Herald Square Realty Co. v. Saks & Co.

Laughlin, J.: The plaintiff is the owner of premises abutting on the east on Broadway and Sixth avenue between Thirty-third and Thirty-fourth streets, in the borough of Manhattan, New York, and of the building thereon; and defendant is in possession thereof under a lease conducting a dry goods department store business. The submission of the case is for the purpose of obtaining a judicial decision as to whether the landlord or the tenant must bear the expenses, aggregating $7,843, incurred by the former in complying with certain resolutions of the board of estimate and apportionment, and with orders duly issued by the president of the borough of Manhattan, pursuant to said resolutions, for' the removal of encroachments of the show windows of the building on Thirty-fourth street and Broadway. On the 14th day of May, 1901, the plaintiff’s predecessors in title entered into an agreement with Andrew Saks, with a view to erecting a building on the premises and leasing the same to him, or to his assigns, for conducting a dry goods department store business. That agreement provided that the plans for the building should be submitted to him, or his assigns, for approval. The rights of the then owners of the premises under the agreement were duly assigned to the plaintiff on its incorporation on or about the 28th day of May, 1901; and the rights of Mr. Saks were duly assigned to the defendant, which was incorporated by him in the month of January, 1902. On the 14th day of November, 1901, plans and specifications for the building, and an application for permission to erect the same were duly filed with the department of buildings. The plans and specifi [568] cations indicated that the show windows of the stores on the ground floor projected from the front of the building beyond the building lines of Thirty-fourth street and Broadway, to the extent of twelve inches at the point of greatest encroachment. The plans and specifications and application were duly approved on the 2'Tth day of December, 1901, and the building was erected pursuant to said plans and specifications between that date and the 1st day of October, 1902. During the course of the erection of the building the plans therefor were from time to time submitted to the defendant. On the completion of the building, the defendant took possession and has ever since occupied the same and on the 2d day of November, 1903, the plaintiff and defendant duly executed an agreement in writing, by which the plaintiff leased the premises, with the building and appurtenances, to the defendant for the period of twenty years and six'months from the 1st day of November, 1903, at an annual rental payable in monthly installments. The tenant agreed to pay all taxes, assessments and' other charges levied against or imposed upon the property, pursuant to the authority of the Legislature of the State, or of the Congress of the United States. The tenant also covenanted that it would “ promptly comply at its own expense with all orders, notices, regulations or requirements of any Municipal, State or other Authority or Departments or of the New York Board of Fire Underwriters, with reference to said premises.” The lease contained further covenants on the part of the tenant, who was the party of the second part, and among others the following: “The said party of the second part further covenants that * * * it will at all times keep the demised premises and every portion thereof, inside and outside, and all articles mentioned in the annexed schedule, in good order, condition and repair. The party of the second part shall be at liberty to make alterations in and replace the fixtures belonging to the party of the first part, all improvements to which shall be and become the property of the party of the first part; nothing herein contained, however, shall be construed to prevent the said party of the second part from assigning this lease at any time during the term hereof to any firm or firms, person or persons, or corporations, having an actual unimpaired cash [569] capital of not less than Five hundred thousand dollars ($500,000) at the time of the assignment. * * * And the party of the second part hereby waives the right given by Section 197 of the Real Property Law of the State of New York,* to surrender the possession of said premises, and to terminate the obligation for rent, in case of destruction or injury by fire or the elements. * * * The party of the second part further agrees that it will make no alterations to the exterior of the premises herein demised without the written consent of the party of the first part, except that the said party of the second part shall have the right and option at any time during the term herein granted to install an entrance to the said building from the Thirty-fourth Street side thereof in accordance with designs and plans to he submitted to and approved by the said party of the first part. Nothing herein contained, however, shall be construed to prohibit the party of the second part from making such alterations to the interior of the said premises as it may deem desirable.” The tenant also agreed to keep the building insured against damages by fire for the benefit of the landlord, and to pay the premiums. It was further provided that in the event that the building should be partially destroyed by fire, it should he restored as speedily as possible, but that the landlord should not be obliged to pay toward the restoration more than the amount collected for insurance. On the 9th day of March, 1911, and the 15th day of February, 1912, the board of estimate and apportionment duly adopted resolutions, which, among other things, repealed, canceled and revoked all permits and licenses for the projection or erection of such encroachments upon or over the streets in question, and directing the president of the borough to remove such projections and encroachments, and thereafter the president of the borough duly ordered the plaintiff and defendant to remove the encroachments of said show windows. The plaintiff duly demanded that the defendant comply with said resolutions and order, and on its failure so to do the plaintiff complied therewith between the 30th day of July and the 20th [570] day of October, 1912, and the reasonable cost, and expense of doing the work was the amount specified. The plaintiff thereafter duly demanded of the defendant reimbursement for said amount with interest. The building having been constructed for the tenant, pursuant to plans and specifications approved for or by it, which show that the show windows encroached upon the streets in question, and it having thereafter taken the formal lease with covenants, among others, as herein set forth, I am of opinion that it was the duty of the tenant to remove the obstructions. (Markham v. Stevenson Brewing Co., 104 App. Div. 420; 111 id. 178; affd., 188 N. Y. 593; Bushwick Realty Co. v. Sanitary Fire Proofing Co., 129 App. Div. 533; Harder Realty & Construction Co. v. Lee, 74 Misc. Rep. 436; Jacobs v. McGuire, 77 id. 119.) Stress is laid in behalf of the tenant on the provisions of the lease, by which it covenanted that it would make no alterations to the exterior of the premises without the written consent of the landlord, except to install an entrance from Thirty-fourth street, according to designs and plans to be submitted to and approved by the landlord. Those provisions of the lease did not apply to alterations lawfully required by the public authorities. They were merely designed to prevent the tenant from making changes and alterations to the exterior of the building for its own convenience or purposes. The case of City of New York v. United States Trust Co. (116 App. Div. 349), upon which the tenant relies, is distinguishable principally upon the ground that in the case at bar the building in question was constructed for the tenant with these encroachments, the removal of which it was bound to know might lawfully be required, and in the lease in that case it was not, as here, expressly provided in the clause requiring the tenant to comply with lawful rules, regulations and ordinances, that such compliance should be at his expense, which left - that clause open to the construction that it was intended to relate to rules, regulations and ordinances with respect to the use of the premises, as distinguished from changes and alterations. Moreover, this lease was for a much longer term, and its provisions all tend to show that the tenant was to bear all expenses, and that the landlord was to receive the rent as a [571] return on its investment without • any deduction or liability on account of the premises during the term of the lease. It follows that the plaintiff is entitled to judgment against the defendant for the sum of $7,843, and interest thereon from the 20th day of October, 1912, together with costs. Ingraham, P. J., Dowling and Hotchkiss, JJ., concurred; Scott, J., dissented. Footnotes [*] General Laws, chap. 46 (Laws of 1896, chap. 547), § 197; now Consol. Laws, chap. 50 (Laws of 1909, chap. 52), § 227.— Rep.