Morrill Realty Corp. v. Rayon Holding Corp.

• Court: New York Court of Appeals Court of Appeals
• Writing for the Court: KELLOGG
• Citation: Morrill Realty Corp. v. Rayon Holding Corp., 254 N.Y. 268, 172 N.E. 494 (N.Y. 1930)
• Decision Date: 08 July 1930
• Parties: MORRILL REALTY CORPORATION v. RAYON HOLDING CORPORATION.

254 N.Y. 268

172 N.E. 494

MORRILL REALTY CORPORATION

v.RAYON HOLDING CORPORATION.

Court of Appeals of New York.

July 8, 1930.

Action by the Morrill Realty Corporation against the Rayon Holding Corporation, in which the defendant filed a counterclaim for specific performance. From a judgment (229 App. Div. 760, 241 N. Y. S. 918),affirming a judgment (135 Misc. Rep. 845, 240 N. Y. S. 38) of the Trial Term, dismissing the complaint and decreeing specific performance for purchase of real estate counterclaim, plaintiff appeals.

Affirmed.

Appeal from Supreme Court, Appellate Division, First Department.

Morris Hillquit, of New York City, for appellant.

Edwin De T. Bechtel and Leslie D. Dawson, both of New York City, for Murray Hill Ass'n, amicus curiae.

David Vorhaus, Moses H. Grossman, Louis J. Vorhaus, George L. Allin, Philip S. Dean, and Joshua Bernstein, all of New York City, for respondent.

Arthur J. W. Hilly, Corporation Counsel, of New York City (William T. Kennedy, of New York City, of counsel), for City of New York, amicus curiae.

Louis I. Reichner, of New York City, for Thirty-fourth Street Midtown Association et al., amici curiae.

Jeremiah T. Mahoney, Herbert H. Maass, Vincent L. Leibell, and Monroe L. Friedman, all of New York City, for 40th St. & Park Ave., Inc., amicus curiae.

KELLOGG, J.

The plaintiff contracted to buy and the defendant agreed to sell the block frontage on the westerly side of Madison avenue, between East Thirty-Sixth and East Thirty-Seventh streets in New York City, having a width of 197 feet and 6 inches on Madison, 143 feet on Thirty-Seventh street, and 95 feet on Thirty-Sixth street. The contract expressed the understanding of the parties to be that the purchase was made by the plaintiff for the purpose of erecting a business building upon the premises. It contained a covenant by the seller that the premises might be used for business purposes, subject to restrictions provided for retail business districts by an amendment to the zoning resolution adopted by the board of estimate and apportionment on April 18, 1929. The plaintiff refused to accept a conveyance of the premises on three grounds: (1) That the premises were subject to the restrictions of a covenant known as the Murray Hill covenant; (2) that they were subject to the restrictions of a covenant known as the Paine covenant; (3) that the premises might not be used for retail business purposes under the original zoning resolution, and that the redistricting of the premises under the amendment, to constitute a part of a newly created retail district, was illegal. In this action, which the plaintiff brings to recover the down payment made, it urges that the title offered was defective for the three reasons stated when it rejected the tendered conveyance.

1. The Murray Hill covenant was contained in an agreement executed on the 22d of February, 1847, by the owners of several contiguous parcels of land in New York City, and bound the owners and all subsequent grantees not to erect other than dwelling houses of brick or stone, private stables of brick or stone, or churches on premises owned by the parties within an area described. The premises were in part described as ‘divers lots and parcels of ground situate in the 18th Ward of the City of New York, lying on each side of 34, 35, 36 and 37th Streets and on the south side of 38th Street lying between Madison Avenue on the westerly side and Lexington Avenue on the easterly. * * *’ Manifestly a description of lots between Madison and Lexington having a frontage on certain named streets is not inclusive of lots on the same streets to the west of Madison or to the east of Lexington. Equally clear is it that a description of lots on the cross streets is not comprehensive of lots not touching the streets which are situate on the avenues. Hence to the descriptive words quoted there were appended the following: ‘And also on said Madison Avenue, Lexington and Fourth Avenue as the same are particularly laid down on a map in the Office of the Register in and for the City and County of New York, entitled Map of the Murray Hill Estate, made by Joseph F. Bridges, City Surveyor, February 25, 1839.’ It has been held that the added clause was qualified by the words of the precedent clause bounding the premises on the east and west, so that the covenant was tied to those lots only which lay between the east line of Madison and the west line of Lexington. Schoonmaker v. Heckscher, 171 App. Div. 148, 157 N. Y. S. 75; affirmed 218 N. Y. 722, 113 N. E. 1066. We see no reason now to doubt the correctness of that decision. Indeed, independently of the decision, we are presently of the opinion that the Murray Hill covenant imposed no restrictions upon premises situate on the west side of Madison avenue, as are the premises constituting the subject of this action.

