
    John H. Ireland, Appellant, v. Henry J. S. Hall, Respondent.
    First Department,
    February 2, 1912.
    Landlord and tenant —estoppel — representation that lease has been assigned — liability for rent — when possession of sub-lessee that of assignee.
    "Where after a corporation had sub-let premises leased by it and after the lessor although consenting to the sub-lease refused to accept the sub-lessee as his tenant, an officer of the corporation informed the lessor that he personally was assignee and owner of the lease, and he continued to collect an increased rental from the sub-lessee, paying the rent to the lessor by his personal, check, he is estopped from denying his personal liability for rent if the lessor has relied upon the representations his prejudice. This is- true although the officer of the corporation was not in fact an assignee of the lease.
    After such representation the defendant must be deemed an assignee in possesssibn, although the premises were occupied by the sub-lessee-and subsequently by its. trustee iu bankruptcy. The possession of the sub-lessee was that of the assignee of the lease.
    Appeal by the plaintiff, John H. Ireland, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Hew York on the 3d day of April, 1911, upon the verdict of a jury, and also from an order entered ia said clerk’s office on the 4th day of April, 1911, denying the plaintiff’s- motion for a new trial made upon the minutes.
    
      Henry H. Man, for the appellant.
    
      Frederick S. Randall, for the respondent.
   Laughlin, J.:

This is- an action by the owner of premises known as 93 Beade street, borough of Manhattan, New York, to recover rent of the premises from the 1st day of March, 1908, to the 1st day of February, 1909, upon the theory that defendant was an assignee of a lease thereof in possession. The premises were leased by the plaintiff to the Edgar A. Wilhelmi Company on the 17th day of January,, 1905, for three years from February first of that year, at a rental of $5,000 for the first year and $5,500 per annum for the balance of the term, payable in equal monthly installments on the first of each month in advance, with a privilege of renewal for two years at a rental of $5,500 per annum, which was duly exercised on November 19, 1906, by Wilhelmi, Hall & Co., the successor to the original lessee. The defendant was vice-president of Wilhelmi, Hall & Co. Wilhelmi, Hall & Co., on the day it exercised the renewal privilege, executed a sub-lease of the premises for the balance of the term to, the New York House Furnishing Goods' Company, to commence January 1, 1907, at a rental, however, of $300 per annum more than that reserved by the plaintiff in the- original lease. The sub-lessee went into possession on the 1st day of January, 1907. At the time'of negotiating this sub-léase, Wilhelmi, Hall & Co. requested the plaintiff to accept the New York House Furnishing Goods Company as the tenant arid tó release it from liability under the lease, which he declined, but he consented to the sub-lease of the premises. By the sub-lease the sub-lessee was obligated to pay the rent to Wilhelmi, Hall & Co., and did pay the first month’s rent to that company, which delivered it all: to the defendant, who sent his personal check to William G..

