155 N.Y.S. 259 | N.Y. App. Term. | 1915
The defendant purchased from the receiver in bankruptcy of a bankrupt corporation all the property of the bankrupt, including a lease of certain premises in the city of New York, of which the plaintiff was landlord and the defendant became the successor of the bankrupt pursuant to section 9 of the Stock Corporation Law. On April 30, 1914, the defendant abandoned the premises and an action was brought against it by the plaintiff in the Municipal Court to recover the instalment of rent which became due on May 1, 1914. On appeal to the Appellate Division in that action it was held that the defendant was an assignee of the lease and as such was liable for the rent reserved therein by reason of its privity of estate irrespective of whether it remained in possession and an abandonment of the premises was insufficient to defeat the plaintiff’s right to recover the rent. Seventy-Eighth Street & Broadway Co. v. Purssell Mfg. Co., 166 App. Div. 684. The court said at page 685: “ The acceptance of the assignment creates a privity of estate between the lessor and the assignee, and it is not material that such acceptance was followed by the assignee’s entering into possession of the premises. (Stone v. Auerbach, 133 App. Div. 75; Tate v. Neary, 52 id. 78; Tate v McCormick, 23 Hun, 218.) The privity of estate thus created, however, may be terminated by assignment of the lease or by surrender of the premises with the consent of the lessor. (Frank v. N. Y., L. E. & W. R. R. Co., 122 N. Y. 197; Dassori v. Zarek, 71 App. Div. 538; Tate v. McCormick, supra.) But until that privity of estate has been terminated, the assignee remains liable for the rent stipulated to be paid.”
The present áction is brought to recover four instalments of rent under the lease, falling due on the 1st day of June, July, August and September, 1914,
It is claimed on behalf of the respondent that the defendant corporation, having taken over the property of its predecessor, including the leases in question, is thereby held to he hound by all the obligations which accompanied them. I think, however, that this rule applies in the case of a lease of real property only to the same extent as in a similar transaction between natural persons, namely that the defendant is hound by privity of estate to perform,all the covenants which run with the land, so long as the privity of estate continues and its further obligation ceases with an assignment of the lease. Section 9 of the Stock Corporation Law which provides that upon reorganization of a corporation, upon the sale of the corporate property and franchises to a successor corporation, “ such corporation shall be vested with and be entitled to exercise and enjoy all the rights, privileges and franchises which at the time of such sale belonged to or were vested in the corporation last owning the property sold, or its receiver, and shall be subject to all the provisions, duties and liabilities imposed by law on that corporation,” relates only to obligations imposed- by law and is not in my opinion broad enough to impose upon the defendant contractual obligations of its predecessor which it never assumed.
The judgment appealed from should he reversed, with costs, and the complaint dismissed, with costs.
Judgment reversed, with costs.