Summary
In Barrow Realty Corp. v. Village Brewery Restaurant, Inc., 272 A.D. 262, 70 N.Y.S.2d 545, 546 (1947), New York's intermediate appellate court considered whether or not a provision of the original lease (providing that the tenant shall pay the landlord's attorney fees in a proceeding brought because of tenant's default) survived the lease expiration, and concluded that "the clause... is carried over, as are other provisions of the lease, to the tenant's occupancy during the period in which he remains in possession under the emergency rent law after the expiration of the term of the lease."
Summary of this case from Resolution Trust Corp. v. DiamondOpinion
May 16, 1947.
Appeal from Supreme Court in the First Judicial Department, GENUNG, J.
Leon London of counsel ( Jesse A. Volk with him on the brief), for appellant.
Max Epstein of counsel, for respondent.
We are of the opinion that the clause in a lease, providing that any expense, including reasonable attorney's fees, incurred by the landlord in any proceeding instituted by reason of the tenant's default "hereunder" shall be deemed to be additional rent "hereunder", is carried over, as are other provisions of the lease, to the tenant's occupancy during the period in which he remains in possession under the emergency rent law after the expiration of the term of the lease. Default in the payment of the emergency rent is not merely a statutory default; it is a default under the lease. True, the tenant remains in possession by virtue of the statute and must pay rent measured by the statute, but the continued occupancy permitted by the statute stems from the lease and the tenancy created thereby, and the emergency rent is fixed on the basis of the rental established in the lease. With the terms of the lease otherwise remaining in force, it may not fairly be said that the rent payable during the emergency period is merely a statutory rent and is not under the lease.
The obligation of the tenant under the lease to reimburse the landlord for expenses incurred in remedying the tenant's default is a substantial obligation of the lease under section 8 of the Business Rent Law (L. 1945, ch. 314, § 8). It properly applies to a proceeding which the landlord is compelled to institute to collect the emergency rent. As the tenant's failure to pay the counsel fee incurred in collecting the emergency rent is a violation by the tenant of a substantial obligation of the lease, entitling the landlord to dispossess the tenant, the landlord may collect the counsel fee in a summary proceeding.
The determination of the Appellate Term should be reversed and the final order of the Municipal Court affirmed, with costs and disbursements to the landlord in this court and in the Appellate Term.
The term and the rent required under the lease were not carried over. Attorneys' fees are not properly "additional" rent under the statutory requirement; if they were, the $500 should be increased by 15% to $575. The nature of the proceeding and proof adduced show that the theory of the action was not for a violation of subdivision (b) of section 8 of the Business Rent Law. (L. 1945, ch. 314.)
Accordingly, I dissent and vote to affirm.
GLENNON, COHN and PECK, JJ., concur in Per Curiam opinion; DORE, J., dissents in opinion, in which MARTIN, P.J., concurs.
Determination of the Appellate Term reversed and the final order of the Municipal Court affirmed, with costs and disbursements to the landlord in this court and in the Appellate Term. Settle order on notice. [See post, p. 873.]