Bank of New York v. Hirschfeld

Sweeney, J.

Two issues are raised on this appeal: (1) whether appellant, as present owner of demised premises, is bound by á covenant in a lease between the previous owner and plaintiff to provide plaintiff with 10 free parking spaces in a garage adjoining the demised premises, which garage is owned solely by the previous owner, and (2) if appellant is bound by the .covenant, whether it'may be compelled to specifically perform the covenant and provide plaintiff the stipulated 10 free parking spaces.

On May 18, 1971, plaintiff, the Bank of New York, Albany (formerly known as the Mechanics and Farmers’ Bank of Albany and hereinafter referred to as “ the Bank”) entered into a leasehold agreement (hereinafter referred to as “ Bank Lease”) with the defendant, Abraham Hirschfeld, by and through the defendant, 112 State Street Operating Co., Inc. (hereinafter referred to as “ 112 ”). The Bank Lease involved a portion of the premises known as 112 State Street, Albany, New York, then owned by Hirschfeld and was for an initial term of 20 years, with an option for renewal covering an additional term of 40 years. Covenant 42 of the Bank Lease bound Hirschfeld as follows: “ Landlord will provide ten (10) free parking spaces in the adjoining garage building to be erected at 104-110 State Street free of charge to Tenant during the term of lease, or of any renewal periods. The Landlord promises and agrees at its own cost to construct a garage of more than five hundred (500) cars next door to the building in which the demised premises is located in accordance with plans and specifications submitted to Tenant herewith. Landlord promises and agrees that said garage will be ready and available for use and occupancy prior to July 1, 1972 or any prior date on which Temant may become liable for the payment of rent hereunder. Landlord promises and agrees that there shall be a passageway and entry by door from said neighboring garage to the main floor lobby of the first floor of the building in which the demised premises is located. A supplemental lease ^between Abraham Hirschfeld and the Tenant is being entered into today providing ten (10) ¡free spaces to Tenant as part of the consideration of this lease. Said spaces are to be available through the term of this lease and any and all renewal periods.”

Simultaneously with the execution of the Bank Lease, the Bank entered into a supplemental lease referred to in the above-quoted covenant 42 with defendant 112, acting as agent for Hirschfeld. This lease (hereinafter referred to as ‘1 Garage Lease ”) provided for 10 parking spaces in Hirschfeld’s property at 104-110 State Street, Albany, New York, to be furnished to the Bank free of charge for the same periods of time as set forth in said Bank Lease. The Garage Lease stipulated that the ‘ ‘ consideration for this Lease is embodied in the Lease [Bank Lease] between the Landlord and Tenant, which are two separate entities, executed this day for the rental of space in * * * 112 State Street, Albany, New York”. It also effectively incorporated all of the terms and conditions of the Bank Lease, so that it is apparent that the Garage Lease was intended to conform to the Bank Lease.

Memorandums of both the Bank Lease and the Garage Lease were subsequently recorded in the Albany County Clerk’s office.

Qn January 6,1972, Hirschfeld conveyed 112 State Street, subject to the Bank Lease, to the defendant 112. On January 19, 1973, in lieu of foreclosure, 112 conveyed the premises to the appellant, New York State Teachers’ Retirement System. The Garage Lease premises were and are presently owned solely by Hirschfeld. Following the conveyance to appellant of the Bank Lease premises, Hirschfeld, as of February 1, 1973, refused to provide the 10 parking spaces free of charge.

The present action for specific performance of both the Garage and Bank Leases was then- commenced against Hirschfeld, 1Í2 and appellant.

Special Term ordered Hirschfeld and 112 to specifically perform under the terms of the Garage Lease and appellant to perform pursuant to the Bank Lease. This appeal by appellant ensued. Neither Hirschfeld nor 112 is a party to this appeal.

Basically, appellant urges two grounds for reversal. It contends that it is not bound by covenant 42 of the Bank Lease! and, secondly, since it does not own 104-110 State Street, it is. unable to provide the 10 parking spaces and, therefore, cannot legally be compelled to specifically perform. We do not agree with either of these contentions.

Both leases manifest an intent by the contracting parties that the bank be furnished with 10 free parking spaces in the adjoining garage building for the term of the lease and any renewal period. Appellant is liable under the Bank Lease if covenant 42 runs with the land. In our view, an examination of this lease in its entirety demonstrates a clear intent by the parties that covenant 42 run with the land. Covenant 42 specifically provides that the landlord, at its own cost, will construct a garage, and further provides that the landlord agrees there shall, be ,a passageway and entry by door from this neighboring garage to the main floor lobby of the bank. Most significant is the language which follows providing for a supplemetal lease to be entered into between Hirschfeld and the bank for 10 free parking spaces, which supplemental lease is made a part of the consideration of the Bank Lease. Such expressions by the parties establish, in our opinion, a clear intent and desire that covenant 42 run with the land, enforceable against subsequent holders. Also present are the other requisites necessary to bold that the covenant runs with the land. (See Nicholson v. 300 Broadway Really Corp., 7 N Y 2d 240; Tarantelli v. Tripp Lake Estates, 23 A D 2d 905.) This being so, appellant is bound by covenant 42 of the Bank Lease to provide the bank with the 10 free parking spaces. This obligation was not altered by the simultaneously executed Garage Lease. These leases were separate and distinct, creating separate liabilities for different parties. Appellant’s obligation was created by the Bank Lease and Hirschfeld’s, by the Garage Lease. An examination of these leases and the surrounding circumstances evidence no intent by the parties that the Bank Lease be superseded by the Garage Lease, nor that the latter release the landlord under the Bank Lease from the obligation of furnishing the free garage space.

As to the other issue, appellant relies on Saperstein v. Mechanics & Farmers Sav. Bank of Albany (228 N. Y. 257) as authority for its contention that since appellant does not own 104-110 State Street, it is unable to furnish the 10 spaces and, consequently, specific performance will not lie. The instant case is readily distinguishable from Saperstein. In the case at bar, unlike Saperstein, both appellant and Hirschfeld are parties to the action and the obligation under covenant 42 of the Bank Lease can be performed. (Northern Operating Corp. v. Anopol, 25 A D 2d 551; cf. Maurer v. Albany Sand & Supply Co., 40 A D 2d 883.) Furthermore, it is of no consequence that appellant does not own the garage premises. Under the circumstances, it is not impossible for appellant to provide the necessary 10 ;spaces. As for the relative liabilities of the several defendants in the action, that question is not before us on this appeal.

We have examined the other issues raised by appellant and find them unpersuasive.

The judgment should be affirmed, with costs.