Anchor Holding Co. v. Michael's Coffee Shop

— Order, Appellate Term, Supreme Court, New York County, entered April 17, 1979 which affirmed without prejudice to a plenary suit by the intervenor DICPA Foods, Inc. (DICPA) an order of the Civil Court, New York County, dated November 8, 1977 denying the application of DICPA to vacate a final judgment of possession, affirmed without costs. The facts are fairly stated in the dissent. We all agree with the Appellate Term that the conveyance to Michael’s Coffee Shop was a sublease and not an assignment since DICPA had retained a reversionary interest. Although DICPA at times asserted it had assigned the lease, it is plain that there was no assignment. Anchor, as landlord, and its attorney knew at all the times involved that DICPA was asserting a reversionary interest, even though its attorney called the transfer an assignment. The instrument relied upon by Anchor states it is a sublease. The letter of DICPA’s attorney, dated August 30, 1977, upon which Anchor also relies, describing the transaction as an assignment, nonetheless asserts the reversionary interest of DICPA. When the landlord insti 536 tuted the holdover proceeding it and its attorney knew that DICPA asserted a reversionary interest, characteristic of a sublease. It is clear that the landlord was never furnished with an assignment. Moreover, DICPA tendered the rent prior to the commencement of the proceeding and the tender was refused. Under the circumstances DICPA was entitled to notice and to be joined as a party in the nonpayment dispossess proceeding. While we concur in Appellate Term’s determination that it is improvident to reinstate a tenant so long after eviction and after the premises have been relet, it does not lie in landlord’s mouth to assert that DICPA was not entitled to notice and to be served and made a party. The plain fact is that despite its attorney’s statement that there had been an assignment, none was forthcoming and none exists. A reversionary interest was always asserted. DICPA is not entitled to reinstatement as a tenant because of the long delay as Appellate Term held. However, it has a right to litigate its claims in a plenary suit, if so advised. Landlord’s claim that it was misled by the representations of DICPA and its attorney that there was an assignment is appropriate to be raised in such action. It may well be that such representations and the failure to produce the assignment may be found to preclude any recovery by DICPA. Landlord’s claim in this proceeding to which DICPA was not made a party should not foreclose DICPA’s rights to litigate its claims. Concur — Birns, Sandler and Fein, JJ.