Tuesday, December 3, 2013

Mutual Life Insurance Co. of New York v. Tailored Woman case brief

Mutual Life Insurance Co. of New York v. Tailored Woman case brief summary
128 N.E.2d 401 (1955)

Plaintiff lessor brought an action against defendant lessee for the payment of additional rent. The trial court found in favor of the lessor. The Appellate Division of the Supreme Court in the First Judicial District (New York) affirmed the judgment but lowered the amount of damages awarded. Both parties appealed.

The lessee, which operated a woman's retail clothing store, entered into an agreement to lease the first three floors of the lessor's building for a flat rent plus a percentage of sales. The parties later agreed to lease a portion of the fifth floor under a flat rate rent. The lessee subsequently moved its fur department to the fifth floor and reconstructed the interior elevators to operate on the first through third and fifth floors. The lessor argued that it was owed additional rent in the form of the sales percentage from the fur sales. The appellate court modified the judgment in favor of the lessor to include the sales percentage only on sales that were referred by sales persons on the first three floors.


  • On appeal, the court held that there was nothing in either lease to forbid the lessee from moving its fur department to the fifth floor. 
  • The court held that sales referred from the lower three floors were sales on, in, or from those floors and that those sales, pursuant to the lease on the first three floors, should have been included in the sales percentage rent for the first three floors.

The court affirmed the judgment from the appellate court, which modified the judgment from the trial court in favor of the lessor to require the lessee to pay as rent a percentage of fur sales on an upper floor which were referred by clerks on the lower three floors.

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