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In re Coatsworth

37 A.D. 295 Court N.Y. App. Div. English

Delivered by Ward, J.:

Contents

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In the Matter of the Application of Tamar M. Coatsworth, Harriet M. Jackman and Albert T. Coatsworth, Landlords, for the Removal of Louis Schoellkopf and Others, Tenants and Under Tenants, from Premises. Louis Schoellkopf and Alfeed Schoellkopf, Tenants, Appellants; Tamar M. Coatsworth and Others, Landlords, Respondents.

Headnote

Landlord and tenant — renewal of a lease if written notice by the lessors that they would pay for improvements by the lessee be not given — what notice is insufficient — a covenant to pay for improvements which binds heii's and assigns of the lessors, though not named, therein — their cost an equitable charge accompanied with right of possession.
A lease, the term of which began the 1st day of April, 1848, for a term of fourteen years, provided that if the lessors did not give the lessee, his executors, administrators or assigns, at least six months’ notice in writing, before the 1st day of April, 1882, of their election to take possession of the said demised premises, and to pay for certain buildings, vaults and sidewalks (which the lessee agreed to erect) at an appraised value, the lease should be deemed to be renewed for a term of five years, and “ that so often as they (the lessors) shall fail to give said six months’ notice before the termination of such renewed term, they will renew the said demise and lease, and such failure shall be deemed a renewal thereof for five years from the termination thereof, on the same terms and conditions as the said first renewal and continuance.”
Held, that a notice given by the successors in interest of the original lessors six months before the expiration of the renewal term, to the effect that they
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“hereby elect to take possession of the said demised premises, pursuant to the provisions of said lease on the 1st day of April, 1897 (the expiration of the renewal period), and hereby notify you that said lease shall terminate on that day,” was not sufficient to terminate the tenancy;
That a statement that the lessors would take possession “ pursuant to the provisions of said lease,” was not equivalent to the statement required by the lease to be contained in the notice, i. e., that the lessors would pay for the buildings, vaults and sidewalks;
That the .covenant of the original lessors to pay for the buildings, vaults and sidewalks erected by the original lessee upon the demised premises, might be enforced, by persons claiming under the original lessee through various conveyances, transfers and assignments, who had been recognized as tenants and occupants of the premises under the lease, by the lessors and their successors in interest, against an heir at law of one of the lessors, and the devisees of a devisee under the will of another of the original lessors — as, although some of the covenants contained in the lease on the part of both the lessors and the lessee omitted the words “heirs or assigns,” these covenants were inseparably connected with other covenants where the heirs or assigns were bound by name, and the whole scheme of the lease contemplated that all of its provisions should embrace them.
Semble, that although the covenant to pay for the buildings, vaults and sidewalks might not technically run with the land, yet in equity it was a charge upon the leased property, which could be enforced by the successors in interest of the lessee against the successors in interest of the lessors, who had notice of the contents of the lease, both actual'and constructive, and who had received benefits under the lease.
Semble, that the successors in interest of the lessee had an equitable right to retain possession of the premises until they had been paid the value of the buildings.
Appeal by Louis Schoellkopf and Alfred Schoellkopf, tenants, from a final order of the county judge of Erie county, entered in the office of the clerk of the county of Erie on the 9th day of March, 1898, directing that a warrant issue to remove the said tenants and their under tenants and all persons claiming under them from the demised premises, excluding from the decision, however, the validity of the claims of the said Louis Schoellkopf and Alfred Schoellkopf to compensation for the value of the buildings, vaults and sidewalks on said premises, and without prejudice to their rights to institute such actions at law as they may be advised to test the validity of the said claims.
On the 30th day of December, 1897, the petitioners, the Coatsworths and Jackman, presented their petition to the county judge of Erie county instituting summary proceedings under article 1 of title 2
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of chapter 17 of the Code of Civil Procedure to recover possession of certain premises in the city of Buffalo having a frontage of forty-eight feet on Main street, sixty-two feet on Washington street and two hundred and eighty-eight feet on Quay street in that city, the petition alleging that the petitioners were the landlords of the Schoellkopfs and their under tenants occupying the premises, and that they (the tenants) were holding over and continuing in possession of the said premises after the expiration of their term.
The tenants answered in the proceeding denying the petition and alleging that they held and occupied the premises by virtue of a lease executed between Caleb Coatsworth and John Coatsworth, the persons under whom the petitioners claimed as heirs at law and devisees, and’ Thomas J. Dudley, under whom the tenants claimed and asserted the right of possession in the premises.
Such proceedings were had before the county judge that he issued a warrant dispossessing the tenants and placing the petitioners in possession of the premises.
From the final order made in the proceeding the said Louis Schoellkopf and Alfred Schoellkopf, tenants, on the 5th day of April, 1898, appealed to this court.
In the lease referred to, the Coatsworths, Caleb and John, with their wives, constituted the parties of the first part and Thomas J. Dudley the party of the second part, and the lease provided :
“ That the said party of the first part, for and in consideration of the covenants and agreements hereinafter contained, oh the part of the said party of the second part, and also in consideration of the sum of one dollar to them in hand paid, * * * have demised, let and leased, and by these presents do demise, let and lease, unto the said party of the second part and to his executors, administrators and assigns, for and during the term hereinafter mentioned (the premises, describing them), and to have and to hold the portion so excepted to the said party of the second part, his executors, administrators and assigns, from the first day of April, in the year one thousand eight hundred and forty-eight, for and during the full end and term of fourteen years thence next ensuing, fully to be completed and ended.”
The rent was stipulated at increasing amounts per year until it
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reached the annual sum of $700, payable on the first of October and April in each year; and if default on the part of the second party should occur in the payment of the rent for thirty days, “ then and from thenceforth it shall and may be lawful for the said party of the first part, their heirs, executors, administrators or assigns, into or on the said demised premises or any part thereof in the name of the whole to enter, and the same premises to have again, repossess and enjoy as in their first and former estate or estates, and the said party of the second part, his executors, administrators or assigns * * * from thence utterly to expel, remove and put out, anything in these presents contained to the contrary thereof in any wise notwithstanding.”
