Astor v. Lent — 19 N.Y. Super. Ct. 612

Majority

p. 612

William B. Astor, Plaintiff and Appellant, v. George B. Lent, Defendant and Respondent.

Headnote

1. The equitable assignee of a lease, who, as such, enters into possession, and occupies the demised premises, is liable for the rent accruing during such occupancy.

2. Where such equitable assignee, while occupying the demised premises, makes an assignment of aE his property in trust for. the benefit of his creditors, and last said assignee enters under said assignment upon the demised premises and occupies them as assignee until compelled to surrender possession by proceedings instituted to dispossess him, he is liable for the rent becoming due during such possession and occupancy.

(Before Bosworth, Ch. J., and Pierrepont and Moncrief, J. J.)

Heard, May 16th;

decided, June 2d, 1860.

p. 613

Appeal by the plaintiff from a judgment ordered on a trial had November 14, 1859, before Mr. Justice Moncbiee and a jury.

This action was commenced on the 6th day of February, 1858, to recover $1,000, alleged to be due for the rent of the store and premises No. 163 Greenwich street, in New York city, for the quarter ending November 1, 1857.

At the commencement of the term, the lessee, Schenck, entered and continued to occupy the premises as tenant to the plaintiff, paying rent to him, according to the lease, until the 1st day of May, 1855. The business which Schenck carried on in the store was that of selling machinery and steam engines. Shortly prior to May, 1855, he made a sale of the business and the stock of goods in the store to one Abraham L. Ackerman, with whom one Jacob Schenck was jointly interested. The evidence tended to show that Ackerman agreed to take the lease and pay the rent to the plaintiff, and to get from him a consent to the transfer and a release of Schenck from further liability. The lease itself was at the time in the safe, which, by the sale, passed, with everything else in the store, to Ackerman. The price paid by Ackerman to Schenck was a round sum for the stock in trade, the store, the good-will, and the lease. No written assignment of the lease was executed, but it remained in the possession of Ackerman until his subsequent assignment to the defendant, and Ackerman was fully informed as to its terms when he purchased. The evidence also tended to show that it was expressly part of the bargain that Schenck transferred to Ackerman all his right of occupancy of the premises; that, immediately after the purchase, Ackerman took possession of the store and of the property in it, and continued to occupy it, and paid the rent reserved in the lease regularly to the plaintiff, down to and including the rent which fell due on the first day of August, 1857; that he continued in possession of the premises, carrying on the same business which Schenck had done there, until the twenty-first day of October, 1857, when, being insolvent, he made, executed and delivered to the defendant, George B. Lent, a general assignment of all his property, real and personal, for the benefit of his creditors, with preferences. The defendant accepted the assignment, and covenanted to perform the trusts contained in it. The goods, wares and merchandise in the store No. 163 Greenwich street

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are particularly specified in the schedule of property annexed to the assignment, but no specific mention of the lease was made in it. The evidence also tended to show that, on the twenty-second day of October, 1857, the day after the execution of the assignment, the defendant came to Eew York, visited the store, and took possession. Default was made in the payment of the quarter’s rent which fell due on the first day of Eovember, 1857. The defendant, after his entry, continued to occupy the store, and kept in it the machinery assigned to him by Ackerman, and carried on the same business which Ackerman had done, having his own name up, and talcing personal charge of store and property from the twenty-second day of October to the tenth day of the ensuing December, and during that period made no offer or attempt to surrender the lease, or abandon the possession of the premises, or to remove the assigned property therefrom. On the last-named day, by an agreement between the plaintiff and defendant, the lease was canceled, without prejudice to the rights of either party as to the claim in suit, and the possession surrendered by the defendant to the plaintiff, upon the defendant’s paying, pro rata, the proportion of the rent which had become due since the first day of Eovember. So much of the evidence as is material, is stated in the opinion of the Court.

When the plaintiff rested his case, the counsel for the respective parties conceded that there was no disputed fact to be passed upon by the jury.

