Penn Gardens Section Two v. Melnick

This case presents a novel question: can the transferee of property from a lessor-mortgagor which had assigned its lease as additional security for the performance of the covenants of a mortgage on the leased property recover damages from lessees of the property on the theory that their failure to perform the lease covenants occasioned a foreclosure of the mortgage and the loss of the transferee’s reversionary interest in the property? Since we propose, under the facts before us, to answer this question in the negative, we do not reach a second question relating to the measure of damages.

The…