57 E. 54 Realty Corp. v. Gay Nineties Realty Corp.

• Decision Date: 29 June 1972
• Citation: 71 Misc.2d 353,335 N.Y.S.2d 872
• Parties: REALTY CORP., Petitioner-Appellant, v. GAY NINETIES REALTY CORP., Tenant-Respondent.
• Court: New York Supreme Court — Appellate Term

Page 872

335 N.Y.S.2d 872

71 Misc.2d 353

57 E. 54 REALTY CORP., Petitioner-Appellant, v. GAY NINETIES REALTY CORP., Tenant-Respondent.

Supreme Court, Appellate Term, First Department.

June 29, 1972.

[71 Misc.2d 354] Mandell & Bodner, New York City (Emanuel Thebner, New York City, of counsel), for petitioner-appellant.

Tenzer, Greenblatt, Fallon & Kaplan, New York City (Stacy L. Wallach and Edward L. Sadowsky, New York City, of counsel), for tenant-respondent.

Before LUPIANO, MARKOWITZ and GOLD, JJ.

OPINION

JACOB MARKOWITZ, Justice.

Tenant's attack on landlord's good faith is fully warranted. Good faith dealing between landlords and tenants is now read into leases (Tai On Luck Corp. v. Cirota, 35 A.D.2d 380, 316 N.Y.S.2d 438, aff'g N.Y.L.J., 5/25/ 70, p. 2, col. 1, app. dsmd. 29 N.Y.2d 747, 868, 326 N.Y.S.2d 400, 328 N.Y.S.2d 173, 276 N.E.2d 234, 278 N.E.2d 343; Howard Stores Corp. v. Robison Rayon Co., Inc., 36 A.D.2d 911, 320 N.Y.S.2d 861, aff'g 64 Misc.2d 913, 315 N.Y.S.2d 720; see also: Douglas Manor House v. Wohlfeld, 66 Misc.2d 265, 322 N.Y.S.2d 135). Landlord's effort to bring tenant's lease to an end by subtle device verges on the unconscionable.

In these circumstances, if tenant is deemed to have been in default, and late in curing it, tenant should be relieved of the default since landlord was not harmed or prejudiced thereby (Sy Jack Realty Co. v. Pergament Syosset, 27 N.Y.2d 449, 452, 318 N.Y.S.2d 720, 721, 267 N.E.2d 462, 463, aff'g 34 A.D.2d 819, 311 N.Y.S.2d 515; Jones v. Gianferante, 305 N.Y. 135, 111 N.E.2d 419). The law abhors forfeiture of leases (220 West 42 Assoc. v. Cohen, 60 Misc.2d 983, 985, 302 N.Y.S.2d 494, 496). Equity has long since granted relief from leasehold forfeitures resulting from nonpayment of rent (3 N.Y.Law Landlord and Tenant, § 1025). First National Stores Inc. v. Yellowstone Shopping Center, Inc., 21 N.Y.2d 630, 290 N.Y.S.2d 721, 237 N.E.2d 868, distinguishable on its facts, does not mandate the contrary.

Moreover, the provision for three days' notice by mail of the termination of the lease, deemed given when mailed, is so lacking in equity and due process as to be ineffective as a predicate for cancellation of the lease (see: 98 Delancey Street Corp. v. Barocas, Sup., 82 N.Y.S.2d 802, 804--805, aff'd 275 App.Div. 651, 86 N.Y.S.2d 659). But even if this not be so, landlord's failure to tie the rent demand to the forfeiture provisions of the lease precludes the use of the three day notice to terminate the lease.

In the field of contracts generally, a breach must be substantial to authorize termination of the contract. Unfortunately, the law, 'as to leases is not a matter of logic In vacuo; it is a matter of history that has not forgotten Lord Coke' (Gardiner v. William S. Butler, 245 U.S. 603, 605, 38 S.Ct. 214, 62 L.Ed. 505). Archaic in its origins, the effect of this background is still felt. The time has come to bring it up to date; to make the rules governing leases consistent with the rules governing contracts in all other fields.

Landlords and tenants do not generally meet on an equal footing. Land and space are limited and in short supply. Tenants, more often than otherwise, must take inequitable lease provisions as offered, or not get much needed space at all. To strictly enforce provisions of leases in such circumstances is to run counter to all modern thinking.

Leases are no longer conveyances of space for a stated period; today they partake of service contracts as much as of rental contracts. They call for mutual obligations; they differ little, if at all, from other agreements. In modern times, rules of law applicable to other agreements should also apply to leases.

Touching bottom, what did landlord actually lose by the delay in the payment of tenant's rent? A given amount of interest. It could have compelled payment of the rent and of the interest by non-payment proceedings. It chose not to. Instead, it chose surreptitiously to reacquire the space by failing to alert the tenant to the consequences of its acts.

Tenant's in paying its rent was not such a material breach of the lease as to authorize landlord to...