Whereupon his Honor, the Judge, ruled, that upon the evidence in the case, the defendant is not liable, and directed the jury to find a verdict for the defendant; to which ruling and direction, the plaintiff’s counsel excepted.

Thereupon, the jury rendered a verdict for the defendant. Judgment having been entered, the plaintiff appealed from it to the General Term.

Charles F. Southmayd, for appellant.

I. The defendant, being the assignee of the term and of the exclusive right of occupancy of the premises, entered during the quarter, and being in the actual and beneficial enjoyment thereof from the time of such entry up to and at the end of the quarter, when default was made, is liable for the rent which then accrued.

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1. By the agreement between Schenck and Ackerman, the latter became the equitable owner of the term, and as.such, so long as he remained in possession, he was liable for the rent reserved. He might at any time have compelled Schenck to execute an assignment of the lease to him. (Astor v. L'Amoreux, 4 Sandf. S. C. R., 524.)

2. The defendant took the premises subject to the burdens under which Ackerman had held them, and must pay all rent which accrued after his entry, so long as he continued in possession, notwithstanding that he was merely an assignee for the benefit of his creditors, and not for his own benefit. (Young v. Peyser, 3 Bosw., 308 ; Martin v. Black, 9 Paige, 643; Muir v. Glinsman, Superior Court General Term, Jan., 1856, in MS.; Holsman v. De Grey, 6 Abb. Pr. R., 79.)

II. It has been held (Martin v. Black, 9 Paige 643 ; Bagley v. Freeman, 1 Hilt., 196; Journeay v. Brackley, id., 447,) that an assignee of an insolvent for the benefit of creditors, may, when a lease is included among the assigned property, elect to waive the term, and not to become assignee of the lease, and that if he waives it, and does not enter, he cannot be charged with the covenants. But the principle applied to such a case is not peculiar, since any assignee of a lease has the like election, and does not become liable if he does not accept the assignment.

1. In the cases of general assignees for creditors, where the assignee has not entered, there is very much discussion as to what acts on his part are equivalent to entry as evidence of acceptance ; and also in cases arising under the English Bankrupt law of 49 George III., chapter 121, which expressly gives, the assignees of a bankrupt his election to accept or reject a lease embraced in the assignment. (See cases cited in Journeay v. Brackley, ut supra; 1 Hilt., 447.)

But there is no instance in which a deliberate act of taking possession, on the part of the assignee, has been curtailed, of its established legal effect of subjecting the assignee to payment of rent, so long as he remains in possession. (2 Platt on Leases, ch. 6, p. 433, and cases there cited.)

2. In the present case there was not only a deliberate act of taking possession on the part of the assignee during the quarter, but he continued to occupy the premises, keeping the property

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in them the same as before, and carrying on the business as before, for upwards of fifty days, during which the quarter’s rent accrued, having his own name up, and doing no act in the meantime which indicated an intention to abandon the premises.

3. If, upon such a state of facts, there were any doubt as to the intention of the assignee, and if, in such a case, his intention were in any wise material, the question of intention should have been left to the jury. The judgment appealed from ought to be reversed, and a new trial ordered.

E. R. Bogardus, for respondent.

I. There was no privity of contract or estate between Astor and Ackerman (still less between him and the defendant,) inasmuch as Ackerman never became, or agreed to become, assignee of the lease, or ever held himself out to the plaintiff as such, but refused to take any assignment; and Astor never acceded to the terms. (Quackenboss v. Clarke, 12 Wend., 555 .)

The obligation of an assignee of a lease to the landlord, results only from the privity of estate between them, arising from an assignment of the legal interest; a merely equitable assignee, though in possession, is under no liability to the landlord, for want of privity between them, unless by holding himself out to the landlord as assignee, he has estopped himself from denying it, which Ackerman, and certainly the defendant, has never done. (Moore v. Gregg, 2 Phillips, 717 ; How v. Kennett, 3 Ad. & El., 659.)

