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particular negligence with which defendant is supposed to be charged.

In the prevailing opinion it is said:

“The claim of plaintiff is that, although she was in plain view and manifested her intention of crossing when the truck was 50 feet away, it kept right on and knocked her down."

The same statement might be made if the truck had been only 10 feet away, or, for that matter, 2 feet away! I concede:

"The obligation of the truck driver to have his truck under reasonable control as he approached the crossing," etc.

But there is nothing in the evidence to indicate that he did not have it under reasonable control. A finding to that effect would have to be based on pure speculation. As I analyze the testimony, I cannot see how a finding of negligence on defendant's part can be predicated on other than the disclaimed theory that the mere happening of the accident is proof of defendant's negligence.

The judgment should be reversed, with $30 costs, and complaint dismissed, with costs to appellant.

CENTURY HOLDING CO. v. EBLING BREWING CO. (Supreme Court, Appellate Term, First Department. January 23, 1917.) 1. LANDLORD AND TENANT 208(4)—LIABILITY FOR RENT_COLORABLE As


Where tenant assigned lease to defendant as collateral security, and defendant entered into possession upon tenant's abandonment, and thereafter assigned his interest to a third party, defendant will not be liable for rent, unless his assignment to third party was only colorable.

[Ed. Note.-For other cases, see Landlord and Tenant, Cent. Dig. $ 828 ;



In action to recover rent, evidence held insufficient to justify finding that defendant's assignment of lease was only colorable.

[Ed. Note.-For other cases, see Landlord and Tenant, Cent. Dig. $ 933;



An instruction that a "colorable assignment” of a lease is one where the assignor retained possession of the property and assignment was made to conceal his possession was proper.

[Ed. Note.—For other cases, see Landlord and Tenant, Cent. Dig. $ 943; Dec. Dig. Om 233(4),

For other definitions, see Words and Phrases, First and Second Series, Colorable Assignment.]

Whitaker, J., dissenting.
Appeal from City Court of New York, Trial Term.

Action by the Century Holding Company against the Ebling Brewing Company. Judgment of the City Court for plaintiff, rendered on verdict of jury, and defendant appeals. Reversed, and new trial ordered.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

Argued November term, 1916, before LEHMAN, WHITAKER, and FINCH, JJ.

Eugene Cohn, of New York City (Abraham S. Gilbert and Eugene Cohn, both of New York City, of counsel), for appellant.

Aronson & Salant, of New York City (Louis Salant, of New York City, of counsel), for respondent.

LEHMAN, J. The plaintiff herein has recovered a judgment against the defendant as the assignee of a lease made by it to one Max Schultz. The defendant denied the allegation of the complaint that it was the assignee of the lease, and also alleged affirmatively that its sole interest in the lease was that of a mortgagee, and that it had parted with this interest before the rent for which this action is brought became due.

It appears that on August 20, 1913, the plaintiff leased premises known as 1139 Walker avenue to Max Schultz for a term of five years. The defendant at that time owned a chattel mortgage on the bar fixtures contained in the premises. Schultz apparently assumed payment of the amount of this chattel mortgage, and the defendant loaned him some further money to make repairs and pay the rent for the month of January, 1914, as called for by the lease, which contained a provision that the tenant should enjoy the premises rent free until that time. On the same day that Schultz received the lease he executed and delivered a note to the defendant for the sum of $3,150.70, and simultaneously executed and delivered to the defendant an assignment of the lease “as collateral security to a note for $3,150.70.Schultz thereafter entered into possession of the premises, but after a few days abandoned them. The defendant thereupon sent a watchman to the premises, where the bar fixtures on which it had a chattel mortgage still remained. Thereafter, according to the testimony produced by the plaintiff, the defendant' leased the abandoned premises to several successive parties, who occupied them until April 16th, and the defendant paid the rent by its own checks for the months of February and March, 1914.

There is no question in my mind that the testimony produced by the plaintiff on this point is amply sufficient to allow the jury to find that the defendant entered into the occupation of the premises and exercised complete dominion over them by virtue of the collateral assignment made by Schultz. It is true that this testimony is to some extent contradicted and to some extent explained by the defendant, but the verdict of the jury has conclusively established that the defendant did take possession of the premises after the orig. inal tenant abandoned them. The defendant claims, however, that even though the defendant did take possession under the collateral assignment, he never obtained legal title to the lease, and consequently no privity of estate ever arose between the landlord and himself.