: Walker’s Sons, the agents of the owner,, and inclosed it with' a-letter in which he informed them, that he was sending it “ asassignee and owner of the léase,,” and requested a receipt in. the name of the owner by them, as agents. This course with, respect to the payment of the rent was continued by the sub- • lessee and by the defendant for thirteen months more, excepting that during this time the sub-lessee paid the rent directly to-the defendant. The receipts given, by the plaintiff’s agents for the rent for January and February, 1907,. recited that it was received from Wilhelmi, Hall & Co. The subsequent receipts recited that the rent was received from H. J. S. Hall for Wilhelmi, Hall & Co., and the receipt for the Croton water rent from June 1, 1906, to May 21, 1907, given in July, 1907, was in the same form. It appears that a few days before, or a few days after the 27th day of December, 1906, a formal "assignment of the lease held by Wilhelmi, Hall & Co., as successor to the original lessee, to the defendant was executed by the president, of the company and delivered to his attorney to obtain the signature of the defendant, and this was subsequently returned by the attorney, who informed the president of the company that the defendant would not sign it; but the attorney was not called as a witness, and the defendant did not testify on this point. It does not appear that it was essential that defendant sign the assignment and the only bearing- his failure to sign it has is on the question as to whether he accepted it. The defendant testified that he collected the rent on a verbal understanding between him and Wilhelmi, Hall & Co., and credited the surplus rent on account of a settlement made between him and the president of said company when the defendant severed his connection with the company by which he became entitled to the rent. The Hew York House Furnishing Goods Company became bankrupt in February, 1908, and failed to pay rent thereafter, and its trustee in bankruptcy took possession and occupied the premises until June, 1908, without paying any rent or making any agreement with respect thereto. When the sub-lessee ceased paying rent, the defendant also ceased paying the plaintiff. In February, 1909, plaintiff instituted dispossess proceedings against the defendant as tenant, for non-payment of the rent. The defendant answered denying that he was a tenant, and thereupon a stipulation was made giving the owner possession without prejudice to the claims of either party with respect to the liability of the defendant to the plaintiff. On April 9, 1907, the defendant on inclosing a check for rent requested plaintiff’s agents to send him a letter from plaintiff, properly witnessed, requesting him to pay the rent to them, and having received no reply thereto, he wrote them drawing attention thereto ten days later. On April 26, 1907¡ defendant wrote plaintiff’s agents, saying that he-.was inclosing; a- letter signed by plaintiff wader date,- of Beeem*. berfifíeen®, requesting’the payment.of the rent-to the-agents; and ashing-them to- have-the letter-witnessed, and returned to: Mm. It does- not- appear to- whom tMs. letter of. plaintiff’s was: addressed, or-when it- was; delivered,, and there) is: no evidence that: any of these communications by defendant to the- plaintiff’s; agents* were answered.- Each month the-plaintiff: sent; a collector to* the' defendantforthe4 rent, and followed, the: matter up persistently when there* was, default in, payment of the rent., Ihe* defendant; always delayed paying' the plaintiff until he received a. cheek fromfhe*sUbdessee-. On December 1% 19QÍ,,in a letter to- plbimiiffs; agents complaining ¡of the: annoyance of having the collector call each* month; and saying that he-would send Ms- check: as, soon as he received a check from, the-sub-lessee; he suggested that plaintiff release- Wiikehni,. Hall <fe Ob., and accept the suh-lessee as the: tenant; but it: does not appear that the: plaintiff took any action, with respect thereto-. After the. abandonment of" the. premises by the trustee in bankruptcy the keys- of the- premises* were left at the defendant’s office* with the manager of the defendant’s firm; but the evidence does not show by whom or definitely the time, although; perhaps, it gives; rise to- the inference, that it was. in the fall of the* same- year;. Ihe evidence also* shows- that when the' plaintiff’s agents subsequently desired te ©Main access* to the-premises for* the purpose of showing- them, to* a prospective tenant, and for the' purpose, of having- plumbing' work done,, the keys- were ©Maihed at the- def endant’b office., and. returned, there. The- defendant testifted that he- was. not aware: that: the: keys1 were in. his; office, until; about ht-ovómber or December; 19'0'S; and that Ms, attorney subsequent!^ returned them, to; the plaintiff:, . During the- month of. February, 196.8; while-the; sub-lessee-was in possession and before*, it failed,, and for-which month the* rent- was* subsequently paid,’one of the. plaintiff’s, agents gave* the*- def endamt to* understand that, he would, be* held" personally for the rent,, and he denied a, personal liability,, but did not disavow Ms former communication to: the effect that he, was assignee, of the* lease; and took no- steps; thereafter; other than as already stated, to surrender1 possession of the premises to-plaintiff. Letters in* the record written, by defendant show that he subsequently wade repeated efforts to rent the premises; and in a letter.written to the president of Wifcehmá, Hall & Co., under date of May 11,1908, referring to the premises in question he said.: “I .am stuck on the building .at 93 Beade Street—have not yet found a tenant. .It .is too bad that I had anything to do with $ .93 Beade 'Street, it was .an expensive proposition. .If you know of anybody who wants that budding, I would thank you for mentioning it.”