II. As under-tenants of Samuel B. Schenck, Ackerman and J. B. Schenck, as partners, were jointly interested in the occupancy, and neither the assignment to the plaintiff by S. B. Schenck, nor that to the defendant by Ackerman, was sufficient to raise any liability of the defendant to the plaintiff.

III. The defendant never accepted the leasehold interest; until the defendant’s right of election to accept or reject the lease was determined by some unequivocal act of acceptance, the leasehold interest did not vest in him at all, and no liability for the rent was incurred by him. (A. D., 1806, Turner v. Richardson, 7 East., 335; 1818, Hill v. Dobie, 8 Taunt., 325; Wheeler v. Bramah, 3 Camp., 340; Lindsay v. Lambert, 12 Moore, 209;

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How v. Kennett, 3 Ad. & Eld., 659; Copeland v. Stephens, 1 Barn. & Ald., 593; Pratt v. Leven, 1 Miles, 358; Journeay v. Brackley, 1 Hilt., 447; Young v. Peyser, 3 Bosw., 308 ; Bokee v. Hamersley, 16 How., 461 , 466.)

1. The case of Muir v. Glinsman, unreported, cannot be supposed to have been intended to overturn the long settled law as above stated, and is not in fact in conflict with them, or with the ruling of the Justice in this case.

IV. There being no dispute as to the defendant’s intent not to accept the lease, and none as to the defendant’s acts, the Justice rightly held that the defendant’s acts did not constitute an acceptance in law, contrary to his intent, and properly, therefore, directed a verdict in his favor.

The sole question is, whether defendant’s occupation was irreconcilable in law with his express disclaimer of taking the lease. The Justice properly held not; the occupation was sufficiently explained and qualified, and the plaintiff has been neither injured nor misled. ( Wheeler v. Bramah, 3 Camp., 340; Lindsay v. Lambert, 12 Moore, 209; How v. Kennett, 3 Ad. & Eld., 659; Journeay v. Brackley, 1 Hilton, 447; Pratt v. Leven, 1 Miles, 358.) The judgment should be affirmed.

The equitable assignee of a lease, who, as such, has entered into possession and occupied the demised premises, is liable for the payment of rent accruing during such occupancy. (Close v. Wilberforce, 1 Beav., 113; Jenkins v. Portman, 1 Keen, 435; S. C., 15 Eng. Ch. R., 455, n. 2; Robinson v. Rosher, 1 Young & Col., 7-11.)

He is liable in equity, although an action of covenant might not lie against him, if it was made to appear that no actual legal transfer of the lease had been made. (Quackenboss v. Clarke, 12 Wend., 555 .)

The evidence would justify a jury in finding, if they credited the testimony of Samuel B. Sohenck, that Ackerman purchased the lease, and promised Schenck to pay the rent, and procure Ms release from liability.

That Ackerman occupied the premises from May, 1855, into October, 1857, and paid the rent to the plaintiff, is indisputable.

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He testifies that he “ expected to pay rent whilst occupying the premises,” but denies that he promised to do so.

Jacob B. Schenck testified he was present at the bargain between S. B. Schenck and Ackerman, and that he and Ackerman “were to be jointly interested in the business to be carried on,” and “ Samuel B. Schenck had, by this bargain, no right to turn him” (Ackerman) “out.” “It was a part of the bargain that Samuel B. Schenck had no right to occupy the premises, and Ackerman had.”

Mr. Astor, after having so long received rent from Ackerman, could not terminate the lease or Ackerman’s occupancy under his purchase of it, on the ground that he had not consented in writing to the sale to Ackerman, or to his occupancy under it.

Had Ackerman continued in possession until after Kovember 1, 1857, there could be no doubt of his liability, as equitable assignee, to pay the rent.

The assignment by Ackerman to Lent, of the date of October 21,1857, was sufficiently comprehensive to transfer Ackerman’s interest, as equitable assignee. It conveyed the “ goods, wares and merchandise, in and about the store and premises, of the party of the first part, (Ackerman) No. 163 Greenwich street, in the city of Kew York,” (the premises in question,) and “ all other real and personal property and estate whatever, and wheresoever situate, and all interest therein, and all debts, dues and securities.”

