In re Coatsworth

Ward, J.: 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 — 302 — 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 — 303 — 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 — 304 — 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 — 305 — 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 — 306 — '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.’ ” — 307 — 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. ‘