Feinsot v. Burstein — 82 Misc. 429

Majority

p. 429

Morris Feinsot and Joseph Wolinsky, Appellants, v. Maurice J. Burstein, Respondent.

(Supreme Court, Appellate Term, First Department,

November, 1913.)

Headnote

Landlord and tenant — provisions of lease — deposit of security for faithful performance of covenants — dispossession for nonpayment of rent.

A provision of a lease that a sum deposited as security for the tenants’ faithful performance of their covenants shall be returned by the landlord upon the termination of the lease applies only where the tenants remain in undisturbed possession of the premises for the full term, and does not limit their rights where they are dispossessed for nonpayment of rent.

p. 430

Appeal by plaintiffs from a judgment of the City .Court of the city of New York dismissing the complaint upon the merits.

Herman B. G-oodstein, for appellants.

- Charles Burstein, for respondent.

The only issue involved in this appeal is whether a clause in a lease providing for a deposit of $2,000 as security, and speaking of the same as liquidated damages, shall be construed as constituting such sum liquidated damages in the technical sense of the word, or as a penalty. It was held on a previous appeal to this court ( 78 Misc. Rep. 259 ) that, so far as the terms of the lease itself were concerned, the sum was deposited as a penalty, and the court granted a new trial in order that the surrounding circumstances might be examined to ascertáin whether their effect would be to modify this view.

An examination of the case reveals no surrounding circumstances material to this controversy or otherwise, nor are any pointed out in the brief of respondent, nor in the opinion of the learned trial judge below.

There has been raised for the first time on this appeal a new point, namely, that inasmuch as the lease provides that the landlord - shall return the $2,000, “ upon the termination of this lease at the end of the term aforesaid ’ ’— referring to the full term thereof — and as this lease has expired because plaintiff-tenants were dispossessed during the term of the lease for nonpayment of rent, this action is premature. It seems to me that a fair construction of the lease limits the application of the clause referred to, to the case where the plaintiff remains undisturbed in possession of the premises until the end of the term, and was not

p. 431

intended to limit the rights of the plaintiffs in a contingency such as the one that happened. Indeed, since the lease terminated upon the final order in the dispossess proceedings, the contractual relations of the parties ended under the very terms of this lease, and the $2,000 is held by the defendant upon no condition whatsoever except as security for so much of the rent as was then unpaid. See Caesar v. Rubinson, 174 N. Y. 492 , 498; Michaels v. Fishel, 169 id. 381, 391.

Inasmuch as the judge below wisely permitted the issues of fact to go to the jury, which determined them in favor of plaintiffs, and reserved until after the coming in of the verdict his decision on the questions of law involved in the motion for a dismissal of the complaint, the judgment is reversed, with costs, and the verdict of the jury reinstated.

Seabury- and Guy, JJ., concur.

Judgment reversed, with costs, and verdict reinstated.

Cases cited

Feinsot v. Burstein 78 Misc. Rep. 259 N.Y. App. Term 1912-11-12 p. 430
Caesar v. Rubinson 174 N. Y. 492 N.Y. 1903-04-28 at 498 p. 431