The party of the second part covenanted to pay the rent as provided in the lease and all taxes and assessments that might be imposed upon the premises, and the lease further provided:
“ And the said party of the second part further covenants and agrees to and with the said party of the first part that he will within three years from the first day of April, 1847, at his own proper cost and expense, erect good substantial brick buildings, suitable for commercial and business purposes on all of said demised premises covering the premises hereby demised, or covering them as nearly as is practical for business purposes with such buildings as aforesaid.
“ And the party of the first part covenant and agree to and with the party of the second part, his executors, administrators and assigns, that' at the expiration of the term above created, unless they give the notice hereinafter provided for, for the purpose of renewing and continuing this lease (upon the said party of the second part having kept and performed all these covenants and agreements herein contained on his part), they will pay the said party of the second part, his executors, administrators or assigns, the value of the said buildings that may then be standing upon said demised premises, with the vaults and sidewalks that shall have been constructed on said premises as the said value thereof shall then be. Such value to be ascertained in the way hereinafter provided.”
Provision is then made to ascertain the value of the buildings, etc., by appraisal by three disinterested men.
“ And the said parties of the first part further covenant and agree to and with the party of the second part, his executors, adminis
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trators and assigns, that in case tiiey do not give the party of the second part, his executors, administrators or assigns, at least six months notice in writing before the first day of April, 1862, of their election to take possession of the said demised premises at the expiration of this lease and to pay for said buildings, vaults and sidewalks at such appraised value, that then and in that event, they will renew and continue this present demise and lease, and such omission to give said notióe shall be deemed and taken to be a renewal and continuance of this demise and lease for five years from the said first day of April, 1862, upon the same terms and conditions hereinbefore expressed, except that the rent for the said renewed and continued term shall be seven hundred dollars per annum, payable in the same way as the last five years rents above provided for.
“ And they also covenant and agree as aforesaid that so often as they shall fail to give said six months’ notice before the termination of such renewed term they will renew the said demise and lease, cmd such failure shall be deemed a renewal thereof for five years from the termination thereof on the same terms and conditions as the said f/rst renewal aud continuance.
“ And the parity of the second part covenants with the party of the first part that in case of the renewal and continuance of this lease and demise as aforesaid, he will accept and continue the same on the terms aforesaid, and will pay the said parties of the first part, their executors, administrators or assigns, the rents hereinbefore mentioned on such continuance and renewal of seven hundred dollars per annum for each year of such renewal aud continuance and pay all taxes and assessments assessed as aforesaid during such renewal and continuance so long as and until such renewals and continuance shall end. * * *
“ And the said party of the first part hereby covenants with the party of the second part, his executors, administrators and assigns, that the said party of the second part, his executors, administrators and assigns paying the rent and performing all and singular the covenants and agreements in these presents contained on his part to be performed and keyit, shall and may lawfully, peaceably and quietly have, hold, enjoy and occupy the said demised premises with the buildings thereon to be erected for and during the said term aforesaid, hereinbefore granted without any lawful let, suit, trouble,
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eviction, molestation, expulsion or interruption of or by them, the -said party of the first part, their heirs or assigns, or by any other jierson whomsoever lawfully claiming or to claim by, from or under them or either of them, or by or with any of their consent, privity or procurement.”
The lease was recorded in the Erie county clerk’s office April 20, 1847.
As provided in the lease, the lessee, Thomas J. Dudley, constructed upon the leased ¡premises substantial brick buildings, several stories high, as near as practical covering the land demised, at large expense, and the value of such buildings at the time of the eviction under the warrant of the county judge was at least $25,000.
The lessee and his assigns and successors in interest paid promptly the stipulated rent and-the taxes assessed upon the premises, and performed all the conditions by the lessee to be performed as provided in the lease up to the time of the commencement of the summary proceedings, except the rent due October 1, 1897, which was duly tendered by appellants. And the lessors and their heirs and -devisees received-the stipulated rent, except the rent due October 1, 1897, which was refused, and have never served the notice required by the lease, but have treated the tenancy as renewed every five years under tie provisions of the lease until on the 6th of August, 1896, the petitioners served upon the Schoellkopfs a notice in writing addressed to them as follows :
“Sirs.— You will take notice that we, ás owners of premises bounded by Main street, Quay street, Washington street and the Hamburg canal and more particularly described in a certain lease bearing date April 1st, 1847, executed by Caleb Ooatsworth and Jane ■F., his wife, John Ooatsworth and Jane Ooatsworth of the city of Buffalo, H. Y., of the first part, and Thomas J. Dudley of the •same place of residence, of the second part, and recorded in the Erie ■county clerk’s office in liber 106 of deeds, at page 356, April 20th, 1849, hereby elect to take possession of the said demised premises pursuant to .the provisions of said lease on the first day of April, 1897, and hereby notify you that said lease shall terminate on that day.”
The last renewal of five years terminated on the 1st day of April, 1897, and a new term of five years commenced at that time as
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claimed by the Schoellkopfs (the appellants), because the notice was insufficient to terminate the tenancy, and the tenancy could not be terminated without payment to them for the buildings constructed on the premises.
The counsel for the petitioners claimed before the county judge that the petitioners were entitled to the jiossession of the property,, including the buildings and improvements, without making any compensation for the buildings, and none has been made or offered, and such -was his position upon the argument of this appeal.
The appellants went into possession of the leased premises in the spring of 1892, having obtained all the rights and privileges of the original lessee in the lease through various conveyances, transfers and assignments, and the several persons through whom such interest passed to the appellants, and the appellants paid rent to the original lessors or to their heirs and devisees (the petitioners) and were recognized by them as tenants and occupants of the premises under the lease.
John L. Romer, for the appellants.
John Cunneen, for the respondents.

