222 N.Y. 386 (1918)
A covenant in a lease allowing the landlord to re-enter the premises upon the tenant’s default and re-let them at the tenant’s expense, holding the tenant liable for any deficiency, applies only to a common-law re-entry (i.e., ejectment) and not to a dispossessory proceeding.
Summary
This case concerns a dispute between a landlord (Sanford) and tenant (Cornwell). The lease allowed the landlord to re-enter and re-let the premises if the tenant defaulted, holding the tenant liable for any deficiency. After the tenant was dispossessed via summary proceedings for non-payment of rent, the tenant’s assignee sued to recover a security deposit, while the landlord counterclaimed for the rent deficiency. The court held that the “re-entry” clause in the lease only applied to a common-law re-entry (ejectment), not statutory dispossession, so the landlord couldn’t recover the deficiency. The tenant was entitled to the return of the security deposit, less the rent owed before dispossession, as the lease was fulfilled to that extent.
Facts
The lessors (Sanford) leased premises to the lessee (Cornwell) for a term of years. The lease contained a clause allowing the lessors to re-enter the premises upon any default in rent payment or other covenants. Furthermore, the lease stipulated that upon any such re-entry, the lessors could re-let the premises as agents of the lessee, applying the rent received to cover the lessee’s debt and holding the lessee liable for any deficiency. The lease also stipulated that the lessee deposited money as collateral for the last two months’ rent. The lessee defaulted on rent payments.
Procedural History
The lessors initiated summary proceedings in court and were awarded possession of the premises due to the lessee’s non-payment of rent. The lessee was dispossessed via warrant. The lessors re-let the premises at a lower rent. The plaintiff, as assignee of the lessee, sued to recover the deposit, less the rent for one month before dispossession. The lessors counterclaimed a deficiency in rent. The trial court directed a verdict for the lessors. The Appellate Division reversed and granted a new trial. The lessors appealed to the New York Court of Appeals.
Issue(s)
Whether the covenant in the lease allowing the lessors to re-enter the premises upon the lessee’s default and re-let them as the lessee’s agents, holding the lessee liable for any deficiency, applies to a removal of the lessee via statutory summary proceedings, or only to a common-law re-entry by ejectment.
Holding
No, because the term “re-enter” in the lease referred only to a common-law re-entry by ejectment, and not to the recovery of possession through statutory summary proceedings.
Court’s Reasoning
The court reasoned that “re-entry” is a technical term with a specific meaning at common law: the resumption of possession by the lessor through an action of ejectment, based on a right reserved in the lease. The court emphasized the historical context of re-entry, tracing its origins to feudal law and its evolution. It highlighted that, absent an express reservation in the lease, a lessor’s remedy is limited to an action on the covenant. The court found that the parties’ use of the term “re-enter” within the lease suggested they intended its strict, common-law meaning. The court noted that other terms such as “removal” and “dispossession” are used in statutes related to summary proceedings, further distinguishing the two concepts. Because the lease specified re-entry, the lessors were not entitled to damages for the deficiency as the lessee’s removal was not the result of a re-entry. The deposit was to be returned to the lessee upon completion of the lease, and the security only applied to rent owed up to the point of dispossession. The court noted, “When the plaintiff was thrown out of possession, the lease was terminated and no more rent could accrue thereunder, but the lessee was not thereby discharged from the payment of rent which had already become due.”