The learned trial justice submitted to the juay .as a question of fact whether or not the -defendant was in possession .of the premises for the period for which the plaintiff seeks to recover rent after the trustee in bankruptcy vacated them; and in that connection instructed the jury as matter ¡of lawihatThe defendant was not in possession of the premises while the sub-lessee or -the trustee in bankruptcy occupied them, and that .'actual possession by the defendant was essential to the plaintiff’s Tight to recover, hut that this might he shown by ¡assuming control .and retaining the keys without actually entering .upon-or occupying the premises. Counsel for the plaintiff duly excepted to these parts of the charge. In answer to an inquiry by the jury, The court instructed Them that -the defendant could only he held liable on the ground that he was The assignee ¡of the lease or was estopped from denying that he was such -assignee, .and on the ground that he was in possession, ¡and that plaintiff only seeks to hold him liable as assignee in possession “ and not because of any contractual assumption of the payment of the rent.” Counsel for the plaintiff, in view of this .and -other requests made by the jury, sent to the court from the jury room, requested the court to further instruct them that if plaintiff was justified by defendant’s letter in believing that he was assignee of the lease and acted thereon to his prejudice by refraining from instituting dispossess proceedings, or otherwise taking possession, they might find that -defendant was - estopped from denying that he was assignee, which was declined -on the ground that the jury had not asked for further instructions -on that point. The plaintiff testified that he refrained from taking any steps to regain possession of the premises, relying upon defendant’s letter stating that he was assignee of the lease, which afforded a basis for this request. The court gave the jury general instructions on the question of estoppel presented by the latter and this evidence.

Counsel for the respondent contends, in effect, that the sublease was an assignment of the original lease, and that, therefore, nothing remained which could be assigned to respondent, and that appellant could not have been misled by his letter, as he should have known the legal effect of the sub-lease. The sub-lease, having been for the balance of the term, although at a higher rental, could have been regarded by the appellant as an assignment of the lease. (Stewart v. Long Island R. R. Co., 102 N. Y. 601, 607; Herzig v. Blumenkrohn, 122 App. Div. 756.) The appellant, however, never accepted the sub-lessee as assignee of- the lease, or did anything to release Wilhelmi, Hall ■& Co. Wilhelmi, Hall & Co. manifestly retained an interest in the lease which was capable of assignment. It remained liable to the lessor, and the sub-lessee was obligated to pay the rent to it and on default could have been dispossessed, and it would then have had the right to occupy the premises, or again sub-let them with the consent of the lessor. This interest and right it could assign to the respondent and there is evidence. tending to show that 'it did so, although it is not uncontroverted; but the respondent represented to the, appellant that he was the assignee of the lease, and it is, therefore, not material whether or not such was the fact, provided, as the appellant testified, he relied upon that representation to his prejudice. The learned court erred in holding that the respondent could not be an assignee in possession of the premises during the period the sub-lessee and its trustee in bankruptcy occupied them. If the respondent was the assignee of the lease, the possession of the sub-lessee was his possession.' (Carter v. Hammett, 18 Barb. 608; Landon v. Townshend, 129 N. Y. 166, 178.) The ruling was most prejudicial' to the rights of the appellant, for it left his claim that the respondent was in pos- • session to rest solely on the, evidence with respect to the custody of the keys and efforts to rent the premises after the trustee in bankruptcy vacated them. We are also of opinion that the court should have granted plaintiff’s request to further, instruct the jury with respect to the important question of estoppel.

It follows that the judgment and order should be reversed a.-nrl a new trial granted, with costs to appellant to abide the event.

Ingraham, P. J., McLaughlin, Miller and Dowling, JJ., concurred.

Judgment and order reversed, new trial ordered, costs to appellant to abide event.  