The final order of the county judge of Erie county in the summary proceedings directed that a warrant issue to remove the appellants and their under tenants from the leased premises, and that the petitioners be put in full possession thereof, and awarded costs to the petitioners, “ excluding from decision, however, the validity of the claims of the said Louis Schoellkopf and Alfred Schoellkopf to compensation for the value of the buildings, vaults and sidewalks on said premises, and without prejudice to their rights to institute such actions at law as they may be advised to test the validity of the said claims.”

The county judge, therefore, assumed to dispose of important rights of the appellants under the lease in this summary manner, leaving the appellants to their legal remedies if they possessed any after their eviction from the premises.

Unless the notice to surrender possession was sufficient to termi

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nate the tenancy, a new tenancy of five years commenced on the 1st of April, 1897. The appellants were lawfully in possession of the premises, and the order appealed from was erroneous.

The lease prescribes what the notice shall contain. It shall state the election of the lessors to take possession of the demised premises at the expiration of the lease and “ to pay for said buildings, vaults and sidewalks at such appraised value. * * * And such omission to give said notice shall be deemed and taken to be a renewal and continuance of this demise and lease for five years from the said first day of April, 1862, upon the same terms and conditions hereinbefore expressed except that the rent for said renewed and continued term shall be seven hundred dollars per annum payable in the same way as the last five years rents above provided for. * * * That so often as they (the lessors) shall fail to give said six months’ notice before the termination of such renewed term, they will renew the said demise and lease, and such failure shall be deemed a renewal thereof for five years from the termination thereof on the same terms and conditions as the said first renewal and continuance.”

Recurring to the notice that was in fact given, it will be seen that it fails to comply with the requisitions of the lease. It is simply an election to take possession of the demised premises, in effect, a notice to quit. It is true that the expression is used that the petitioners will take possession pursuant to the provisions of the lease, and it is claimed by the respondents’ counsel that, if they are responsible for the value of the buildings, the notice means that they will pay for them under the provisions of the lease. This statement is not equivalent to the statement required by the lease to be in the notice, that the respondents would pay for the buildings, vaults and sidewalks, and the claim thus made seems inconsistent with the position assumed by the learned counsel for the respondents, before the county judge and upon the argument of this appeal, that the respondents were not liable to pay for the buildings and that such payment was not a condition precedent to the right of the respondents to recover the possession of the premises.

