Senrow Concessions, Inc. v. Shelton Properties, Inc.
Senrow Concessions, Inc. v. Shelton Properties, Inc.
Opinion of the Court
The principal issue in this case involves the construction and effect of agreements between plaintiff-appellant, Proser Enterprises, Inc., and Shelton Properties, Inc.
In 1955 Shelton Properties, Inc., was the major lessee of the Hotel Shelton in Manhattan for a term to expire May 31, 1972. In January, 1955 it leased to Proser Enterprises, Inc., certain space to be used by Proser as a night club to be known as the La Vie Room. On February 14, 1955 Proser Enterprises, Inc., entered into an agreement giving plaintiff the exclusive right to operate concessionaire privileges in the night club, as follows: checkroom, toilet facilities, sale of cigars, cigarettes, flowers, novelties, photography of customers, soliciting of car parking and doorman services. The agreement provided that plaintiff was to lend Proser Enterprises $25,000 to be repaid by Proser from the rent paid by plaintiff to Proser for the concession privileges. The rental was to be 50% of the net profits that plaintiff earned from its concession. Proser assigned to plaintiff ‘ ‘ all of the accounts charged at La Vie through the Diners ’ Club, New York City” and all of the accounts “ not charged through the Diners’ Club * * * arising out of the sale of
In January, 1956 Proser’s lease was cancelled and terminated for nonpayment of rent and possession of the night club premises reverted to Shelton Properties, Inc. The plaintiff, following the reversion to Shelton Properties, Inc., made several demands upon Shelton Properties, Inc., to exercise its concession rights because of Shelton Properties’ use of the premises for dancing and public functions, and wrote letters in December, 1956 and February, 1957; but Shelton Properties, Inc., refused to permit plaintiff to exercise any of its claimed concession rights.
On April 14,1957 Shelton Properties, Inc., entered into a contract to sell its major lease for the unexpired term to Shelton Towers Corporation. Paragraph 29 of Schedule I of the contract adverted to plaintiff’s claims by reason of the agreement of February 18, 1955 between plaintiff and Shelton Properties, Inc. Shelton Properties, Inc., agreed in that paragraph to indemnify the purchaser or its assigns against any liability to the plaintiff. The paragraph further provided that nothing contained therein should be deemed to be an intention to admit liability to the plaintiff or an assumption of the plaintiff’s agreement by the purchaser. The ownership of the major lease and the operation of the hotel were transferred through numerous assignments up to the time of the bringing of this action.
Shelton Properties, Inc., had offered, prior to assignment of its lease, to negotiate a new arrangement with plaintiff by letter dated September 12, 1956 but there is no indication that plaintiff was interested. During the period when the premises were used by Shelton Properties, Inc., plaintiff did not institute any
After answering, the respondents moved for summary judgment on the second, third and fourth causes of action. Plaintiff indicated in its opposing papers that it would discontinue the fourth cause of action. Summary judgment was denied at Special Term on the ground that there were triable issues of fact. On appeal the Appellate Division granted summary judgment as to the respondents.
Plaintiff contends that the agreement was not merely a license, but that it was also a lease and easement which ran with the land and was binding upon the assignees of Shelton Properties, Inc., since these assignees had notice of the agreements. It further contends that the respondents and Shelton Properties, Inc., had conspired to destroy the plaintiff’s rights under the agreements, and that the attorneys were liable because “ The overt act or acts of these attorneys in such conspiracy, is the legal advice given by the lawyers to their clients, which was known, or should have been known to such lawyers to be wrong, false, and incorrect ’ ’.
