Scott v. Montells — 14 N.Y. St. Rep. 21

Majority

p. 21

John G. Scott, Resp’t, v. Pedro Montells, App’lt.

(Court of Appeals,

Filed March 6, 1888.)

Headnote

1. Landlord and tenant—Deposit to secure payment of sent—Failure TO PAY AND DISPOSSESSION—EFFECT of OVER-DEPOSIT.

Where a tenant made a deposit with the landlord “in lieu of security,’’ and the landlord agreed to “ hold the same as his security for the payment of rent by the tenant,” according to the conditions and provisions of this lease, said security to be paid back to the “tenant” on the full compliance with the provisions of this lease on the part of the “ tenant.” Meld, that the failure of the tenant to pay the rent due under the lease (by reason of which he was by the landlord dispossessed), did not operate to forfeit all her title to the deposit she made with the landlord.

2. Same—Pleading—Counterclaim for damages must be pleaded.

In an action to recover the deposit the landlord could not prove the damages resulting from the tenant’s failure to make certain repairs which she had covenanted to do in the lease, and deduct them from the amount deposited unless he had set them up as a counterclaim.

Appeal from a judgment of the general term of the superior court of the city of Mew York affirming a judg

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ment in favor of plaintiff entered upon a verdict of a jury-directed by the court at a trial term.

The $900 was deposited under the agreement in the lease which reads as follows: “In lieu of security, party of the first part accepts, and the party of the second part agrees to pay to him the sum of $900. The party of the first part to pay interest at the rate of six per cent thereon, and to hold the same as his security for the payment of rent by the party of the second part, according to the conditions and provisions of this lease. Said security to be paid back to the party of the second part on the full compliance with the provisions of this lease on the part of the party of the second part.”

Geo. W. Cotterill, for app’lt; David L. Walter, for resp’t.

do not think that the failure of plaintiff* s assignor to pay the rent due under the lease (by reason of which she was by the landlord dispossessed), operated to forfeit all her title to the deposit she made with the landlord. It was made as security only, and in case of failure on her part to perform, the landlord was not confined to the deposit for a remedy, nor if he did resort to it was he entitled to retain more of it than amounted to his demand against the tenant for damages arising out of the breach.

The cases cited in the opinion attached to the brief of appellant, where owners of real estate had contracted to sell it and had retained partial payments of purchase moneys made to them by vendees who subsequently without just cause refused or failed to fulfill their contracts by taking a conveyance of the land, seems to us to have no application here.

The defendant sought to prove upon the trial of the action that the assignor of plaintiff had left the house in a bad condition, and had not made necessary repairs therein which she had covenanted to do in the lease, and that he had made them himself ata cost of over $400 which he claimed to deduct from the deposit besides the amount of the rent due at the°time the tenant was dispossessed.

The trial court refused to allow the reduction on the ground that the answer contained no counterclaim. The answer did allege the foregoing facts as to the repairs, etc., but did not set them up as a counterclaim, nor did it demand judgment for the amount of his expenditures for repairs, but simply claimed to reduce pro tanto the plaintiff’s own original cause of action.

If the money had been deposited with the landlord as security for the performance of all the .covenants in the lease, it is very probable that there was enough srated in

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the answer to render the evidence of the amount expended ior the repairs admissible, because in such case the facts would not have constituted a counterclaim, but would have gone in diminution of the plaintiff’s right of recovery on her own original cause of action. But we think, from a perusal of the lease itself, that the money was deposited as -security for the payment of the rent only, and not for the performance of the other covenants in the lease. Its purpose is so stated in terms, and the promise to pay it back

on the full compliance with the provisions of this lease,” when taken in connection with the expressed sole purpose of the deposit, must mean a promise to pay it back on the full compliance of the terms as to the payment of the rent. The language of the covenant for making the repairs seems obviously to refer to those repairs which the tenant would be interested in having made, and the provision was one looking to having her instead of her landlord responsible for making them, and the deposit would naturally be neither exacted or given for securing such repairs.

This being the case, evidence of a failure on the part of the tenant to keep some of the covenants contained in the lease for the performance of which the money was not deposited as security, did not go to destroy or diminish the amount of the plaintiff’s cause of action, but simply tended to show a breach of a covenant on the part of the tenant and resulting damage to the landlord, which gave him a cause of action against the tenant to the full amount of •such damage, and this cause of action in order to be available to defendant in the action should have been set up as a counterclaim.

The judgment should be affirmed, with costs.

All concur.