Michaels v. Fishel

• Decision Date: 14 January 1902
• Citation: 169 N.Y. 381,62 N.E. 425
• Parties: MICHAELS v. FISHEL et al.
• Court: New York Court of Appeals Court of Appeals

169 N.Y. 381

62 N.E. 425

MICHAELS

v.FISHEL et al.

Court of Appeals of New York.

Jan. 14, 1902.

Appeal from supreme court, appellate division, Second department.

Action by Anna Michaels against Aaron A. Fishel and others. From an order of the appellate division (64 N. Y. Supp. 1007) reversing a judgment in favor of defendants and granting a new trial, defendants appeal. Affirmed.

Edward W. S. Johnston, for appellants.

William Bondy, for respondent.

VANN, J.

This is a controversy between landlord and tenant, the plaintiff representing the lessee, and the defendants the lessors. By a written instrument, made in January, 1892, the lessors demised to the lessee certain premises situated upon Broadway, in the city of New York, for a term of seven years, less one day, from May 1, 1892, at the annual rent of $8,500, payable in equal monthly payments in advance on the 1st day of each month. The lease provided that upon any default in the payment of rent, continuing for 10 days, or in any of the covenants entered into by the lessee, it should be lawful for the lessors ‘into and upon the said premises and every part thereof to reenter and remove all persons therefrom, and the same to have again, repossess and enjoy as in their first and former estate.’ By an independent paragraph it was further provided that in the event of such re-entry it should be lawful for the lessors ‘at their option to relet the premises as the agents of the lessee, and to receive the rent therefor, applying the same to the payment of the rent due by these presents, and holding the said lessee, his executors, administrators, and assigns, liable for any deficiency.’ It was further stipulated that nothing in said lease contained should be construed or deemed to be a waiver on the part of the lessors ‘of any right or remedy in law or otherwise which they may be or become entitled to by reason of the failure’ of the lessee ‘to perform any of the covenants herein on his part agreed to be performed.’ There was a covenant by the lessee to pay the rent reserved, as well as on or before the 1st day of August in each year to pay the annual charge imposed for Croton water, with the right on the part of the lessors, if such water charge should not be paid within 30 days after it became due, to pay the same ‘for account of the’ lessee, ‘and collect the same in addition to and as a part of the rent for the month then next ensuing.’ There was a covenant by both parties that the lease was to apply to and bind their respective heirs, executors, administrators, and assigns. After various other covenants by each party, the lease closed with the statement that the lessee had deposited with the lessors a transfer of an insurance policy upon his life ‘as collateral security for the payment of the last two months' rent to accrue under said lease only, and for no more, and for no other purpose,’ and the lessors covenanted that the lessee might substitute therefor ‘the amount of said two months' rent in money,’ which was to be returned to the lessee, with interest, ‘upon the fulfillment of said lease.’ On the 2d of August, 1895, the lessee substituted the sum of $1,416.66 in money in the place of the policy, and received from the lessors a receipt therefor, stating that the policy was reassigned to the lessee, and that said sum was to be held by the lessors ‘in accordance with the terms and provisions of said lease.’ Default having been made in the payment of the rent which became due November 1, 1895, the lessors instituted summary proceedings under section 2231 of the Code of Civil Procedure, which resulted in a final order, duly made by a court of competent jurisdiction, awarding to the lessors ‘the delivery of the premises' in question, ‘by reason of the tenant's nonpayment of said rent.’ The usual warrant was issued on the 20th of November, 1895, whereby the lessee, or the plaintiff, who stood for him, was dispossessed, and possession of the premises was restored to the lessors. The lessors paid the water charges for the years 1895 to 1897, inclusive. They leased the premises for the highest sum they could obtain, to wit, $8,000 a year from December 1, 1895, until July 1, 1896, and for $5,500 a year from May 1, 1897, until May 1, 1899, when the lease, according to its terms, was to end. The rest of the time the premises were vacant. The plaintiff, as assignee of the lessee, sues to recover the sum of $708.33, besides interest, being the amount of said deposit, less the rent for one month due at the date of dispossession. The defendants deny their liability, and plead as a counterclaim a deficiency in the rent covenanted to be paid, amounting to $13,333.30, together with the amount of the water charges paid by them, and interest thereon. At the trial a verdict was directed for the defendants ‘upon the issues,’ but the judgment entered thereon was reversed by the appellate division (64 N. Y. Supp. 1007), and a new trial was granted. The defendants gave the usual stipulation, and came here.