It is clear that the agreement between appellant and Proser Enterprises, Inc., was a license for a concession and not a lease or easement. (See Layton v. Namm & Sons, 275 App. Div. 246, affd. 302 N. Y. 720.) Although it was a grant of an exclusive right to operate various concessions within the proposed establishment, such exclusive right is not a lease. (Hess v. Roberts, 124 App. Div. 328.) Not being a lessee, appellant was a licensee or concessionaire without interest in the realty. (People v. Horowitz, 309 N. Y. 426.) The fact that it loaned Proser Enterprises, Inc., $25,000, which was to be repaid in the form of credit for “ rent ” payments, and the fact that the “ rent ” was to be an equal share of the net proceeds of the concessions indicate that Senrow Concessions, Inc., was a coadventurer with Proser Enterprises, Inc., in the success or failure of the La Vie Boom. Although it is true that Shelton Properties, Inc., in its agreement with appellant guaranteed the continuance of appellant’s rights under its agreement with Proser as long as Shelton
Conceding arguendo appellant’s contention that it has stated a cause of action for prima facie tort for inducing a breach of contract, its affidavit does not state any facts supporting this contention; it only contains conclusions. There is, what is most important, no showing of any fraudulent connection between these parties prior to the breach of the contract by Shelton Properties, Inc., in 1956. Obviously the respondents, in the absence of such facts, cannot be held to be co-conspirators in a breach of contract which had occurred prior to the time they began negotiations to acquire the prime lease.
Although the process of summary judgment may seem to some to be a harsh remedy, the effective administration of justice requires its timely dispensing. A trial may be desirable in every case, but the practicalities of frivolous litigation and court congestion mandate a summary procedure upon the ascertaining that there is no cause of action. ‘ ‘ The fear of depriving a party of his day in court because he says, in his affidavit, things that, if true, would present a question of fact, should not permit him to evade the actualities by merely making these statements.” (Paston, Summary Judgment in New York [1960 Cum. Supp.], p. xviii.)
Accordingly, the judgments of the Appellate Division should be affirmed, with costs.
Dissenting Opinion
The Appellate Division, reversing Special Term, has granted motions made by some of the defendants for summary judgment dismissing the complaint as to those defendants. There are four counts in the complaint. Since the first numbered one runs against nonmoving defendant Shelton Properties, Inc., only and since plaintiff has abandoned its fourth cause of action, our inquiry on this appeal is as to the second and third counts only.
Briefly summarized for present purposes, those two causes of action make these allegations: that in 1955 nonmoving defendant Shelton Properties, Inc., was the lessee of the Shelton Hotel in Manhattan under a lease running until 1972, that nonmoving defendant Proser Enterprises, Inc., had a sublease for night club use of part of the hotel building, that plaintiff made agreements (or one tripartite agreement) with Shelton and Proser whereby plaintiff loaned or advanced $25,000 to Proser to decorate and furnish the night club premises and Proser gave plaintiff a 17-year lease or license or concession (more about this hereafter) to run a cloakroom, restrooms, a photographic darkroom and clothing checkroom and a photography service and other services in the night club and to sell various articles there, and Proser agreed to repay plaintiff its $25,000 from the rent to be paid by the latter for the lease or concession, which rent was to be 50% of plaintiff’s net profits. Defendant Shelton Properties, Inc., lessee of the hotel building which included the night club location, agreed on its part that, if for any reason the night club premises sublet to Proser Enterprises, Inc., should revert to the major lessee Shelton Properties, Inc., and should later be “ leased or operated ” as a night club or restaurant, plaintiff should continue to enjoy in the successor night club or restaurant the same “ rights and privileges ” as had been granted to it by Proser Enterprises, Inc., ‘1 until the balance of the loan of $25,000.00, still due, is paid as set forth in the agreement Respondents in their papers assert that this promise of continuation of plaintiff’s rights in the event of reversion of the night club premises to Shelton Properties, Inc., was to be available in the event only that Shelton Properties, Inc., should itself then operate a night club or restaurant in that part of the building. Such a construction of the promise of Shelton Properties, Inc., is impossible. Its letter of February 18, 1955 contains two
In February, 1955 Proser Enterprises, Inc., after using plaintiff’s $25,000 for decor, furnishings, etc., set up the night club, and plaintiff took over and operated therein the rooms and services contracted to it. In October, 1955, however, Proser Enterprises, Inc., abandoned the premises and closed the night club. In January, 1956 the Proser sublease was cancelled by Shelton Properties, Inc., because of Proser’s nonpayment of rent. Plaintiff was thereafter excluded from the premises and, although the night club rooms were afterwards used by Shelton Properties, Inc., as a banquet room, etc., and are now used by some of the defendants as a night club, plaintiff despite repeated demands made on all concerned has not been allowed to resume its business activities therein.
