Opinion
March 14, 1950.
Appeal from Appellate Division of the Supreme Court in the First Judicial Department.
Milton D. Goldman of counsel ( Emanuel Lewis Greene with him on the brief; Field, Goldman Greene, attorneys), for appellant.
Gilbert Goldstein of counsel ( Goldstein Goldstein, attorneys), for respondents.
The landlord in this proceeding is the lessee of an entire building under a ten-year lease terminating September 14, 1953. It sublet a portion of the premises to the tenant herein for a term which ended on January 14, 1949, and it now seeks to recover possession of the tenant's space for its own use. The proceeding is brought under paragraph 1 of subdivision (h) of section 8 of the Business Rent Law (L. 1945, ch. 314, § 8, subd. [h], as added by L. 1946, ch. 273, § 2).
Prior to the amendment (L. 1946, ch. 273, § 2) adding the provisions of subdivision (h) of section 8 to the Business Rent Law the right to institute a proceeding to recover possession of business space was limited to owner-landlords. The owner was, and still is, required to meet the conditions specified in subdivision (d) of section 8. One of the requirements is that he have an interest of at least 50% in the whole investment in the business proposed to be carried on in the space sought.
By the enactment of subdivision (h) the right to maintain such proceedings was extended to certain lessee-landlords. The appellant in this case qualifies under paragraph 1 of subdivision (h). Since the provisions of subdivision (d) circumscribing the right to possession were not repeated in subdivision (h), the question is presented as to whether (d) and (h) are to be read together so as to require a lessee-landlord, seeking possession for its own use, to establish that it has an interest of at least 50% in the investment in the business which it proposes to carry on in the space sought. We think that they should be so read. By enlarging the class of persons authorized to maintain proceedings for the recovery of business space the Legislature did not intend those benefited by the amendment to have greater rights than the owners of the property. We have already so held in a proceeding brought under the provisions of paragraph 2 of subdivision (h) of section 8. ( 224 West 27th Street Corporation v. Lieberman, 272 App. Div. 725.) It must be borne in mind that the purpose of the emergency legislation was to "curb the existing and expected evils of exorbitant rents and widespread evictions" while the shortage of business space continued ( Matter of Fifth Madison Corp. [ New York Tel. Co.], 297 N.Y. 155, 160). The law affords protection to tenants in possession and temporarily suspends the rights of those entitled to possession. Any landlord who institutes a proceeding to recover business space for its own use, seeks to oust a tenant in possession and it therefore must meet the requirements imposed. There is no reasonable basis for distinguishing between a landlord whose right to possession is based upon ownership and one whose right is predicated upon a leasehold. Both seek to enforce their right to possession. Any interpretation which would place a greater burden upon an owner-landlord than upon a lessee-landlord in this respect, would be unreasonable and contrary to the purpose of the law and the intention of the Legislature.
The extent of a landlord's interest in the investment in the business is an evidentiary requirement and need not be specifically alleged in the petition. In this respect an allegation that the space is sought for the landlord's "own immediate and personal use" is sufficient. Such an allegation is contained in the petition in this case. The proof in support thereof establishes that the landlord's interest is greater than the minimum required by the statute. It appears that, except for the portion occupied by the tenant, the entire building is used by the landlord in its business which consists of renting its premises for sporting events, dances, conventions, banquets and the like. It is its sole place of business. The landlord contends that it could improve its business if it had possession of the tenant's space. By this proceeding it seeks to recover possession of such space for the purpose of using it to expand its business. It is, therefore, the sole owner of the business proposed to be carried on in the space sought and consequently has a 100% interest in the investment. The situation between the landlord and his creditors need not be considered.
The question of the landlord's good faith is a question of fact which was submitted to the jury on a proper charge and its verdict in favor of the landlord is amply supported by the evidence.
Accordingly, the determination of the Appellate Term should be reversed, with costs to the appellant, and the final order of the Municipal Court in favor of the landlord reinstated.
PECK, P.J., GLENNON, CALLAHAN and VAN VOORHIS, JJ., concur; SHIENTAG, J., dissents and votes to affirm.
Determination of the Appellate Term reversed, with costs to the appellant and the final order of the Municipal Court in favor of the landlord reinstated. Settle order on notice. [See 277 App. Div. 758. ]