As this notice was clearly insufficient to terminate the tenancy, and as a case was not made before the county judge for dispossessing the appellants, we would be justified in stopping here and reversing the order appealed from; but as the question is in the

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case whether the covenant to pay for the buildings binds the respondents and whether the appellants can enforce the covenant against them, we will give it consideration.

We shall not attempt at any great extent to discuss the cases bearing upon the question as to what covenants run with the land.

It is insisted by the learned counsel for the respondents that, as they were not the original lessors, Albert T. Coatsivorth being the sole heir at law of John Coatsworth and taking as such, and Tamar M. Coatsworth and Harriet H. Jackman taking as devisees under the will of Francés Amelia Coatsworth, who was the daughter and devisee of Caleb Coatsworth, the covenant of the original, lessors to pay for the buildings is not binding upon the respondents, but was simply the personal covenant of the lessors; that the lessee covenanted for himself personally and not for his heirs and assigns that he would erect the building, and that the right of the lessee in the covenants in the lease had not been transmitted through the mesne conveyances and assignments to the appellants, and they, therefore, could not enforce the covenant to pay for the building.

From the record before us, we think it appears that the appellants have all the right to enforce the covenant in the lease which were secured by it to the lessee, Thomas J. Dudley.

The respondents rely upon the Spencer Case (5 Coke, 16), where it is held that where the covenant relates to a thing not m esse, but to be done upon the land demised, the assignee is bound if named, but if not named, he is not bound; and Tallman v. Coffin ( 4 N. Y. 134 ), which seems to sanction this rule.

It is true that in the covenant to pay for the buildings the heirs or. assigns are not named in immediate connection with that covenant.

It is also true that the heirs or assigns are not named in immediate connection with the lessee’s covenant to build; but in construing this lease, and in determining whether the heirs or assigns are bound, we must consider the whole instrument and the intention of the parties as indicated thereby.

In Masury v. Southworth ( 9 Ohio St. 341 ) it was held that a covenant relating to a thing not in esse might run with the land, though the assigns of the covenantor were not expressly named, provided that, by equivalent words or a clear intent shown by the

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whole instrument, it appeared that such was the intention of the ¡parties; and see Mohr v. Parmelee ( 43 N. Y. Super. Ct. 320 ).

Where a covenant is for the benefit of an estate demised it runs with the land, and will extend to the assignee, though he is not named. (Wood Landl. & Ten. 502, § 310, and cases cited in note 7.)

Some of the covenants in the lease on both sides omit the words “ heirs or assigns; ” but these covenants are inseparably connected with other covenants where the “heirs and assigns” are bound by name, and the whole scheme of the lease contemplates that all its provisions embrace them.

A brief reference to these covenants will make this proposition clear.

The lease is under seal, and the premises are leased to the lessee,. “ his executors, administrators and assigns.” If the rent is unpaid for thirty days, the lessors, “ their heirs, executors, administrators or assigns,” may enter the demised premises and again repossess and enjoy them as in their first and former estate or estates, and expel the lessee, “ his executors, administrators or assigns,” from the premises. And, finally, the lessors, “ their heirs or assigns,” covenant with the lessee, his “ executors, administrators or assigns,” that upon the lessee, his “ executors, administrators and assigns ” paying the rent and performing all and singular the agreements on his part to be performed and kept, they shall lawfully, peaceably and quietly have, hold, enjoy and occupy the said demised premises, with the buildings thereon to be erected, for and during the said term.

The right of the lessors, their heirs and assigns, to re-enter upon the non-payment of rent, and the duty of protection to the lessee and his assigns specified in the concluding covenant, seem to make them parties to all the other covenants which affect and directly concérn the estate demised, and establish the privity of the heirs and assigns of both parties to the lease with the covenant as to the buildings.

The covenants as to the construction of the buildings, and as to the compensation for their value, affect the quality, value and mode of enjoyment of the estate. The buildings conferred an immediate, permanent and beneficial effect on the land leased and were indispensable in carrying out the purposes of the demise. The lessors and the lessee had both privity of contract and privity of estate in

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the buildings which were put upon the land and became a part of the real estate.

As is well argued by the learned counsel for the appellant: “ The obligation to pay is imposed upon the same parties who have the right under the lease to terminate it. This obligation and this right are not separated, and hence the obligation to pay runs with the land, together with the right to terminate with which it is inseparably connected.”