Though the ultimate questions here are narrow ones, the pleadings, affidavits and briefs are long and complicated. It will be worthwhile, therefore, before summarizing those allegations of the complaint which directly attack respondents, to eliminate at least one area of confusion. Respondents present the case as if the only real question was as to whether plaintiff got from Proser Enterprises, Inc., a lease or a mere license. Plaintiff’s rights, they say, were merely as Proser’s licensee and, therefore, the respective defendants-respondents in taking over (as we shall see) the hotel building, including the night club premises, were under no duty to plaintiff and were not required to “assume” Proser’s obligation to plaintiff (see Panama Realty Co. v. City of New York, 158 App. Div. 726). This was so, they argue, even though they knew of the ‘ ‘ license ’ ’ agreement and knew, too, of the promise of Shelton Properties, Inc., to protect plaintiff’s rights and privileges if the Proser sublease should end and the night club should later be operated by others. As we see it, this is only part of the problem. Plaintiff’s primary position is that it got from Proser not a mere concession or privilege to conduct a business or businesses in
After this digression, we now take up the second and third counts of the complaint as against these respondents. Reading these with other allegations in the affidavits on this motion, we learn that in April and June, 1957, nonmoving defendant Shelton Towers Corporation got from the afore-mentioned major lessee Shelton Properties, Inc., an agreement whereby the latter would sell and transfer the major lease to the former, that the interest of Shelton Properties, Inc., in that agreement just mentioned passed to defendant-respondent Paygat Realty Corp., controlled by individual defendants-respondents Mayer, Greer, Wells and Wells, to whom Faygat then transferred its interest in the agreement with Shelton Properties, Inc., that the latter then conveyed the major lease itself to nonrespondent defendant Shelton Towers Corporation which transferred the major lease of the hotel building to individual defendants-respondents Wells et al., who in turn sublet the hotel to nonrespondent defendants Bressler, Glass and Luxemburg (known as “ Shelton Tower Associates ”) and defendant Shelton Towers Corpo
The first question is: did plaintiff’s agreement with Proser constitute a lease ? The words “ license ” and “ licensee ” are used therein and the word “ lease ” is not, but even a document which calls itself a “ license ” may be in law a lease of real property if it grants a right to use and occupy land (Greenwood Lake & Port Jervis R. R. Co. v. New York & Greenwood Lake R. R. Co., 134 N. Y. 435). A license, strictly speaking, is no more
Such decisions as Layton v. Namm & Sons (302 N. Y. 720), People v. Horowitz (309 N. Y. 426) and Kaypar Corp. v. Fosterport Realty Corp. (272 App. Div. 878, motion for leave to appeal den. 297 N. Y. 1036) are not controlling of this question of “ lease ” or “ license ” since in each of those cases the question was whether the parties were in landlord-tenant relationships Avithin the meaning of certain statutes.
There is a subsidiary question as to whether plaintiff, authorized by its agreement with Proser to use other parts of the night club in carrying on other parts of its concession business, thereby acquired an easement (see Clark v. Devoe, 124 N. Y. 120).
The judgments should be reversed and the motion for summary judgment denied, with costs.
Judges Dye, Fuld and Van Voorhis concur with Judge Burke ; Judge Foster concurs for affirmance only as to the second cause of action; Chief Judge Desmond dissents in an opinion in which Judge Froessel concurs and in which Judge Foster concurs for reversal as to the third cause of action only.
Judgments affirmed.
Reference
- Full Case Name
- Senrow Concessions, Inc., Appellant, v. Shelton Properties, Inc., Et Al., Defendants, and Jules Mayer Et Al., Individually and as Copartners Doing Business Under the Name of Shelton Building Co., Et Al., Respondents
- Cited By
- 14 cases
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- Published