Opinion
March 28, 1950.
Appeal from Supreme Court, New York County, DI FALCO, J.
John Wallis of counsel, Henry Allen Mark with him on the brief ( Mudge, Stern, Williams Tucker, attorneys), for appellant.
Herman Mendes of counsel ( Harold H. Feigin, attorney), for respondents.
Dr. Henry Templeton Smith, owner of an office in a co-operative building belonging to Doctors Owning Corporation, instituted summary proceedings for the recovery from defendants of his office space for his own use. Defendants were statutory tenants of this space when he purchased it, holding in subordination to the former owner. A final dispossess order was made by the Municipal Court on June 2, 1947, which was reversed by the Appellate Term but reinstated by the Appellate Division ( 273 App. Div. 277) and affirmed by the Court of Appeals in June, 1948 ( 298 N.Y. 534). Defendants finally surrendered possession on July 15, 1948.
Plaintiff has brought this action to recover damages for having been unlawfully kept out of possession.
Three principal elements enter into the damages claimed by plaintiff: (1) loss of income from the practice of his profession in his usual manner, due to alleged inability to obtain suitable office space elsewhere, and expenses paid for the use of such quarters as he was able to procure; (2) the excess of the money which plaintiff was obligated to pay and did pay to Doctors Owning Corporation under his agreement with that corporation, over and above what he received from defendants for the use of the premises while defendants remained in possession; and (3) the expense to which he was put for the storage of his office equipment, which would have been kept in the subject space if defendants had not unlawfully occupied it.
The Trial Justice dismissed upon the law plaintiff's cause of action insofar as it was based upon the first two elements of damage enumerated, and submitted to the jury only plaintiff's claim for storage charges for his equipment accruing subsequent to April 30, 1947, in the sum of $283.25. The jury rendered a verdict for plaintiff for that amount, but plaintiff appeals, contending that it was error to have denied him recovery of the other elements of the damage that have been mentioned. Plaintiff also urges that he should have been permitted to recover storage charges for a longer period, dating back to December 17, 1946, when he first demanded and was refused possession of his office space.
The Court of Appeals has held that a tenant of real property, who has been wrongfully kept out of possession, may recover as damages the profits he could have made in his business if he had been permitted to carry it on at the demised premises until the end of his lease ( Snow v. Pulitzer, 142 N.Y. 263). It is assumed that the same rule would apply to a reduction in the earnings of a professional man, if the amount of such reduction could be established to have been the proximate result of his being kept out of possession. In this instance, plaintiff's loss in earnings was more difficult to prove due to his never having practiced at this location, and to his having been out of private practice altogether as an Army doctor from 1941 through May, 1946. Upon resuming private practice after the latter date, he managed to arrange for the use of space successively in the offices of two other physicians. The gross income from his practice has been shown monthly, both before and after he moved into his office in the subject property on or about July 15, 1948. These figures indicate that he earned less in August, 1948, than in the same month of the preceding year, but that he did earn considerably more during each of the succeeding months of September, 1948, through March, 1949, than in the corresponding month of the previous year. On the other hand, his income during other months since December, 1946, while he was practicing in the offices of other physicians, was equal to or greater than during the months while he was in possession of his own office. It is not clear that ophthalmology, which is plaintiff's specialty, is of a seasonal character, and these figures, standing by themselves, are inconclusive. Testimony was excluded of other physicians, familiar with the practice of this profession in New York City, who had seen the office space in question, that it would have been beneficial to the income of a doctor engaged in that specialty to have had plaintiff's office, instead of being compelled to share facilities with other eye specialists. The objections to the questions addressed to these expert witnesses were properly sustained, but it is not certain that other questions might not have been asked that would have been admissible.
On this record, the damages to plaintiff's practice, claimed to have resulted from his being deprived of his office in this building, are speculative. He had never conducted his practice from that location; he secured space with other doctors in which to conduct his practice while he was kept out of possession by defendants; his monthly average of professional earnings showed no marked increase upon his taking possession; and the difference in what he would have received if he had sent announcements to former patients at an earlier date, by itself, can hardly be measured. The Trial Justice correctly refrained from submitting to the jury any question of fact respecting plaintiff's alleged loss of income, upon the record as it is, and if this were all that there is to this appeal, the judgment would be affirmed.
