The lease was made by the city of New York for twenty-one years from May 1, 1872, to *Page 506 Francis A. Leggett, and by mesne assignments, in 1882, these plaintiffs became the assignees thereof and owners of the building thereon. At that time, the elevated railroad had been constructed in the street, with the express consent of the city of New York, and it had been in operation for some two years previously. At the expiration of the leasehold term of twenty-one years, in 1893, the lease of the premises, under a covenant in the lease, was renewed by the city to the plaintiffs. Thereafter, in 1897, this action was commenced, in which plaintiffs prayed judgment for an injunction against the defendants and for damages. The plaintiffs were successful and their judgment was affirmed by the Appellate Division by a divided court; the majority of the learned justices holding that the doctrine ofKearney v. Metr. Elevated Ry. Co. (129 N.Y. 76), supported the plaintiffs' right of action. The dissenting justices held that the case came within the doctrine of the opinion inKernochan v. Manhattan Ry. Co. (161 N.Y. 339).
I agree in the latter view and I think that this judgment should be reversed. In the Kearney case, relied upon in the prevailing opinion below, the lease had been made in 1863 and Kearney became the assignee of the lease and the owner of a building theretofore erected upon the leased property, in 1866; which was prior to the construction of the elevated railway. The renewal of that lease, at a rental fixed upon an appraisement, in 1884, was held not to affect Kearney's right to recover damages. He had been the absolute owner of the building since 1866 and we could perceive no reason why he was not entitled to receive such sum as represented its diminished rental value in consequence of the construction of the defendant's railroad. A distinction between that case and that of Witmark v. N.Y. El. R.R. Co., (149 N.Y. 393), and this is apparent, in that these plaintiffs took an assignment of the lease, and became the owners of the building, after the railroad had been constructed and under a lease, which recognized the possible devotion of some part of the property to public purposes. It seems to me that when the plaintiffs thus *Page 507 acquired the property, in the existing situation of an elevated railroad in operation in the street and with that situation legitimately created by the city, as the owner of the fee, they were in no position to assert that they were damaged. The effect of the city's consent to the erection of an elevated railway was to grant to the defendants its interests in the street, whether as owner of the fee of the street, or as owner of the abutting property. It was so held in Herzog v. N.Y. Elevated R.R. Co., (76 Hun, 486), and the decision of the Appellate Division was affirmed here on the opinion below. (151 N.Y. 665.) The plaintiffs acquired their property with, at least, constructive notice of the fact that the street easements had been lawfully granted to the defendants and when the renewal lease was made, in 1893, the lessees knew that the property was shorn thereof. (White v. Manhattan Railway Co., 139 N.Y. 19.) It is to be presumed that they paid for leasehold and building at a value as affected by the situation.
The principle of the decision in the Kernochan Case, (supra), applies, and the presumption obtains, that when the rent, upon the renewal of the lease, was fixed by agreement between the plaintiffs and the city authorities, its amount was fixed with reference to the changed situation in the street. Hence the plaintiffs did not suffer damage in that respect. In that case, the lease provided for periodical readjustments of rent during the running of the term and it was held that the arbitrators, in determining the rental, would, naturally, be presumed to have appraised the value of the land as it stood; having in consideration all the facts relating to its situation and to the facilities for its enjoyment, with an elevated railroad in the street in front of it, as a permanent structure. The prior case of Kernochan v. N.Y. Elevated R.R. Co. (128 N.Y. 559), had decided that when a party has leased after the construction of the elevated railroad, the presumption is that the rent reserved in the lease was governed by the actual situation of the property.
If the burden of the elevated railroad had been greatly increased, that might support the action to recover, pro tanto, *Page 508 for the damages to the abutting property, but I have been convinced that the plaintiffs should not be allowed to maintain their action to the broad extent of their demand for relief. I do not think, under the circumstances of this case, and in the absence of any appropriate language, that we can, or should, in fairness, or justly, hold that these plaintiffs took over, upon the assignment of the lease, some claim of their assignor against the defendants. We should hold that they paid for the leasehold property a price, which was governed by the actual value, as affected by existing and legitimate conditions.
HAIGHT, CULLEN and WERNER, JJ., concur with MARTIN, J.; PARKER, Ch. J., and O'BRIEN, J., concur with GRAY, J.
Judgment affirmed.