Morse & Grossman, Inc. v. Acker & Co.

79 N.E.2d 258, 297 N.Y. 304
New York Court of Appeals·Decided April 22, 1948·Published·Cited by 21 cases

Opinion

Fuld, J.

These appeals, presenting another aspect of the emergency rent legislation which affects property in the city of *308 New York, require construction and application of section 8 of the Commercial Rent Law (L. 1945, ch. 3, as amd.). The respondent in each case is a landlord; in one case, he is the owner of the building 162 Maiden Lane, in the other, of 35 De Peyster Street. Each brought a proceeding pursuant to subdivision (d) of section 8 of the Rent Law to recover possession of his respective building from the appellant who occupies both of these buildings as tenant.

For upwards of eighty years, appellant has leased and occupied six contiguous and physically integrated buildings which include the two here involved. Covering an entire block front, the buildings, through the years have been, and still are, devoted exclusively to housing a single unitary business enterprise — appellant’s bonded warehouse. All six buildings are customarily served by a common entrance located in the building at 73-74 South Street, wherein is also situated the warehouse office. The unitary and interdependent character of the premises is further emphasized by the circumstances that three of the locations — including 35 De Peyster Street and 162 Maiden Lane — have no other or separate means of entrance whatever and that 162 Maiden Lane has no stairway, elevator or electric hoist, the only way up or down being through the adjoining building, 73-74 South Street, which connects with 162 Maiden Lane at various floor levels.

Appellant and its former landlord, the predecessor in title of both respondents, always treated and dealt with the six buildings as a single integrated structure. Indeed, this concept of singleness, evident throughout, is all-pervasive. The parties consid: ered the several buildings as ‘ ‘ the premises ’ ’, and, in the last written lease between them, the landlord reserved a single'rental for the entire leasehold — $8,000 a year plus 50% of the “ net profit earned by the operation of the premises No effort was made, no intent evidenced on either side, to apportion the fixed flat rent of $8,000 a year among the component parts; and, just as significant, the variable percentage rent was measured by the profits derived from operation of the entire property as a unitary enterprise with no attempt at apportionment or allocation. And when, in April, 1945, following passage of the emergency rent legislation, the landlord gave notice ■— pursuant to section 3 of the Commercial Rent Law — of the emergency rent to be *309 paid, he specified a single undivided and indivisible rental for the entire premises. In addition, the lessor’s privilege of cancellation was, under the lease, applicable to the entire leasehold, and to the entirety alone, and was conditioned upon circumstances affecting the whole of the space rented. After the written lease expired on December 31, 1945, appellant remained in possession of the premises on a month to month basis “ under the exact same terms and conditions * * * contained in [his] written lease ”.

Approximately a year later, the former landlord, in a series of apparently unconnected transactions, sold five of the individual buildings, each to a separate and different vendee. Two of these purchasers, the respondents herein,.have instituted the present summary proceedings to recover possession of their respective properties.

It is against the background of these facts that we are called upon to determine whether subdivision (d) of section 8 of the Commercial Rent Law, which makes no provision whatever for partial dispossession, nevertheless permits the piecemeal eviction of a tenant from various portions of his space simply because the several components of the demised premises were separately disposed of to different persons.

By its introductory sentence, section 8 flatly prohibits the eviction or removal of a tenant from his leasehold as long as he pays his rent, except in specific enumerated instances. Insofar as here material, the statute recites that “ So long as the tenant continues to pay the rent ” authorized by law and notwithstanding the expiration of his lease, “ no tenant shall be removed from any commercial space, by action or proceeding to evict or to recover possession, by exclusion from possession, or otherwise * * * unless: * * * (d) The landlord owned or acquired an enforceable right to buy or take possession of the building or other rental area on or before January twenty-fourth, nineteen hundred forty-five and seeks in good faith to recover possession of the commercial space for his immediate and personal use; or possession is sought by a person who acquires title to the building or other rental area subsequent to January twenty-fourth, nineteen hundred forty-five, and who likewise seeks in good faith to recover possession of the commercial space for his immediate and personal use; provided, however, that * * * *310 such landlord or such person shall have an equity in the property of not less than twenty-five per centum of the purchase price ”. (Emphasis supplied.) (L. 1945, ch. 3, as amd. hy L. 1946, ch. 272.)

The basic purpose of the emergency rent legislation was to protect tenants by placing a ceiling on rents and by preventing widespread evictions while the emergency created by the wartime shortage of space continued. (Commercial Rent Law, § 1; see, also, Matter of Fifth Madison Corp. [N. Y. Tel. Co.], 297 N. Y. 155; Twentieth Century Associates, Inc., v. Waldman, 294 N. Y. 571.) Accordingly, consonant with settled canons of construction, the statutory language must be interpreted to effectuate that purpose.

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Morse & Grossman, Inc. v. Acker & Co., 79 N.E.2d 258, 297 N.Y. 304 (N.Y. 1948).

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