Neither party has cited any case where this question has been directly and necessarily decided by the courts of this state, at least since the time when this state definitely adopted the rule that a mortgage of real property transfers no legal title to the mortgagor. Apparently, however, the text-book writers have assumed that a mortgagee of a lease who takes possession of the leased premises is liable as an assignee of the lease, and this court has in at least two opinions assumed the correctness of the same rule. In the case of Levy v. L. Island Brewery, 26 Misc. Rep. 410, 56 N. Y. Supp. 242, this court, per Leventritt, J., stated:

"In the case at bar the assignment of the lease was expressly stated to be made 'as collateral security for the payment of the loan made by the defendant to Silverman. The plaintiff, to recover, must therefore show that the defendant entered into actual possession of the premises."

The court in that case held that there was no evidence that the defendant did enter into possession of the premises, but it did not dismiss the complaint, and its statement of the law was evidently intended to be binding upon the court below on a new trial. In the subsequent case of Staudt v. Everards Breweries, 70 Misc. Rep. 544, 127 N. Y. Supp. 349, this court, in an opinion written by myself, again announced the same rule in unqualified terms, stating:

"If the defendant entered into the actual occupation of the premises, and assumed control of the fixtures, under the terms of the chattel mortgage, as owner of the chattels therein assigned, then it must be considered the owner of the lease, and the relation of landlord to the assignee of the lease in actual occupation of the premises creates a privity of estate and summary proceedings will lie. In other words, it is immaterial whether or not the assignment of a lease in a chattel mortgage vests title to the lease in the mortgagee before he takes possession under the chattel mortgage, because actual occupation by an assignee is in any event necessary to create the relation of landlord and tenant; and such occupation would, even without foreclosure, vest title in the mortgagee."

In that case, also, the court, however, found that the mortgagee had not actually taken possession of the premises. The defendant now claims that both these cases rest upon the authority of the case of Astor v. Hoyt, 5 Wend. 605, and other early cases, and that these cases have been overruled by subsequent decisions of the Court of Appeals, and especially by the case of Trimm v. Marsh, 54 N. Y. 599, 13 Am. Rep. 623. In the case of Astor v. Hoyt, 5 Wend. 605, the court decided that a mortgagee of a term does not become liable as an assignee unless he takes possession"but if a mortgagee takes possession of the mortgaged premises lawfully, he must be then considered assignee, and the assignee must take the estate cum onere. When the mortgagee takes possession, he then has all the right, title and interest of the mortgagor; then he acquires and the mortgagor loses an estate liable to be sold on execution. He is therefore substituted in tlie place of the mortgagor, who was lessee, and therefore is assignee and liable as such."

I have found no case which squarely overrules this case so far as it applies to mortgages of chattels real, such as a lease; but the case of Trimm v. Marsh, supra, does squarely hold that no such rule applies to a mortgage of the fee of real estate. In that case the court not only held that a mortgagor of real estate had, even after the mortgagee went into possession, an "estate liable to be sold on execution, but the court expressly stated:

"How can the mere possession change the title from the mortgagor to the mortgagee, or in any way diminish the estate of the one or enlarge the estate of the other? Before taking possession the mortgagee had a mere lien upon the real estate pledged for the security of his debt. After possession, he has in his possession the property pledged as his security, the title remaining as it was before."

While perhaps that case overrules the statement, contained in the case of Astor v. Hoyt, that "when the mortgagee takes possession, he then has all the right, title and interest of the mortgagor; then he acquires and the mortgagor loses an estate liable to be sold on execution”-that question need not be decided by us, for it is not determinative of the real question before us, viz. whether a person who receives an assignment of a lease as collateral does not, by operation of law, become the landlord's tenant when he assumes possession of the premises under his collateral assignment. He does become liable as assignee, if there is a privity of estate between himself and the landlord, and that privity exists where he enters possession under a lease in place of the original tenant. There may be a privity of estate between the landlord and a new tenant, even though the original tenant may retain certain rights as between himself and the new tenants.

