Tuesday, December 3, 2013

Goldberg 168-05 Corp. v. Levy case brief

Goldberg 168-05 Corp. v. Levy case brief summary
170 Misc. 292 (1938)

In an original action defendant lessee filed a motion to dismiss plaintiff assignee's complaint for a failure to state facts sufficient to constitute a cause of action. The assignee had filed actions to recover for the alleged breach of a leasehold agreement assigned to the assignee by the original lessor and also charged the lessee and defendant tenant with a conspiracy to reduce the gross income of a business conducted on the leased premises.

The tenant promised to pay rental in part measured by a percentage of gross receipts of the business. The assignee alleged that the lessee and the tenant, although obligated to do so, had failed and refused to act in a fair and proper manner with relation to their obligations under the terms of the lease. The assignee claimed that the lessee and the tenant had negligently or willfully permitted the business to become mismanaged and negligently or willfully diverted the proper channels of trade from the business to another store.


  • The court held that: 
  • (1) although the parties' promise was lacking, the whole writing was "instinct with an obligation" imperfectly expressed; 
  • (2) by the tenant's agreement he had promised to use reasonable efforts to bring profits into existence; 
  • (3) the tenant could not avoid liability under the lease by abandoning the premises or by the diversion of business to another store that he operated in the same vicinity; and 
  • (4) because the tenant occupied the premises with the knowledge and consent of the landlord and the assignor there was a presumption that the lease was assigned to the one in occupation. 
  • Accordingly, the court denied the lessee's motion.

The court denied the lessee's motion to dismiss the assignee's complaint for the failure to state facts sufficient to constitute the cause of action, except as to the first cause of action pleaded against the tenant, which was dismissed for insufficiency.

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