Thomson-Houston Elec. Co. of New York v. Durant Land Imp. Co.

• Court: New York Court of Appeals Court of Appeals
• Writing for the Court: ANDREWS
• Citation: Thomson-Houston Elec. Co. of New York v. Durant Land Imp. Co., 144 N.Y. 34, 39 N.E. 7 (N.Y. 1894)
• Decision Date: 27 November 1894
• Parties: THOMSON-HOUSTON ELECTRIC CO. OF NEW YORK v. DURANT LAND IMP. CO.

144 N.Y. 34

39 N.E. 7

THOMSON-HOUSTON ELECTRIC CO. OF NEW YORK

v.DURANT LAND IMP. CO.

Court of Appeals of New York.

Nov. 27, 1894.

Appeal from common pleas of New York city and county, general term.

Action by the Thomson-Houston Electric Company of New York against the Durant Land Improvement Company to enjoin defendant from commencing or prosecuting summary proceedings for the eviction of plaintiff from certain premises, and for damages sustained from breach of covenants. From a judgment of the general term of the common pleas of the city and county of New York (23 N. Y. Supp. 901) affirming a judgment entered on the report of a referee, plaintiff appeals. Reversed.

The action was brought by an electric light company, as lessee, to enjoin the defendant, the landlord, from ejecting it from the premises Nos. 421, 431, on Twenty-Fourth and Twenty-Fifth streets in the city of New York, and for damages sustained from a breach of covenants on the part of the lessor. The parties represent the original parties to the lease and to the agreement for a lease, which agreement was dated November 15, 1877. The leased premises consist of a seven-storied brick building, 200 feet long, 70 feet high and 90 feet in width on the two streets mentioned, and which, prior to the making of the agreement for the lease, had been used for a sugar refinery. By the agreement of November 15, 1887, the defendant agreed to lease the premises to the plaintiff for the term of 33 years from May 1, 1888, together with certain machinery therein, at and for the annual rent of $14,500, the lessee to pay in addition certain taxes, and also the cost of insurance beyond a specified rate. It set forth the terms of the contemplated lease, and provided that the lease should be executed and delivered December 15, 1887, which time was extended to January 4, 1888, on which day the lease was executed. It was contemplated that the lessee might desire to enter upon the premises before the commencement of the term to excavate for the foundation of a large engine to be placed thereon for its business of an electric light and power company, and to place the same, and for other purposes, and the agreement provided that for such portion of the premises as the lessee might desire to occupy prior to May 1, 1888, the lessee should pay a rental at the rate of 12 1/2 cents per annum for every square foot of floor space so occupied. In pursuance of this agreement the plaintiff entered upon the cellar and first floor of the premises in December, 1887, and before the commencement of the term, May 1, 1888, it had expended a large sum in preparing the foundations for its engine and machinery, and placing therein a large engine for its business, and in making other necessary changes. The lease contained numerous covenants, both on the part of the lessor and lessee. The lessor, among other things, covenanted to deliver the demised property to the lessee on the first day of the term, ‘in a sound and substantial condition, and in a state of good repair.’ It commenced making repairs, but they were not completed on May 1, 1888, and the lessor remained in possession of some of the uppoer floors of the building up to August 1, 1888, and then left the premises, and since that date the lessor has not interfered with the possession of the lessee. In March, 1888, the lessor applied to the building department of the city of New York, under the statute, for permission to make repairs on the building. This was followed by an inspection of the building by an inspector, a report by him that the building was unsafe, a survey and a report by the surveyors, dated April 19, 1888, that the building was unsafe and dangerous, specifying the repairs required, including the taking down of the east wall, of the building of buttresses to sustain it; the trial of an issue before a jury in the court of common pleas of the city and county of New York, wherein it was found that the building was unsafe and dangerous in its existing condition, and required for its safety that buttresses should be built to support the east wall, as specified in the report of the surveyor, and the jury recommended that the front wall on Twenty-Fourth street be taken down above the first story, excepting the two end piers, as described in the report. The verdict of the jury was rendered May 7, 1888, and a precept in accordance therewith was issued June 13, 1888, requiring the superintendent of buildings to make the repairs specified in the verdict; but for some reason, for which no explanation is given, the precept has never been executed. The various proceedings recited were taken pursuant to title 5, subc. 11, of the consolidation act of 1882, as amended by chapter 566 of the Laws of 1887.

