Irving Trust Co. v. Anahma Realty Corp. , 21 N.Y.S.2d 84 ( 1940 )

Glennon, J.

This action was instituted by plaintiffs upon a written agreement executed on June 25, 1926, to recover monthly installments due thereunder for a period which commenced on October 1, 1937, and ended on September 30, 1938, in the total sum of $8,499.96 with interest. The parties to the agreement are Irving Bank-Columbia Trust Company, now Irving Trust Company, as trustee, party of the first part, Trustees Building Corporation, named in the agreement as the lessee, party of the second part, and the defendant, Anahma Realty Corporation, as the party of the third part.

At the time the agreement was entered into, the defendant was the owner of the premises located at 342 Madison avenue, borough of Manhattan, New York city, known as the Canadian Pacific Building. During the period for which payments are demanded in the complaint, plaintiffs were the owners of. 336 Madison avenue, which immediately adjoined and now adjoins the Canadian Pacific Building.

Under the terms of the agreement, the defendant was given a light and air easement over the premises 336 Madison avenue. The consideration for this easement is recited in the agreement as follows: “Second. Anahma hereby agrees to pay to the Lessee the sum of Eight Thousand Five Hundred Dollars ($8,500) per annum, said payments being made in equal monthly installments in advance on the first day of each and every month during the term hereof commencing June 26, 1926, and while the Lessee and its successors in interest shall not be in default hereunder.”

At the time the agreement was entered into, the Trustees Building Corporation was the tenant of plaintiffs’ premises. Subsequently, plaintiffs dispossessed Trustees Building Corporation and as a result thereof the monthly installments for a period of time were paid directly to plaintiffs by the defendant. There is no dispute that the plaintiffs have performed all the terms and conditions of the agreement which, incidentally, does not terminate until April 30, 1947.

It might be well to note here that the plaintiffs have heretofore instituted several actions which ripened into judgments against the defendant to recover arrears due for different periods prior to those covered in the instant suit. In fact one of these actions was commenced for the payments which became due covering the period from October 1, 1936, to September 30, 1937. After issue was joined plaintiffs made an application for summary judgment at Special Term and the motion was granted. This, court unanimously affirmed that order and subsequently, after leave was granted to appeal to the Court of Appeals, the order of this court was affirmed unanimously. (Irving Trust Co. v. Anahma Realty Corp.,. 256 App. Div. 812, 820; 281 N. Y. 798.) The parties to that litigation were the same as those in the present case, except that a receiver, who was in possession of the premises at that time, was joined. Needless to say, the agreement there under consideration was the identical one which, at present, is under consideration.

Since the issues now raised concerning the installments due for the five-month period commencing October 1, 1937, to February 23, 1938, are the same, with the exception of the dates, as those covered in the prior litigation, there cannot be any question that plaintiffs are entitled to judgment for the installments which became due during the last-mentioned period. However, that simply would result in a partial judgment. We go further. We have mentioned the date of February 23, 1938. On that day the Canadian Pacific Building was sold “ subject ” to the light and air easement as provided by a judgment of foreclosure and sale. The question here presented is: Did the defendant, by virtue of the sale of the premises “ subject ” to the light and air easement, cease to be liable to the plaintiffs under the terms of the agreement? Our answer is that it did not. Paragraph “ twelfth ” of the agreement reads as follows: “ Twelfth. In case of a bona fide sale, exchange or other disposition of Canadian Pacific Building by Anahma or by any succeeding owner and the assumption of this agreement by the bona fide purchaser or grantee of the said building, the liability of such bona fide purchaser or grantee shall be accepted in place and stead of the liability of Anahma thereafter accruing hereunder, or of a succeeding owner, as the case may be, and Anahma or a succeeding owner, as the case may be, shall automatically be relieved and released of any further liability hereunder from and after such sale and assumption by the bona fide purchaser or grantee.”

The fact that the premises were sold “ subject ” to the light and air agreement did not relieve the defendant of its liability. While no one can question the fact that a mortgage foreclosure sale under ordinary circumstances would be a bona fide sale, still, a construction of the language used in paragraph “ twelfth ” would indicate that no such thought was in the minds of the contracting parties when the agreement was made. The sale “ or other disposition ” Was not made by the defendant, Anahma Realty Corporation, nor was there an “ assumption ” by the purchaser at the foreclosure sale of the obligation to pay to plaintiffs the sum of $8,500 per annum to cover the money due -under paragraph “ second ” of the agreement. (Dingeldein v. Third Avenue R. R. Co., 37 N. Y. 575; Schwartz v. Cahill, 220 id. 174.)

Under the circumstances, we are of the opinion that the plaintiffs’ motion to strike out the answer should be granted and judgment rendered in favor of the plaintiffs for the full amount.

The order appealed from should be reversed, with twenty dollars costs and disbursements, and the motion granted.

Untermyer and Cohn, JJ., concur; Martin, P. J., and Dore, J., dissent.