This distinction is clearly pointed out in the case of Stewart v. Long Island R. R. Co., 102 N. Y. 601, 8 N. E. 200, 55 Am. Rep. 844. In that case the court stated:

“Where a lessee of land leases the same land to a third party, the ques. tion has often arisen whether the second lease is in legal effect an assignment of the original lease or a mere sublease. The question has frequently, and probably most generally, arisen between the lessee and his transferee, and much confusion will be avoided by observing the distinction between those cases, and cases where the question has been between the transferee and the original landlord. In the latter class of cases the rule is well settled that if the lessee parts with his whole term or interest as lessee, or makes a lease for a period exceeding his whole term, it will, as to the landlord, amount to an assignment of the lease, and the essence of the instrument as an assignment, so far as the original lessor is concerned, will not be destroyed by its reserving a new rent to the assignor with a power of re-entering for nonpayment, nor by its assuming, by the use of the word 'demise or otherwise, the character of a sublease; and the assignee, so long as he continues to hold the estate, is liable directly to the original lessor on all covenants in the orig. inal lease which run with the land, including the covenant to pay rent. Tay. lor's Landl. & Ten. (7th Ed.) 109; Hicks v. Dowing, 1 Lord Raym. 99; Palm. er v. Edwards, 1 Doug. 187; Smith v. Mapleback, 1 T. R. 441; Porter v, French,

Irish Law R. 514; Parmenter v. Weber, 8 Taunt, 593; Doe v. Bateman, 2 Barn. & Ald. 168; Wallaston v. Hakewell, 3 Scott N, R. 616; Pluck v. Digges, 5 Bligh. (N. S.) 31; Beaumont v. Marquis of Salisbury, 19 Beav. 198; Thorne v. Woolcombe, 3 Barn. & Ald. 586. But as between the original lessee and his lessee or transferee, even though the original lessee demises his whole term, if the parties intend a lease, the relation of landlord and tenant, as to all but strict reversionary rights, will arise between them. The effect, there fore, of a demise by a lessee for a period equal to or exceeding his whole term is to divest him of any reversionary right and render his lessee liable, an assignee, to the original lessor; but at the same time the relation of landlord and tenant is created between the parties to the second demise, if they so intended."

[1] In the present case it seems to me unnecessary now to determine where, as between the assignor and the assignee of the lease, the legal title rests. It is clear that in any event the original tenant has assigned to the defendant his own lease as collateral. The defendant has entered lawfully into the premises by virtue of the assignment, and after entry has a legal right to the possession of the original tenant's entire term, subject only to the right of the original tenant to redeem. The defendant's possession is not that of trespasser, nor that of a subtenant. So far as concerns the landlord, the defendant has taken over the rights of the original tenant under the lease, by virtue of a written assignment, and he is in lawful possession of the estate of the original tenant. He stands in the place of the original tenant and by virtue of the assignment and his own acts a privity of estate has been created between himself and the landlord. So long as that privity of estate continues, he is liable to the landlord for the rent of the premises. It is true, probably, that since this privity of estate rests, not only on the assignment as collateral security, but on the acts of the assignee in taking possession, this privity of estate may be ended without a reassignment in writing by relinquishing the possession to the original assignor or mortgagor. Until, however, the assignee divests himself of his estate by assigning his interest to a third party or by giving up the possession to the original tenant, he is liable for rent accruing during his possession See People v. German Bank, 126 App. Div. 231, 110 N. Y. Supp. 291.

[2] In this case, however, I think that the judgment should be reversed because the defendant has broken the privity of estate by assigning his interest in the premises to a third party. It is true that the jury has found that the assignment was only colorable, and that the defendant still maintained control and possession of the premises; but I do not find sufficient evidence in the record to justify this finding. The defendant showed that when the plaintiff began to claim that the defendant was liable for rent as assignee of the lease, the defendant executed and delivered to one Sudbrink an assignment of the lease, together with the note for which the lease was security. The court charged the jury that they must decide whether"this assignment is colorable and fictitious. In other words, the question is whether it was or was not in reality an assignment; that is, whether it was made in fact according to the intent of the parties only for the purpose of pretending that there was an assignment and with the intent in reality to leave the Ebling Brewing Company in possession and control of the premises."

[3] At the defendant's request the trial justice further charged that:

“A colorable assignment means, not an assignment to avoid liability for rent, but that the assignor retained possession, and that the assignment was made to conceal his possession. In order, therefore, to hold the defendant liable in the face of the assignment to Sudbrink, the jury must find that, when the defendant delivered the said assignment to Sudbrink, it did not intend to accomplish an actual transfer of its interest in the demised premises, but intended to retain such interest, and to conceal the same by making Sudbrink the apparent owner."

The charge of the learned trial justice expresses, I think correctly, the law governing this branch of the case. See Adams v. Koehler Co., 136 App. Div. 623, 121 N. Y. Supp. 390. I cannot, however, find any evidence in the record that the assignment to Sudbrink was colorable

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