In addition to the general covenant above referred to, the lessor covenanted ‘that all alterations, improvements, rebuilding, and additions of and to the said property which shall be required during the term hereby granted by any present or future law, ordinance, or authority whatsoever, shall be made or procured to be made by the parties of the first part (lessor) at their own proper cost and expense: provided, however, such alterations, improvements, rebuilding, and additions as are hereinabove covenanted to be made by the parties of the first part shall be such as are of a permanent nature, and become a part of the freehold, and shall not be such as are rendered necessary by reason of the uses to which the said property is or shall be put.’ The lessor reserved a right of reentry to make such repairs as it was required to make, and following this reservation is the clause: ‘It being mutually understood and agreed, however, that the parties of the first part, their heirs, executors, administrators, or assigns, shall be responsible for the making of said repairs and rebuilding, and for the making of the same as soon as practicable, only upon said property as it exists at the time of this letting, the rent hereinbefore reserved to be abated and suspended in the cases hereinbefore specified in similar manner and proportions as it is hereinafter agreed such rent shall abate and be suspended in case of damage by fire.’ The provisions defining the obligations of the respective parties in case of damage by fire declare that if damage is so caused as will cause a liability to repair or rebuild to accrue to the lessor, he will, at his own cost and expense, as soon as practicable, put the buildings in a state of repair equal to that in which they were before said damage was done. The provision for such suspension or apportionment of the rent in case of damage by fire is as follows: ‘And during the time the party of the second part, its successors or assigns, are deprived of the use and possession of the premises hereby demised by reason of such damage and rebuilding by the parties of the first part, the rent heretofore reserved, or such part thereof as shall be justly proportionate to the portion or portions of the said demised premises of the use of which the said party of the second part, its successors or assigns, shall be deprived by reason of such damage or rebuilding, or by reason of the possession or control of the said premises by the said parties of the first part, shall be suspended or abated.’ The lessor has never repaired the building to conform to the requirements in the building department proceedings, nor has he done anything to remedy the defects therein defined. Evidence was given on the trial as to the safety of the building at and since these proceedings were taken, and it was shown by the great preponderance of evidence that at least the four upper floors were unsafe, and unfit to be occupied for any business purpose, by reason of the insecurity of the walls of the building. They have never been occupied in fact by the lessee for any purpose.

The lease also contained a covenant by the lessor to put in and build two staircases on the Twenty-Fourth street side of the premises, and one staircase on the Twenty-Fifth street side, and to alter the location of the Otis elevator and the size of the freight elevator ‘at any time after the date of the lease and upon thirty days' notice in writing’ from the lessee. Notice to perform this covenant was given by the lessee to the lessor 30 days prior to May 1, 1888. The lessor took out the existing stairway on the Twenty-Fifth street side of the building in June, 1888, leaving a staircase on the Twenty-Fourth street side as the only means of access to the building, and proceeded no further. This covenant has never been in any respect performed. Subsequent to the entry of the lessee under the lease, disputes arose between the parties, based upon the violation by the defendant of its covenants. The plaintiff neglected and refused to pay the rent, and the defendant commenced summary proceedings in a district court of the city of New York under the statute to dispossess the plaintiff for nonpayment. The plaintiff sought to set up in these proceedings its claim for damages for breach of the covenants by the lessor as a defense, and succeeded in that court, but the judgment was reversed on appeal on the ground that such damages could not be considered in those proceedings. Several proceedings of this character were instituted by the defendant, and more were threatened. Thereupon this action was brought by the plaintiff. The complaint sets forth a breach by the defendant of the covenants herein specially referred to and of others, and demanded damages therefor, and that an injunction issue restranining further proceedings to eject the plaintiff. The defendant, in its answer, denied the breaches alleged, and set up a claim for rent. The referee to whom the action was referred found that the plaintiff was entitled to certain allowances for damages on certain covenants of the lessor, which should be deducted from the rent, taxes, etc. He refused to allow any damages on the...