Arlu Associates, Inc. v. Rosner

• Decision Date: 26 October 1961
• Citation: 220 N.Y.S.2d 288,14 A.D.2d 272
• Parties: ARLU ASSOCIATES, INC., Plaintiff-Appellant, v. Leo ROSNER, Defendant-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 288

220 N.Y.S.2d 288

14 A.D.2d 272

ARLU ASSOCIATES, INC., Plaintiff-Appellant, v. Leo ROSNER, Defendant-Respondent.

Supreme Court, Appellate Division, First Department.

Oct. 26, 1961.

George Weisbrod, New York City, of counsel (Weisbrod & Epstein, New York City, attorneys) for plaintiff-appellant.

Philip Robbins, New York City, of counsel (William Auerbach, New York City, on the brief; Robbins & Robbins, New York City, attorneys), for defendant-respondent.

Before BREITEL, J. P., and VALENTE, McNALLY, STEVENS, and STEUER, JJ.

STEVENS, Justice.

This is an appeal from a judgment which dismissed the complaint for insufficiency.

The question to be determined is whether a tenant may bring an action for damages for breach of contract against the landlord for unreasonably withholding consent to an assignment of a lease.

The defendant landlord is the owner of a hotel which it leased to the plaintiff's assignors. The lease in question stated:

'38. Article 10 of this lease with respect to assignment is hereby modified to the extent that tenant shall have no right to assign this lease without the written consent of the landlord first obtained until such time as the alterations recited in Article 5 of this lease are completed to the satisfaction of the landlord but that thereafter should there be an assignment in accordance with Article 10 of this lease, that the landlord agrees not to unreasonably withhold his consent to such an assignment.'

The law in New York is clear that where there is merely a provision against assignment without the landlord's consent, such consent may be refused for any or even no reason. Symonds v. Hurlbut, 208 App.Div. 147, 203 N.Y.S.2d 223, cited in Durand v. Lipman, 165 Misc. 615, 621, 1 N.Y.S.2d 468, 473. But the authorities are in conflict as to whether an action for money damages may be maintained where the lease provides that the landlord will not unreasonably withhold his consent to an assignment, and the complaint alleges that the landlord's consent was unreasonably withheld.

In Mann v. Steinberg, 188 Misc. 652, 64 N.Y.S.2d 68, 69, upon which defendant-respondent relies, the lease involved provided, in part:

'* * * 'Sub- lease-tenant is permitted to sublease for all or part of the unexpired term if consent of landlord obtained. Consent of landlord is not to be unreasonably withheld.''

This provision followed upon an earlier clause in which the tenant covenanted, inter alia, not assign, sublet, make alterations, etc., without the written consent of the landlord. The plaintiff sued to recover damages by reason of the alleged refusal to consent to a subletting of the premises. The court dismissed the complaint, holding that the covenant giving the tenant the right to sublet or assign is a covenant of the tenant, and the statement that the landlord will not unreasonably withhold his consent 'is a qualification of the tenant's covenant and not a covenant of the landlord.' 188 Misc. page 653, 64 N.Y.S.2d page 69. The court cited the earlier cases, Sarner v. Kantor, 123 Misc. 469, 205 N.Y.S. 760 and Butterick Pub. Co. v. Fulton & Elm Leasing Co., Inc., 132 Misc. 366, 229 N.Y.S. 86, in ruling that an action for money damages would not lie.

The cases cited by the court followed the English rule established in Treloar v. Bigge, L.R. 1873-74, 9 Exch. 151 and Sear v. House Property & Investment Society, L.R. 1880-81, 16 Ch.Div. 387. Those cases looked to the agreement as a whole and held that the covenant not to assign or sublet was given by the tenant, and the statement of the landlord not to unreasonably withhold consent to assign was merely a qualification of the tenant's covenant. From this it was concluded that an action for money damages would not lie and tenant's remedy was to disregard the covenant or to seek a declaratory judgment or specific performance in equity.

In Singer Sewing Machine Co. v. Eastway Plaza, Inc., 5 Misc.2d 509, 510, 158 N.Y.S.2d 647, 648, relied upon by plaintiff-appellant, the lease contained a provision 'such consent will not be unreasonably withheld.'...