Opinion
No. 183.
December 9, 1929.
Appeal from the District Court of the United States for the Southern District of New York.
Abatement proceedings by the United States against Joseph Radice, sublessee of the premises sought to be abated, 154 West 14th Street Co., Inc., lessor, George Glendenning, lessee, and another, in which defendant 154 West 14th Street Co., Inc., filed a cross-bill for the forfeiture of the Glendenning lease, and defendant Glendenning filed a cross-bill to forfeit the Radice lease. From that part of the decree providing for the forfeiture of his lease, defendant Glendenning appeals. Affirmed.
The appellee, 154 West 14th Street Company, Inc., is the owner of a certain building located at No. 49 Seventh avenue, in the borough of Manhattan, New York. It will hereafter be called the owner. It leased a portion of these premises to the appellant, Glendenning, who sublet a part to Radice. While both of these leases were in force, Radice repeatedly sold intoxicating liquor on the premises leased by him, in violation of the provisions of title 2, section 23, of the National Prohibition Act (27 USCA § 37). The police department notified both the owner and the agent of Glendenning that Radice was violating the law. The first such notice was in July, 1926. Glendenning professed a willingness to co-operate with the police department in whatever action it took, but did nothing more, and when Radice's lease expired allowed him to hold over. The owner notified Glendenning several times, and Glendenning's agent at least twice, to take some action against Radice, but nothing else was done until the following November, when this suit was brought by the government to close the Radice premises under the National Prohibition Act (27 USCA). Then Glendenning answered and filed a cross-bill, seeking to have the Radice tenancy terminated. The owner also answered and filed its cross-bill to secure a forfeiture of the Glendenning lease. Both cross-bills were based on title 27, section 37, USCA (National Prohibition Act), which provides that "Any violation of this chapter * * * by the lessee or occupant thereof shall, at the option of the lessor, work a forfeiture of the lease."
Radice did not answer. A decree was entered, closing the Radice premises for one year, and forfeiting the Glendenning lease. Glendenning alone appealed, and only from that part of the decree providing for the forfeiture of his lease.
Frederick Durgan, of New York City, for appellant.
Brill, Bergenfeld Brill, of New York City (Sanford H. Cohen, of New York City, of counsel), for appellee 154 West 14th Street Co., Inc.
Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
Glendenning does not, and cannot, after United States v. Duignan (C.C.A.) 4 F.2d 983, affirmed Duignan v. United States, 274 U.S. 195, 47 S. Ct. 566, 71 L. Ed. 996, and United States v. Gaffney et al. (C.C.A.) 10 F.2d 694, deny the power to decree the lease forfeited, but bases his appeal on the ground that the owner, in filing its cross-bill for a forfeiture, did not come into equity with clean hands. The only possible basis for such a claim lies in the fact that from the time the owner had notice that Radice was violating the law it did nothing more than notify its lessee, Glendenning, and his agent, that Glendenning must act to prevent further violations by his tenant.
The Radice premises were "leased premises," within the meaning of title 27, section 37, USCA both under the owner's lease to Glendenning and under Glendenning's lease to Radice. Any violation of the prohibition law thereon by Radice was a violation by the "lessee" as to Glendenning, and at least violation by an "occupant" as to the owner. The same causes of action these parties asserted in their cross-bills in this suit were available to them when Radice first violated the law, for both were "lessors." One violation by Radice was enough to make the statute applicable. Burke v. Bryant, 283 Pa. 114, 128 A. 821.
Neither the owner nor Glendenning had anything to do with the unlawful business of Radice, except as lessors who took no legal action to terminate the respective leases they had given, after notice of Radice's wrongdoing. The notice the owner gave Glendenning, however, was effective to forestall any idea Glendenning may otherwise have had that the owner assumed a complacent attitude toward the conduct of Radice. Thereafter, if not before, Glendenning had reason to believe that the duration of his lease was imperiled by the unlawful acts of his tenant. The delay of the owner to assert its right under the National Prohibition Act in no way misled or harmed Glendenning. On the contrary, he had ample warning of the attitude of the owner, and adequate opportunity to protect his lease, by taking steps to rid the property of a liquor nuisance maintained by his own tenant. Having elected to take no action, he has invited the consequences. In giving him more than enough time, perhaps, to correct conditions on the premises, the owner was guilty of no inequitable conduct, which would call into play the far-reaching maxim that "he who comes in equity must do so with clean hands."
Decree affirmed.