In re City of New York

219 A.D. 387, 220 N.Y.S. 23, 1927 N.Y. App. Div. LEXIS 10922
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJanuary 28, 1927
DocketAppeal No. 2
StatusPublished
Cited by5 cases

This text of 219 A.D. 387 (In re City of New York) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re City of New York, 219 A.D. 387, 220 N.Y.S. 23, 1927 N.Y. App. Div. LEXIS 10922 (N.Y. Ct. App. 1927).

Opinion

Young, J.

This is a separate appeal by the appellant from the same decree involved in the appeal by the city of New York, decided herewith (Matter of City of New York [Upper N. Y. Bay] No. 1, 219 App. Div. 382), so far as it affects its interest in parcels 13 and 13-a on the damage map.

On October 11, 1919, when title vested in the city of New York, parcels 13 and 13-a were owned by the respondent Stapleton Dock & Warehouse Corporation, Inc. On July 3, 1918, that corporation made and executed a lease to the Johnson Ship Building, Repair and Dry Dock Company, Inc. The name of the lessee in that lease was thereafter duly changed to the Greater New York Dock and Warehouse Company, Inc., the appellant herein. That lease contained the following clauses:

18. The tenant further agrees that should the whole of the demised premises be taken by the Government of the United States, the State of New York, the City of New York or any government or power whatsoever, or by any corporation under the right of eminent domain or should the whole of said demised premises be condemned by any court, City, County, State or governmental authority or office, department or bureau of the City, State or United States, that then and in that event this lease shall cease and come to an end, and in such event the tenant [389]*389shall have the right to remove all improvements placed by it upon the demised premises as heretofore provided in paragraph ‘ 12 for such removal at the expiration of the term, provided the tenant shall have duly performed all the covenants of this lease on its part to be carried out and performed up to the time of such removal, or if the buildings and improvements may not be so removed or the tenant elects not to so remove them, then the tenant may receive from the body or authority taking the property, the value of such buildings and improvements as under the terms of this lease it might have removed, as personal property and not as part of the real estate, and in no event shall the tenant receive any portion of any award made to the landlord, but its sole rights shall be limited to a separate claim for the value of the aforesaid buildings and improvements as personal property' and the tenant hereby waives and relinquishes all other claim or claims for damages against said landlord or against the body, authority, party or parties acquiring the said premises, and the tenant shall not claim any other compensation or damages. * * *
“ 20. At any time prior to the 1st day of January, 1922, the tenant upon giving the landlord sixty days written notice to that effect, shall have the option to purchase the demised premises and any and all improvements thereon for the sum and at the rate of Twelve hundred and fifty dollars ($1,250) per front or linear foot, measured on Front Street, which said purchase price shall be paid in cash. * * * If such option be exercised and such written notice given, the tenant shall forthwith deposit with the landlord the sum of Ten thousand dollars ($10,000) in cash on account of the purchase price, and the title shall close and the deed be delivered and the balance of the purchase price paid not more than thirty days thereafter.”

The Special Term awarded $533,921.06 as the value of the land to the respondent Stapleton Dock & Warehouse Corporation, Inc., as owner of the property. It also awarded $3,000 to the appellant for certain improvements upon these parcels. It, however, made no award to the appellant for the value of its option.

The question involved is new and interesting. There does not seem to be any decision involving the precise point presented here. The respondent contends that by the 18th clause of the lease, the appellant waived and relinquished all claim against the landlord or against the city, except for the value of the buildings and improvements, citing Matter of Mayor, etc., of New York (168 N. Y. 254). It was held in that case that where tenants lease property expressly subject to the contingency that the landlord might, by proceedings, under statute, in behalf of a municipality, [390]*390be deprived of the title or right to the possession of the property, they are not entitled to have the value of their unexpired terms ascertained and deducted from the award to the andlord in such proceedings representing the value of the property at the time it was made.

In that case, however, the lease invo'ved did not contain any option to the tenant for the purchase of the property. The appellant is making no claim for damages for the value of the unexpired term of its lease. Its sole claim for damage is the value of its option, and it contends, in substance, that the option contained in the lease is a separate contract, independent of the lease itself, and that the 18th clause by which it waived its right for damages related solely to any damage resulting to it from the termination of its lease by the condemnation proceeding before the expiration of the full term, and did not, in any way, relate to or affect any damage sustained by it by reason of being deprived of its rights under the option.

It is also claimed by the appellant that this option survived the termination of the lease. The clause containing the option makes no reference to any other provision of the lease nor to the termination thereof, and the appellant asserts that the option gave it the right to purchase the property at any time prior to January 1, 1922, for a certain price therein named, irrespective of whether or not the lease was sooner terminated by a condemnation proceeding or otherwise. In my opinion, this contention is sound in principle.

Briefly stated, the rights of the parties under this lease and option are as follows: The appellant had the right to occupy the premises for the term of the lease unless sooner terminated by the condemnation proceeding. When the condemnation proceeding was commenced and the title vested in the city, the lease and the tenant’s full term thereunder ended. The tenant, upon such condemnation, waived any right to damages by reason of the termination of the lease except as to buildings and improvements. The tenant could not, therefore, recover from the landlord, or have awarded to it in the condemnation proceeding, anything for the value of its unexpired term. But the tenant had, under the option, the right to purchase the property at a certain price and within a certain period of time, irrespective of the termination of the lease. This option, however, was, by the condemnation, acquired by the city, and the tenant’s rights thereunder vested in the city. Had the tenant exercised its option before condemnation, it would have become a vendee under an executory contract of sale. It would have then held the equitable title and estate in the property. [391]*391That it did not become such an equitable owner was because the condemnation proceeding prevented it from exercising such option during its life. After the condemnation proceeding, it could not have given any notice or made any tender provided for in the option clause, because its rights thereunder had ceased and had vested in the city. In other words, these rights were taken away by the city in the condemnation proceeding and the award made shows that they were valuable.

In my opinion, the tenant should not be held to have waived its right to damages resulting from the abrogation of its option, unless some controlling authority compels us to construe the 18th clause of the lease as having that effect.

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Cite This Page — Counsel Stack

Bluebook (online)
219 A.D. 387, 220 N.Y.S. 23, 1927 N.Y. App. Div. LEXIS 10922, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-city-of-new-york-nyappdiv-1927.