real property be memorialized in writing. Nowhere does the statute provide, or its language even remotely suggest, that its provisions were intended to supplant the traditional prerequisites for the conveyance of an interest in real property. In the absence of such legislative directive, the issue posed on this appeal, namely whether a lease must be delivered to take effect, must be resolved by application of time-weathered principles of real property law. (Cf. Kahn v. Kahn, 43 N.Y.2d 203, 209, 401 N.Y.S.2d 47, 50, 371 N.E.2d 809, 812.)

Plaintiff's reliance upon our holding in Geraci v. Jenrette (41 N.Y.2d 660, 394 N.Y.S.2d 853, 363 N.E.2d 559, Supra ) to support its contention that a lease can be enforced against the party sought to be charged once facts sufficient to demonstrate compliance with section 5-703 of the General Obligations Law are alleged is misplaced. Our holding in Geraci was limited to a determination of whether a lease is, or is not, a contract within the Statute of Frauds (General Obligations Law, § 5-703, subd. 2). In view of our disposition that it was, it became unnecessary to consider the further issue of whether parties who have signed a lease could be bound by its terms, absent a showing of delivery.

While, as previously noted, a lease is often chameleonic in both character and function, its fundamental purpose remains to serve as a vehicle for the conveyance of an interest in real property. Until this end is achieved, any rights or obligations of the parties which may be embodied in the lease remain dormant. Thus, the threshold inquiry in this case becomes whether, under the facts alleged, the lease served to convey an estate in real property from the defendant to the plaintiff.

A lease, as in the case of conveyances of an interest in land generally, requires the fulfillment by the parties of certain prerequisites to take effect. It is the well-established rule in this State that delivery is one such requirement, the absence of which, without more, renders the lease ineffective. (E. g., Whitford v. Laidler, 94 N.Y. 145, 151-152; Witthaus v. Starin, 12 Daly 226 228; P & R Realty Corp. v. Hagel, 191 Misc. 732, 734, 79 N.Y.S.2d 536, 538; 425 E. 86th St. Corp. v. Worms, 145 Misc. 598, 599, 260 N.Y.S. 555, 556; 1 Rasch, New York Landlord and Tenant (2d ed), § 18; 33 N.Y.Jur., Landlord and Tenant, § 25; see, e. g., Darob Holding Co. v. House of Pile Fabrics, 62 Misc.2d 899, 900, 310 N.Y.S.2d 418, 419; 59 Madison Ave. Corp. v. Bauer, 15 Misc.2d 780, 781, 180 N.Y.S.2d 1013, 1014.) The requirement that a lease be delivered to be effective as a conveyance of an interest in...