Gillette Bros., Inc., Appellant v. the Aristocrat Restaurant, Inc., Respondent

Summary

The New York Court of Appeals held that the lease’s bankruptcy termination clause applies only to the original lessees, the Gillette brothers, and not to subsequent assignees, so the landlord’s notice of termination based on the plaintiff’s bankruptcy was ineffective and the trial court’s judgment was affirmed, reversing the Appellate Division. The Court reasoned that the lease consistently uses “tenant” to refer to the original lessees and that covenants running with the land cease upon assignment, leaving no liability for rent. Justice McLaughlin dissented, arguing that “tenant” should include any lawful occupant and that the landlord could terminate upon any tenant’s bankruptcy.