Lent testified that at the time he took the assignment, he “knew from Ackerman he was in, paying $4,000 rent.” “I knew it was Astor’s store; had known it a year.”

Had the lease and its unexpired term b'een worth a premium, so that, concededly, it could have been sold so as to produce something to be divided among the creditors, I think it would have been Lent’s right and duty to convert it for their benefit.

He took possession of the premises, and put up a small sign, with “George B. Lent, Assignee,” upon it. On the first of Kovember, he offered to pay rent for the time he had then occupied, but refused to pay the whole quarter’s rent, which then became due.

He persisted in occupying the premises until he was removed by summary proceedings, or until proceedings instituted to dis

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possess him, had been so far prosecuted, that a warrant had been issued for his removal.

That having been done, he made a special agreement of the date of the 10th of December, 1857, for their occupation up to December 19.

Lent’s entry was under the assignment. His occupancy, whatever it was, was under it. He continued to occupy, and persisted in doing so, until coerced to leave by proceedings taken to eject him.

If these undisputed facts were not enough to charge him as equitable assignee, in possession and occupying as such, without calling upon the jury to decide any question of fact, then it should have been submitted to the jury, with instructions that if they found that Ackerman purchased the lease and agreed to pay the rent, and occupied the premises under that purchase and paid rent to the plaintiff until he assigned to Lent, and that Lent as his assignee entered upon the premises under the assignment, and occupied them as such assignee, until compelled to surrender possession, by proceedings instituted to dispossess him; the plaintiff was entitled to recover.

The fact is important and significant, that Lent, at the time he took possession, knew the store was owned by the plaintiff, and that his assignor was occupying and paying $4,000 rent. He knew, therefore, that Ackerman was occupying as lessee, or under some agreement with a lessee of the premises. He takes posr session, and although he knows who is the owner and lessor, he does not notify the lessor, that the entry is not for the purpose of taking possession as assignee, (Hanson v. Stevenson, 1 Barn. & Ald., 304; Lord Ellenborough, Ch. J.,) and continues to so occupy until called upon for the rent due November 1, 1857. If he then raised no question, except whether he was liable for the whole quarter, or only from the time he took possession, and if he did not then disavow any intent or purpose (in entering) to enter and occupy as assignee, or to continue to occupy as such, and especially if instead of doing that, he insisted upon the right to continue to occupy until dispossessed by legal proceedings a jury might find, as it seems to me, that the defendant deliberately took possession as assignee, with intent to occupy as such.

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If he did that, he is liable for the rent. It cannot be said on the evidence, that the plaintiffs conceded he did not so enter; when conceding that there was no disputed question of fact to be passed upon by the jury. Barnes v. Perine, (2 Kern., 18,) is not opposed to this view.

In that suit, the case made, did not contain all the evidence given, but only so much as was necessary to present the questions made at the trial.

In the case before us, we have all the evidence given, and when it states that the counsel for the respective parties conceded there was no disputed fact to be passed upon by the jury, the fair inference would seem to be, that matters sworn to positively, were conceded to be true, although some slight circumstances in opposition may have been testified to, in the effort made to rebut or overcome such testimony.

Journeay v. Brackley, (1 Hilt., 447,) decides nothing controlling in this case, as in that the assignees “ shortly after the assignment * * * notified the plaintiffs that they did not intend to take the building and would have nothing to do with the lease,” and “ surrendered the possession to the plaintiffs ” before any rent became due. The opinion is valuable, and contains an elaborate examination and review of numerous authorities bearing upon this subject.

It decides nothing in conflict with Young v. Peyser, ( 3 Bosw., 308 ,) nor with any point adjudged in Muir v. Glinsman, (referred to, in 1 Hilt., 455.)

The judgment should be reversed and a new trial granted, with costs to abide the event.

Ordered accordingly.