Opinion
November 7, 1913.
James A. Donnelly, for the plaintiff.
Charles J. Nehrbas, for the defendant.
This controversy relates to the plaintiff's claim to be entitled to a renewal for the term of twenty-one years of the premises No. 103 Park row in the city of New York, the ownership of which is vested in the city of New York, apparently in its corporate capacity, as it is not held and occupied for any public use.
The property was originally leased to John Dixey on October 1, 1811, for a term of twenty-one years from May 1, 1806. Dixey improved it by the erection of a building which, with some additions and alterations, still stands upon the property. The lease was renewed in 1827 and again in 1848, 1869 and 1890. Each lease was for the term of twenty-one years, and each contained a covenant for renewal in the following words: "And, the said Mayor, Aldermen and Commonalty of the City of New York, for themselves, their successors and assigns, do covenant, grant and agree to and with the said John Dixey, his executors, administrators and assigns, that they the said Mayor, Aldermen Commonalty of the City of New York their successors and assigns, shall and will, at the expiration of the term hereby demised, again demise and to farm let the above premises in pursuance of the present lease unto the said John Dixey, his executors, administrators or assigns for and during the term of twenty-one years thereafter, with a like covenant for future renewals of the lease, as is contained in this present Indenture, and upon such rents and other terms and conditions as shall be agreed upon between the parties, or as shall be determined by two sworn appraisers, one of whom to be chosen by each of the said parties."
Upon the expiration in 1911 of the lease made in 1890 the defendant refused to execute a new lease in accordance with the terms of the above-quoted covenant, and plaintiff, who has succeeded to all the rights of the last lessee, seeks to compel such a lease to be made.
The question, as we think, resolves itself into one of power in the city of New York to make such a covenant in the lease executed in 1890.
Prior to 1844 there appears to have been no limitation upon the term for which real property belonging to the city of New York could lawfully be leased. In that year, however, the common council adopted the now well-known ordinance which established "The Sinking Fund of the City of New York for the redemption of the City debt," and created the commissioners of the sinking fund. This ordinance was ratified and confirmed by the Legislature. (Laws of 1845, chap. 225; Laws of 1851, chap. 235.) By this ordinance no lease of public lands for more than one year was permitted except with the consent of the commissioners of the sinking fund, and, with such consent, no lease was permitted to be made for more than five years. In 1853 an act was passed (Laws of 1853, chap. 217, § 7) providing that all leases of city property be made after public advertisement and by public letting, for a term not to exceed ten years.
Chapter 446 of the Laws of 1857, section 41, contains a similar provision.
Under section 8 of chapter 876 of the Laws of 1869 the commissioners of the sinking fund were given power to lease city property at public letting for a term not to exceed ten years.
Under the Consolidation Act (Laws of 1882, chap. 410, § 170) the sinking fund commissioners were given similar power to make leases at public auction or under sealed bids for a term not exceeding ten years.
The present charter of the city of New York, in section 205, provides: "Powers of Commissioners of Sinking Fund. § 205. The said board shall, except as in this act otherwise specifically provided, have power to sell or lease for the highest marketable price or rental at public auction or by sealed bids, and always after public advertisement for a period of at least fifteen days in the City Record, and after appraisal under the direction of said board made within three months of the date of sale, any city property, except parks, wharves and piers and land under water, except as hereinafter provided, but no such lease shall run for a term longer than ten years, nor a renewal for a longer period than ten years." (See Laws of 1897, chap. 378, § 205, as amd. by Laws of 1901, chap. 466, and Laws of 1913, chap. 259.)
It thus appears that since 1844 no officer or officers of the city government have had authority to lease city property for a longer period than ten years, and it is well settled that persons dealing with public officers respecting public property are chargeable with knowledge of the limitation of power imposed upon such officers, and can gain no advantage as against a municipal or other public corporation by reason of having relied upon acts of such officers in excess of their lawful powers. It is conceded by the defendant that, notwithstanding the ordinance of 1844, the city was bound to give and its officers were justified in executing a lease for twenty-one years in 1848, because it had contracted so to do by the lease of 1827 made at a time when such a contract was legal. But the insertion of the renewal clause, with a specific covenant for a further renewal, in the lease of 1848, was equivalent to making a lease in that year for forty-two years, if not, as the plaintiff insists, for perpetuity. Such a lease was forbidden by the ordinance of 1844, and by several acts of the Legislature passed before 1869, when the lease of 1848 expired.
We are clearly of the opinion that it was incompetent and illegal to include, if not in the lease of 1848, certainly in the leases of 1869 and 1890, the specific covenant for a further renewal for twenty-one years. The lease executed in 1811 and its renewals should not be construed so as to create a perpetuity, and the covenant in the lease of 1827 would have been wholly satisfied by giving the lessee two renewals, to wit, those of 1848 and 1869. A similar covenant to that now under consideration was so construed by the Court of Appeals in Syms v. Mayor, etc. ( 105 N.Y. 153). As, therefore, the city was not bound by the covenant in the lease of 1827 to give more than two renewals, and as its officers had no legal authority to insert in the lease of 1848 or that of 1869 a covenant for a further renewal, their attempt to make such a covenant on the part of the city must be held to be inoperative and void. Consequently, upon the expiration of the lease of 1869, if not upon the expiration of the lease of 1848, the lessee had no right, by virtue of any covenant in his lease, to a further renewal. It follows necessarily that the lessee at the expiration of the lease executed in 1890 had no such right.
A question is also submitted respecting the right of the lessee to remove the buildings upon the property, or to be compensated therefor. The general rule is that buildings erected by a tenant become the property of the landlord if not removed before the expiration of the lease. ( Loughran v. Ross, 45 N.Y. 792; Talbot v. Cruger, 151 id. 117.) In the lease held by plaintiff the tenant is given ten days after the expiration of the lease within which to remove the buildings, but it is provided that he may not do so "at any time afterwards." Plaintiff has allowed the ten days to elapse and has not removed the building. She has thus forfeited the right to do so. It has become the property of the landlord by operation of law and plaintiff has no valid claim to be paid its value.
The defendant is entitled to judgment in accordance with the foregoing opinion, but under the terms of the submission without costs.
INGRAHAM, P.J., LAUGHLIN, DOWLING and HOTCHKISS, JJ., concurred.
Judgment ordered for defendant, without costs. Order to be settled on notice.