In the year 1853 the property now in litigation was owned by John R. Murray. In that year he conveyed lots, constituting a major portion of the premises, to John Paine. The deed contained the following clause: ‘SUBJECT NEVERTHELESS TO THE COVENANTS ANd pRovisions contained in a certain instrument in writing * * * recorded * * * in Liber 485 of Conveyances, page 594, March 2, 1847.’ The instrument referred to was the Murray Hill agreement. In 1855 Murray conveyed to Robert M. Oliphant the lot adjoining the Paine lots on the south. In 1856 Murray conveyed to the trustees of St. Patrick's Cathedral the remaining lot on the corner of Thirty-Sixth street. The last two conveyances contained ‘subject’ clauses similar to that contained in the Paine conveyance. In the defendant's chain of title, whereby its ownership of the entire frontage is linked up with the ownership of these several grantees, there are many deeds containing similar clauses. It is urged that the defendant is thereby estopped from claiming that the Murray Hill covenant does not extend to the lands in suit.

In Bennett v. Bates, 94 N. Y. 354, 370, it was said: ‘The authorities hold where a grantee takes a conveyance of land, subject to the payment of mortgage existing thereon, although he comes under no personal liability to pay the same, is not at liberty to contest the existence or validity of such mortgage.’ In that case the question was whether a grantee might dispute the existence of a debt expressly acknowledged to be owing by a mortgage securing its payment, ‘subject’ to which the grantee took his conveyance. In terms the obligation was admitted by the mortgage; in terms the lien of the mortgage was made to attach to the identical lands accepted by the grantee. The principle stated is expressly based upon the postulate that the grantee takes the lands subject to the payment of a ‘mortgage existing thereon.’ Of the principle enunciated it was said in Purdy v. Coar, 109 N. Y. 448, 453,17 N. E. 352, 353,4 Am. St. Rep. 491: ‘The pith of the doctrine is that the circumstances of the purchase amount to an admission of the validity and lien of the outstanding incumbrance.’ Now, the principle of estoppel merely forbids that a claimed right, admitted to be valid by act or word of the person against whom or whose property it runs, shall by that person be disputed. In other words, an estoppel does not originate a legal right; it merely forbids the denial of a right claimed otherwise to have arisen. If, in the Bennett Case, the mortgage to which the grant was expressed to be made subject had failed to describe the granted property, the assertion of an existing lien, which the grantee might not deny, would not have been made, so that no estoppel would have arisen. In the instance before us, the Murray Hill covenant, by its terms excluded from its operation the premises in litigation. Consequently, if the ‘subject’ clauses, contained in conveyances made subsequently to the agreement operated to bind the granted property to restrictions such as were contiained therein, they could not so have operated through estoppel; they must have been effectual, if at all, as new impositions of like restrictions upon lands not originally bound by the covenant. Self-evidently there was no thought in the mind of any grantor or grantee to impose new restrictions by covenants presently made.

In Korn v. Campbell, 119 App. Div. 401, 404, 104 N. Y. S. 462, 464, the court considered the question whether a conveyance to one Coburn, ‘subject to’ certain restrictions contained in a prior deed, operated to reimpose restrictions which had been extinguished. Scott, J., writing for the court, said: ‘The insertion of this clause in the deed to Coburn did not, however, necessarily amount to the reimposition of the restrictions upon the property, or imply an agreement on Coburn's part that he would observe the covenant.’ The decision was affirmed by this court in 192 N. Y. 490, 85 N. E. 687,37 L. R. A. (N. S.) 1, 127 Am. St. Rep. 925. In Percival v. Williams, 82 Vt. 531, 547, 74 A. 321, 327, there was considered a case where reservations of easements, to which a grant was made ‘subject,’ had been extinguished when the grant was executed. The court said of the parties: ‘They did not intend to give the reservation, subject to which the conveyance was made, any force or meaning beyond that given by the deed containing it, whatever such force or meaning might be (see Wolveridge v. Steward, 1 Cr. & M. 644, 30 E. C. L. 521; Johnson v. Webster, 4 De G. M. & G. 474; 53 Eng. Ch. 371), and the various grantees including the orator were bound by that deed only to the extent of its obligation.’

In Goodhue v. Cameron, 142 App. Div. 470, 481, 127 N. Y. S. 120, 127, the precise question now presented was under consideration. Within the area to various properties in which the Murray Hill covenant was tied, there was a lot, numbered 53, at the southwest corner of Thirty-Fourth street, and Madison avenue, which was not owned by any party to the agreement creating the covenant. It was part of an abandoned highway known as ...