93 N.Y.S. 783 | N.Y. App. Div. | 1905
The action is brought, to recover the sum of $6,250, the rent; reserved for the month of May, 1904, under a lease of the Gilsey House made on the 29th day of February, 1904, by the plaintiffs, the owners, to the defendant Keen, for the term of seven years and two months from the 1st day of March, 1904, and by him duly
The plaintiffs allege that the lessee entered into possession under the lease, but this is denied in the answer and stands unproved. It is also alleged that the assignee of the lease took possession under the assignment the day the term commenced and occupied the premises during the month in question; and this is admitted. The defendants jointly pleaded as a separeate defense that the execution of the lease and the giving of security therefor was induced by false and fraudulent representations on the part of the plaintiff and their former tenant, acting in concert with them — setting forth the facts in detail — concerning the former tenant’s reason for desiring to surrender his lease, the amount and profitableness of the business done by him, his receipts and running expenses and the then state and value of the business; that it was part of the agreement by which the lease was to be executed that the plaintiffs should purchase of their former tenant the furniture and transfer the same to the defendant Keen for the consideration of $50,000, $25,000 of which w^s to be paid in cash, and notes were to be given for the other half; and that the title to the furniture was to remain in the plaintiffs until paid for and the furniture was to stand as security for the rent and not to be removed from the premises. The defendants also pleaded as part of the same separate defense that it was part of the agreement and understanding with the plaintiffs that a new corporation should be organized with a" capital of $200,000 by the defendant Keen and one Lancaster, to operate both the Gilsey House and the Edgemere Hotel, then under lease to the Sea Beach Improvement Company; that Keen & Lancaster were to procure a lease of the Edgemere Hotel from the latter company, in consideration of the issue of $100,000 of the stock of the new company to the defendant Keen, for the same period for which the lease of the Gilsey House was to be taken and that Keen should assign both leases to the new company; that the lease of the Edgemere Hotel was to be assigned by the new company to the plaintiffs as security for the lease of the Gilsey House; that Lancaster was to become surety to the plaintiffs on the lease to the defendant Keen to the extent of $37,000 and the payment of the notes for one-half the furniture; that the defendant Keen should assign to the new company the
The court having declined to permit the defendants to show the facts set up in this separate answer, the decision can only be sustained, if it would have been correct, had the facts been established. In effect, therefore, the question presented by the appeal is the same as if a demurrer had been interposed to the separate answer and defense as insufficient in law. It is doubtful whether the defendants are in a position to demand a rescission of the lease and other documents and transfers depending thereon, for the assignee of the lease remained in possession, and the offer to surrender possession was not unconditional, but was coupled with a demand for a rescission. It is unnecessary, however,' to determine the sufficiency of the defense in that regard, if otherwise properly pleaded, for the facts are pleaded, not as an equitable counterclaim for a rescission, although a rescission ■ is demanded, but as a separate answer and defense. The plaintiffs were under no obligation to interpose a reply to a separate answer and defense, and they did not; but if the facts had been pleaded as an equitable counterclaim the plaintiffs would, if they did not reply thereto, be deemed to have admitted the same. The rule of law is well settled that facts pleaded as a defense merely may not be used as a counterclaim, even though they would be sufficient as a counterclaim if so pleaded. (Acer v. Hotchkiss, 97 N. Y. 408 ; Rice v. Grange, 131 id. 152.)
The appellants contend, however, that even though the recovery
It" follows, therefore, that the judgment should be affirmed, with costs.
Van Brunt, P. J., Patterson, Ingraham and McLaughlin, JJ., concurred.
Judgment affirmed, with costs.