Huerstel v. Lorillard — 29 N.Y. Super. Ct. 260

Majority

p. 260

Francis Huerstel plaintiff, vs. Blaise Lorillard et al. defendants.

Headnote

1. Rent reserved by a lease is a subject of assignment, and will pass under a transfer of the lease from a lessor to an assignee, with all the “ right, title and interest ” of the former therein, and to the “ rents, issues and profits ” thereof, and the “ covenants and agreements therein contained.”

2. By such an assignment the lessor does not transfer to the assignee any interest whatever in the demised estate. He simply sets over to the assignee the covenant of his tenant to pay the rent, and with it the right to compel the performance of such covenant, reserving to and retaining in, himself the estate in the land, as well as his reversionary interest in it.

8. An assignment of the rent, and of a covenant by a lessee to pay rent, is a mere chose in action, and conveys no interest in the land ; there is, therefore, no privity of estate created by the assignmént, between the assignee and lessee of the demised premises. •

4. Such an assignee, as such, can only receive the rents, and compel their payment by action upon the covenant to pay. If the tenant refuses either to go into, or remain in possession, or pay the rent, the assignee cannot himself either go into possession or turn the tenant out.

6. Although the assignee of a lease has obtained a judgment against the lessor and assignor of the lease, upon his guaranty of payment of certain sums of money, and an execution issued thereon has been returned unsatisfied, he is not entitled to have a receiver of the rents and profits of the premises appointed pending an action brought by him to set aside as fraudulent, conveyances from the lessor to his son, and from the latter to the lessor’s wife.

6. A receiver cannot be put in possession of demised premises on the application of a party who, not only, is not himself entitled to the possession, but has no interest whatever in the subject sought to be, possessed.

(Before Monell, J. at special term,

January, 1867.)

The complaint- alleged that in February, 1866, the defendant, Blaise Lorillard, being the then owner of premises No. 69 Bleecker street, in the city of New York, leased the same, in writing, to the defendant, Hurlburt, for a term of ten years from the 1st of May thereafter, at an annual rent of $2500; and therein covenanted to make certain specified alterations in the buildings, &c.; and that the lease was duly recorded; that subsequently, in the same month, for the consideration of $10,000, Lorillard assigned the lease to the plaintiff, with all his “ right, title and interest there

p. 261

in and thereto, and to the rents, issues and profits arising or thereafter to arise, during the whole term thereof, and to the covenants and agreements therein contained.” In such assignment Lorillard covenanted to make such alterations, and to* pay the interest on any mortgage on said premises, and all taxes and assessments thereon, and to insure the same against loss by fire; and he also guarantied the performance by the lessee of all his covenants. The assignment was duly recorded, and notice thereof given to the tenant. " That in August, 1866, a quarter’s rent became due, and being unpaid, the plaintiff recovered a judgment for the same against Lorillard upon his guaranty; upon which judgment an execution has been returned unsatisfied; that the tenant, Hurlburt, never took possession of said premises, assigning as a reason therefor that Lorillard had failed to make the alterations mentioned in the lease ; and that a suit against him to recover the rent was pending; that the premises are subject to a mortgage for $10,000; that six months’ interest became due in July, 1866, and remains unpaid; and that the taxes for the said year are also unpaid.

The complaint alleges collusion between the lessor and lessee to injure and deceive the plaintiff. It alleges that the premises are unoccupied, and that in May, 1866, Lorillard made a pretended sale thereof to his son; who, on the following day conveyed the same, without consideration, to his mother, the wife of Lorillard; and that such conveyance by Lorillard to his son was made with intent to hinder, delay and defraud the creditors of Lorillard. It alleges knowledge in said grantees of said lease and assignment.

The complaint demanded judgment that such conveyances be adjudged fraudulent and void as to the plaintiff; that a receiver be appointed of the demised premises, to take possession thereof, and to rent the same, and to apply the rent in payment of the interest and taxes due and to become due, and the balance to the plaintiff.

p. 262

The motion for a receiver was made upon the complaint alone.

L. Birdseye, for the motion.

G. Tillotson, opposed.

The rent reserved by the lease was the subject of assignment, and passed by the transfer from Lorillard to the plaintiff. Nothing more was intended to pass. Lorillard assigned all his right, title and interest in the lease, which was merely his right to receive the rent. He did not intend, nor did he in terms or in fact, transfer to the plaintiff any interest whatever in the demised estate. He simply set over to the assignee the covenant of his tenant to pay the rent, and with it the right to compel the performance of such covenant, reserving to and retaining in himself not only the estate, but his reversionary interest in it. The assignment of the rent and of the covenant to pay rent was a mere chose in action, and conveyed no interest in the land; and there was, therefore, no privity of estate created by the assignment, between the assignee and the demised premises. There was, however, such a privity of contract as would have enabled the plaintiff, even before the Code, to sue in his own nam'e for a breach of any of the covenants of the lessee. (Willard v. Tillman, 2 Hill, 274 .)

Taking no interest in the land, the assignee acquired none of the rights of the landlord, except merely to enforce the performance of the lessee’s covenants by action to recover the rent. He could not enter for breach of such covenants, either by action of ejectment or by summary process'under the statute. He had not the reversion, and none but the reversioner, his heirs or assigns- can re-enter for covenant or condition broken. (2 R. S. 747, § 23. Taylor, L. & T. 138.) Upon a failure to pay rent, the assignee of the covenant to pay can compel its payment by action; but he cannot resort to any measures to regain possession of-the demised premises.

p. 263

As assignee, therefore, the only rights and remedies of the plaintiff are to receive the rents, and to compel their payment by action upon the covenant to pay.

But it is claimed that, having obtained judgment against the lessor and assignor of the lease upon his guaranty of payment, and having an execution thereon returned unsatisfied, the plaintiff is entitled to have a receiver of the premises, pending the action to set aside the conveyance to Lorillard’s son, and that by him to Lorillard’s wife.

The question as to the validity of these deeds cannot be considered on this motion. The plaintiff, as a judgment creditor of the grantor, is in a condition to assail them; but until they are adjudged to be fraudulent, and therefore void, they must be presumed to be valid, and the possession of the grantee under them cannot be disturbed. If the plaintiff succeeds in invalidating the deeds, his judgment will thereupon attach, and become a lien upon the land. I have never known of extending a receivership to land, the title to which was in controversy. The grantee, failing to sustain his title, may be called to account for the rents and profits while in possession, as upon a recovery in ejectment, but she cannot be deprived of the possession pending the action.

The error of the plaintiff’s counsel consists, I think, in his supposing that the assignee of the lease took, by virtue of the assignment, an interest in the land. If that was so, then the record of the lease and assignment would have rendered the conveyance subject to such interest. But, as has been seen, the assignee took no such interest; and the record of the assignment was, therefore, unnecessary. The assignee can take the rent, but if the tenant refuses to go into or continue in possession, or to pay the rent, the former cannot himself go into possession, nor turn the latter out. Hence it follows, that a receiver cannot be put in possession on the application of a party who not only is not himself entitled to the possession, but who has no interest whatever in the subject sought to be possessed.

The motion must be denied, with $10 costs.