The failure to give the notice required by the lease has extended the term of the tenancy for fifty years. The original parties to the lease have long since departed this life, and their heirs, assigns and successors in interest have continued peaceably to carry out the provisions of the lease until the service of the defective notice to which we have referred. These successors in interest have thus admitted that the liabilities and rights under the lease of the original parties devolved upon them, and this is a practical construction on their part in favor of the position here taken that the covenants as to the buildings run with the land, and when the words of a grant are ambiguous the courts will call in aid the acts done under it as a clue to the intention of the parties. (French v. Carhart, 1 N. Y. 102 ; Chicago v. Sheldon, 9 Wall. 50 ; Topliff v. Topliff, 122 U. S. 131 .)

The learned counsel for the respondents cites Cole v. Hughes ( 54 N. Y. 444 ); Hart v. Lyon (90 id. 663); Sebald v. Mulholland (155 id. 455), being party-wall cases in which certain covenants relating to party walls were held to be personal.

A careful examination of these cases fails to disclose their applicability to the one before us, but it is difficult to distinguish some of the conclusions in those cases from the decision of the Court of Appeals in another party-wall case. (Mott v. Oppenheinner, 135 N. Y. 312 .) Judges Martin, however, in Sebald v. Mulholland (supra), attempts to distinguish Mott v. Oppenhekher from the other cases. Judges O’Brien and Bartlett, in Sebald v. Mulholland, did not vote, and Gray, J., who concurred, said: “ I concur with my brother Martin in his opinion, because the contract in this case requires a different construction from that placed upon the contract in the case of Mott v. Oppenheimer. In that case the question was, upon the contract, whether any interest in the land was

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'raised by force of its covenants, and we thought that that was the ' effect of the instrument.”

It is entirely clear that the covenants as to the buildings affected ■ or concerned an interest in the land demised, and hence come within •the exact ruling of Mott v. Oppenheimer.

.[But should we assume that the covenant to pay for the building, in the light of the Spencer case and some of the cases cited, does not technically run with the land so that an action at law could be maintained against the respondents by the appellants to recover damages for its breach, still in equity the covenant becomes a charge upon the leased property which can be enforced by the appellants against the ¡respondents. They having had notice of the covenant and of the ■contents of the lease, both actual and constructive, and received benefits under the lease, equity will not permit the respondents to have the benefits flowing from the lease, and repudiate its obligations. ' A result so unjust cannot be tolerated. (Hodge v. Sloan, 107 N. Y. 244 , and authorities there cited; Trustees v. Lynch, 70 id. 440, and cases cited.)

In the last case Judge Allen says (at p. 450): “ It would be ’■unreasonable and unconscientious to hold the grantees absolved from '•the covenant in equity for the technical reason assigned, that it did not run with the land, so as to give an action at law. A distinguished judge answered a like objection in a similar case by saying, fin substance, that if an action at law could not be maintained that 'was-an additional reason for entertaining jurisdiction in equity and ¡preventing injustice.”

Again (at p. 451), he says: “ The author of the American note •to Spencer’s Case (1 Smith’s Leading Cases [6tli Am. Ed.] 167) recognizes the distinction between the binding obligation at law of ¡covenants not running with the lands and the equitable rights recognized and enforced in equity in such cases. He says, speaking of •such a covenant: ‘ But although the covenant when regarded as a contract fis binding only between the original parties, yet in order to :give-effect to their intention it may be construed by equity as cremating-an .incorporeal hereditament (in the form of an easement) out ■of the unconveyed estate and rendering it appurtenant to the estate conveyed,; and when this is the case, subsequent assignees will have the right and be subject to the obligations which the title or liability to such.an -easement creates.’ ”

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Equity will not permit the appellants to be evicted from the premises and give the respondents possession thereof until they have performed the covenant to pay for the building. The appellants have an equitable lien on the whole premises until such payment is made, as the appellants, in addition to being tenants, have ownership to the extent of the value of the buildings in the premises demised, and they cannot bé deprived of the possession thereof until their rights in the property are adjusted. If the respondents elect to terminate the tenancy, they can only do so by complying with the conditions upon which the tenancy is predicated. And so, whether the possession of the 'premises was legal or equitable in the appellants, the county judge, in summary proceedings, had no power to remove them.

The order appealed from should be. reversed, with costs, and restitution ordered, viz., that the possession of the demised premises should be restored to the appellants.

Order reversed, with costs, and restitution ordered upon an opinion prepared by Ward, J., which was adopted by this court and in which all concurred. ‘

Cases cited