Rosenwasser v. Amusement Enterprises, Inc.

an agent, employe or servant who without the knowledge and consent of his principal, employer or master, requests or accepts a gift or gratuity or a promise to make a gift or to do an act beneficial to himself, under an- agreement or with an understanding that he shall act in any particular manner to his principal’s, employer’s or master’s business; or an agent, employe or servant, who, being authorized to procure materials, supplies or other articles either by purchase or contract for his principal, employer or master, or to employ service or labor for his principal, employer or master, received directly or indirectly, for himself or for another, a commission, discount or bonus from the person who makes such sale or contract, or furnishes such materials, supplies or other articles, or from a person who renders such service or labor; and any person who gives or offers such an agent, employs or servant such commission, discount or bonus shall be guilty of a misdemeanor, and shall be punished by a fine of not less than ten dollars nor more than five hundred dollars, or by such fine and by imprisonment for not more than one year.’’

The lease and guaranty were received in evidence. The lease was of an open air moving picture theater in New York City. The term was from May 1, 1913, and ending November 1, 1914, at a rental of $1,600, to be paid in various installments at various times during the term. The lease provided that $150 should be paid June 1, 1913, and $150 on July 1, 1913. It is for the nonpayment of these installments the action is brought.

[1] There is no question that the defendant John J. Lyons guaranteed the rent. It is true that they allege that he executed the guaranty a day before the lease was signed. This, however, is immaterial. The guaranty and lease were delivered simultaneously.

We will take up the defenses in the order in which they are stated.

[2] The first defense absolutely failed for want of evidence to sustain it. The alleged false representations consisted of an alleged statement, made by plaintiffs’ agent and counsel, who had all to do with the negotiations, to Maurice Frank, an agent of defendant, that another person was negotiating for the premises, and “that plaintiffs’. owner had made, in the summer season of 1911 and 1912, $1,500 each season,” and an alleged statement to Mr. Solomon, an officer of the defendant, as follows:

“We have got a party who wants to take it for the same rental we are offering you, but I prefer you.” “You seem to be responsible people.” “I asked him how long he ran it. He said they ran in 1911 and 1912, and made about $1,500.”

Even conceding that all this was said to the defendant, and that these representations were made, and that they were of such a character, if false, as to constitute fraud, there is no evidence that they were false, except that Mr. Solomon testified that the defendant ran the theater for one summer at a certain loss, giving the figures. This testimony did not tend to prove the falsity of the representations, was improper, and was admitted over plaintiffs’ objection.

The defendant practically concedes that they failed to substantiate ' the defense of fraud, and seriously advanced the novel argument that the failure of proof was owing to the plaintiffs’ failing to furnish the evidence; therefore the failure should be excused by the court.

[3] Concerning the second defense, the defendants have failed to establish it by a fair preponderance of evidence. They have not shown

[4] There is no evidence of a surrender of the premises to the plaintiffs. The mere fact that the person to whom the defendant claims to have sublet the premises paid rent to plaintiffs does not establish a surrender. The defendant could not thus force a new tenant on the owner and himself escape the payment of rent. A subletting would not discharge the original lessee from liability for the rent. See Ettlinger. v. Kruger, 146 App. Div. 824 , 131 N. Y. Supp. 436 . Moreover, when the receipt was given for the first rent paid by the sublessee, the plaintiffs expressly provided in that receipt that the acceptance of the rent from the new tenant should not be considered as a waiver of any rights plaintiffs had against original lessee, the defendant; and this receipt was given to Frank, the agent of defendant, who was-also the sublessee or assignee of the original lease from plaintiffs to defendant. If there ever was such a lease, none has been produced.

[5] It is sought by defendant to establish by inference that the subletting was a benefit to the plaintiffs, and therefore a consideration for the alleged promise to release. As matter of fact, the defendant got a bonus of $350 for the sublease. This certainly was not a benefit to plaintiffs.

[6,7] The third defense is also unproved. It will be observed, by reading the section of the Code above set forth, that “intent” to influence the action of the employé must be shown, and defendants have absolutely failed to show any such “intent.” Maurice Frank was the agent of defendant, to whom it is claimed plaintiffs criminally paid $100 to influence. Defendant’s representative testified that he first called upon the owners of the property in reference to the lease, and .was informed by them that Mr. Kraushaar was their attorney and agent, and had full power in the matter, whereupon Mr. Frank called upon Mr. Kraushaar. Mr. Frank stated to Mr. Kraushaar that he (Mr. Frank) was a “broker.” Mr. Kraushaar testified that he never saw Frank before, knew nothing about him, and did not know that he was employed by the defendant. This is not denied, except by Frank, who stated that he told Mr. Kraushaar that he represented the defendant.

Taking the evidence of the defendants’ witnesses, which was given for the special purpose of sustaining this defense, it requires a forced and base construction of it to warrant the inference that Kraushaar was moved by guilty intent. This statute should be strictly construed. A too liberal construction would make it a most dangerous one. The honest merchant might readily become the innocent victim of dishonest employers and employés. The simple exercise of an honest and generous impulse, induced, perhaps, by false representations, might result in great injustice and most serious consequences. In order, therefore, to bring a case fairly within the provisions of this section, the evidence should be preponderating, clear, and of a most satisfactory character.

[8] Admitting, however, that Kraushaar was moved by a guilty intent, and actually violated the above section of the Penal Law, this would be no defense to an action for rent, where the tenants continue in actual and beneficial possession of the property. Fraud in inducing a tenant to take a lease is not a defense in an action for rent, so long as the tenant remains in possession, of the leased property. Property may not be retained and enjoyed, and payment of the stipulated rental refused, on the plea of fraudulent practices, or because of the immoral conduct of the owner prior to making the lease. The tenant has ample remedies, but the refusal to pay rent while continuing in possession is not one of them. Vail v. Reynolds, 118 N. Y. 302 , 23 N. E. 301 ; Baar v. N. Y., L. E. & W. R. Co., 125 N. Y. 263 , 26 N. E. 145 .

From an examination of the entire record, we are of the opinion that none of.the defenses has been sustained. The judgment should therefore be reversed, and judgment ordered for plaintiffs for the sum of $300, with interest from July 1, 1914, with costs in this court and in the Municipal Court. All concur.