The lessors insist that the covenant of the lessee to pay any deficiency, and their own covenant to return the deposit ‘upon the fulfillment of the lease,’ required the direction of a verdict in their favor. The lessee, or his assignee, claims that the proceedings to dispossess, when consummated by actual dispossession, terminated the lease for all purposes as completely as if it had been surrendered by mutual consent. She founds this claim upon section 2253 of the Code of Civil Procedure, which is as follows: ‘The issuing of a warrant for the removal of a tenant from demised premises, cancels the agreement for the use of the premises, if any, under which the person removed held them; and annuls accordingly the relation of landlord and tenant, except that it does not prevent a landlord from recovering, by action, any sum of money, which was, at the time when the precept was issued, payable by the terms of the agreement, as rent for the premises; or the reasonable value of the use and occupation thereof, to the time when the warrant was issued, for any period of time, with respect to which the agreement does not make any special provision for payment of rent.’ This statute was passed before the lease was executed, and hence becomes, in effect, a part thereof, and should be read in connection therewith. Indeed, a similar statute has been in force since the year 1820, when the first law for the recovery of demised premises by summary proceedings was enacted in this state, although an English statute upon the subject was in force while we were a colony of Great Britain. Laws 1820, c. 194, § 3, amending Rev. Laws 1813, c. 63; 2 Rev. St. 515, § 43; 11 Geo. II. c. 19, § 19. As the effect of the statute is to cancel the ‘agreement for the use of the premises' and to annul ‘the relation of landlord and tenant,’ it terminates the lease, as such, the same as if it had ‘been voluntarily canceled and given up.’ Roe v. Conway, 74 N. Y. 201, 205;Rogers v. Lynds, 14 Wend. 172, 176. It does not, however, terminate independent covenants which are not a part of ‘the agreement for the use of the premises,’ although they are contained in the same instrument, and are designed to furnish security to the lessors against the contingency of dispossession and its effect upon the lease proper, according to the statute. The right to enter into engagements of this character exists at common law, and, since there is no statute to prevent, as was said in an early case, such a contract ‘certainly is not an illegal agreement, nor is there anything unreasonable in the lessee agreeing to completely indemnify his lessor for any injury which may arise to him by the lessee's breach of his own agreement. By the entry for condition broken the estate of the lessee was at an end, and the lessor was in of his former estate. Rent, as such, could, therefore, no longer accrue to the lessor from the lessee. His liability rested only upon his covenant looking to this very event.’ Hall v. Gould, 13 N. Y. 127, 134.

In the case before us the covenant for the payment of any deficiency by the lessee rests wholly upon the fact of re-entry by the lessors, for it is only ‘in such event’ that they were given the right, as agents of the lessee, to relet and hold him for the deficiency. Does this mean only a re-entry in its technical sense as known to the common law, or does it also include the removal of the lessee by summary proceedings? This question, which is not without difficulty, as it had led to wide divergence of views in different courts, is now clearly presented to this court for the first time. Kramer v. Amberg, 53 Hun, 427, 6 N. Y. Supp. 303;Baldwin v. Thibadeau, 28 Abb. N. C. 14,17 N. Y. Supp. 532;Shaw v. McCarthy, 2 Civ. Proc. R. 23;Bixby v. Casino Co., 14 Misc. Rep. 346,35 N. Y. Supp. 677;Lewis v. Stafford, 24 Misc. Rep. 717,53 N. Y. Supp. 801; McAdam, Landl. & Ten. (3d Ed.) 411, 628, 968. Re-entry is the resumption of possession pursuant to a right reserved when the former possession was parted with. It was a remedy given by the feudal law for nonpayment of rent, but so ancient that its origin has never been...