Mutual Life Insurance Co. of New York v. Tailored Woman
Court of Appeals of New York
128 N.E.2d 401 (1955)
Mutual Life Insurance Co. of New York (Mutual) (plaintiff) leased commercial space to Tailored Woman (defendant) under two leases. In accordance with the first lease, Tailored Woman occupied the basement and first through third floors of a building that Mutual owned. The lease provided that Tailored Woman would sell the same or similar merchandise that it had at its previous location, namely furs. The lease provided that Tailored Woman would pay a set rental fee and a percentage of profits from the business. The lease also provided that Tailored Woman would not divert sales from these floors. Tailored Woman then entered into a second lease with Mutual, whereby Mutual agreed to lease the fifth floor of the building to Tailored Woman. This second lease provided that Tailored Woman would pay a set rental fee, but did not require Tailored Woman to pay a percentage of profits. The second lease provided that Tailored Woman could sell women’s merchandise on the fifth floor, without limitation as to the type of merchandise. The second lease provided that the parties agreed that it would not interfere with the first lease. Without notice to Mutual, Tailored Woman moved the portion of its business selling furs to the fifth floor of the building and refused to pay a percentage of profits from those sales. Mutual brought suit seeking the percentage of sales that were due to it under the first lease.
Rule of Law
Holding and Reasoning (Desmond, J.)
Dissent (Burke, J.)