A new trial is deemed necessary by reason of the exclusion of evidence with respect to what plaintiff was obliged to pay to Doctors Owning Corporation for carrying charges in order to keep this office space available, and the dismissal of plaintiff's claim to loss by reason thereof. These rulings appear to have been made upon the ground that no proof was offered that the rental value of the premises in question was greater than the amount which defendants paid to plaintiff while they remained in possession. That is, of course, the measure of general damages for eviction from real property. On the other hand, a party may recover special damage under special circumstances, arising directly and naturally from the trespass ( Myers v. Sea Beach R. Co., 43 App. Div. 573, affd. 167 N.Y. 581; 1 New York Law of Landlord and Tenant, § 295). It was on this basis that recovery was allowed for profits in Snow v. Pulitzer ( 142 N.Y. 263, supra). We think that special circumstances similarly are present here.
Owing to public emergency due to lack of building resulting in shortage of business and commercial space, the Legislature has enacted emergency rent laws affecting the operation of the economic law of supply and demand between landlord and tenant (L. 1945, chs. 3, 314, as amd.). Owners of space, such as plaintiff, are allowed, however, to remove tenants from premises required in good faith for the owner's immediate and personal use ( Smith v. Feigin, 273 App. Div. 277, affd. 298 N.Y. 534). Unlawfully withholding possession from such an owner may entail a greater loss than can be measured by the rental value thus reduced by statute for the beneficiaries of the emergency rent laws. Defendants were formerly statutory tenants, to be sure, but were held to be trespassers when plaintiff obtained a final dispossess order in the Municipal Court. After that they were no longer entitled to take advantage of a rent which had been held down by the Legislature through an exercise of the police power for the benefit of legitimate statutory tenants.
It may well be that if plaintiff were claiming as damages the full amount of this loss, evidence should have been produced to establish what the reasonable rental value for the demised premises would have been in a free market. Plaintiff, however, is only suing on this branch of the case for the actual expenses which he had to pay for current carrying charges to Doctors Owning Corporation, in excess of the amount which defendants paid to him for the months in question. If defendants had been statutory tenants, plaintiff could have had recourse to the Supreme Court, under section 4 of the Business Rent Law (L. 1945, ch. 314, as amd.), for an increase in the emergency rent to a reasonable rent computed so as to allow plaintiff to recover the costs of maintenance and operation of this space plus a reasonable return on the fair value. Plaintiff could not apply for such a rental against defendants, since they were not statutory tenants but trespassers. Since defendants chose to continue to occupy these premises, in violation of plaintiff's adjudged rights, they cannot be heard to dispute that plaintiff has suffered damage due to their refusal to pay as great an amount for the use of the premises, as would unquestionably have been required of them by the court if they had been legitimate statutory tenants. Defendants are estopped from denying that the value of the use and occupation was at least equal to what plaintiff was required to pay to Doctors Owning Corporation for current charges in order to make the space available.
Under these circumstances, it does not seem that evidence is necessary of the rental value of the demised premises in a free market in the absence of emergency rent laws. Defendants should not be held, however, for anything paid by plaintiff to Doctors Owning Corporation on capital account, such as participation in the amortization of the principal mortgage indebtedness.
It may well be that if plaintiff were to succeed in recovering special damages by reason of loss of income due to damage to his practice resulting from not having his office at this location, any loss due to payment of items for current expenses to Doctors Owning Corporation would be merged in such damage to his practice. No overlapping or double recovery should be allowed.
Plaintiff is not justly aggrieved by the allowance of damages for storage charges for his equipment from April 30, 1947, the date of his last demand for possession, inasmuch as the final order was not entered in the Municipal Court until June 2, 1947, determining that plaintiff's demand for possession for his own use was made in good faith.
The judgment appealed from should be reversed and a new trial granted, with costs to appellant to abide the event.
GLENNON, J.P., COHN, CALLAHAN and SHIENTAG, JJ., concur.
Judgment unanimously reversed and a new trial ordered, with costs to the appellant to abide the event.