Starling Realty Corp. v. State of New York

In Starling Realty Corp. v. State of New York, (286 NY 272 [1941], rearg denied 286 N.Y. 696 [1941] the State, as the tenant of certain office space, prematurely canceled its lease which contained an executory clause conditioning the State's liability on the availability of money to the Superintendent of Public Works for the leasing of the subject premises. The State had decided to discontinue the office that occupied the rented space and did not, therefore, request any funds for the payment of the lease during the budgetary process. The Court of Appeals affirmed the Court of Claim's dismissal of the landlord's claim for rent finding that the landlord "was made aware, both by its implied knowledge of the law and by an express provision in the lease itself, that the liability of the State for rent reserved for the full term was conditional" (id. at 278). In so holding, the Court noted that "we may not ignore the limitations by which the Legislature has thus restricted the expenditures of public moneys. They are wise and should be enforced. The state has chosen to enact something similar to the statute of frauds for its own protection. Those dealing with it do so knowing this fact and at their own risk.However inequitable the conduct of the state may be, it has said that it shall only be responsible upon one condition' "(id. at 277-278 ).