160 N.Y.S. 616 | N.Y. App. Div. | 1916
The complaint herein sets forth that about June 8, 1915, the plaintiff and his copartner, Isidor H. G-ertler (who has assigned
“Fifteenth. The Lessee, party of the second part, has this day deposited with the Lessor, party of the first part, the sum of Six thousand ($6,000) Dollars, as security for the faithful performance of all the .terms, covenants and conditions in the within lease contained; it being expressly understood and agreed that if the Lessee, party of the second part, abandons said premises or is dispossessed therefrom on account of any breach of this lease by the tenant, prior to the expiration of this lease, then and in that event, the said sum of Six thousand ($6,000) Dollars shall belong to the Lessor, party of the first part, as liquidated and stipulated damages in addition to such other damages as the Lessor, party of the first part, may be able to prove; and the parties hereto stipulate to treat said deposit as such liquidated damages because they cannot ascertain the exact amount of damage which the party of the first part would sustain in the event of any breach or violation hereunder. If, however, all the terms, covenants and conditions are fully complied with, then and in that event the said security shall be returned to the Lessee, party of the second part, at the expiration of this lease or its sooner termination, pursuant to the terms of the lease or by consent. The Lessor also agrees to pay interest at the rate of four per cent (4%) per annum on the said deposit, payable to the tenant on the first days of August and February in each year. The tenant shall have, and has, a lien on said premises to secure the repayment of said deposit of Six Thousand ($6,000) Dollars and interest
' Plaintiff and his copartner deposited the $6,000 in question and entered into possession of the premises and it is alleged that they “ duly complied with and performed all the covenants, terms and conditions of the said written agreement on their part to be performed, except that the plaintiff and his copartner, Isidor H. Gertler, have omitted to pay the rent for the month of June, 1915.” It is then alleged that on June 15, 1915, defendant, as landlord, instituted summary proceedings for the removal of the plaintiff and his copartner from the leased premises for non-payment of the rent for June, 1915, amounting to $1,083.73 (being the first month’s rent due under the lease) and a precept was 'duly served upon the tenants requiring them to remove from said premises or show cause why possession thereof should not be delivered to the landlord, which proceedings ended in judgment in favor of the landlord for the removal of the plaintiff- and his copartner as tenants from the premises described in the lease, and a warrant was duly issued and executed and plaintiff and his copartner removed from the demised premises and the landlord entered into possession thereof.
The plaintiff’s complaint then sets forth two paragraphs stating conclusions of law; first, that the lease was canceled and annulled by the summary proceedings, except that the defendant as landlord was entitled to receive the rent for the month of June; and, second, that the conditions of the lease set forth in paragraph 15 thereof, hereinbefore quoted, are null and void because they were contrary to law and public policy, and amount to a forfeiture and did not constitute liquidated damages, but are in truth a forfeiture and penalty. It is then alleged that the plaintiff and his copartner were entitled to the return of $5,104.17, which has not been paid over to them although demanded.
The provision that a sum certain should be retained as liquidated damages was before the court in Feyer v. Reiss (154 App. Div. 272), where the language used in the clause then under consideration was so similar to that employed in the lease in question as to indicate that the former lease had furnished the model for the particular clause in this one. In that case the provision read as follows: “ It being expressly understood and agreed that if the lessees surrender the said premises or are dispossessed therefrom prior to the expiration of this lease in 1914, then and in that event the said eight hundred ($800) dollars, together with any subsequent installments which shall be paid by the lessees as hereinbefore provided, shall belong to the lessor as liquidated and stipulated damages, and the parties hereto agree to stipulate such deposit as liquidated damages because they cannot ascertain the exact amount of damage which the lessor would sustain in the event of any breach or violation hereunder.” In that case the deposit was $800 and the further sum of $516 was to he deposited in monthly installments. The lease was for three years at an annual rental of nearly $8,000. The court (at p. 275) said that the terms of the instrument disclosed that the intention of the parties was that this deposit was for liquidated damages; that “we have not only the formal expression ‘ liquidated damages,’ but the affirmative provision in amplification and explanation that the parties have agreed that the deposit is liquidated damages ‘ because they cannot ascer
There is an element in this case which is present in neither the Feinsot nor the Feyer case, and that is that besides providing that the $6,000 should be retained by the landlord as liquidated damages, it is further provided that he shall have in addition “ such other damages as the Lessor, party of the first part, may be able to prove.” This would apparently indicate that besides his actual damage the landlord was to retain possession of the $6,000 as a penalty, for it would seem that the difference between the rent reserved and that received by the landlord for the balance of the term, together with any payments made by him for water taxes and fire insurance or other charges covered by the lease, would be the element of his damage which should be susceptible of proof. I should, therefore, deem this case to come within the scope of the Feinsot rather than the Feyer case, were it not that there are further covenants upon the part of the tenants in the lease in question which were not present in the Feinsot case and which in my opinion make it impossible for the plaintiff to establish his
Under the lease in question the tenants bound themselves, in addition to the rental of the premises, to the following payments, briefly stated. By the 2d paragraph of the lease they agreed to pay all Croton water charges during the term of the lease and to pay premiums on policies of fire insurance, to an amount not exceeding $300 per year. By the 3d paragraph they agreed to pay all costs and expenses for the maintenance of the building and repairs therein and to make all repairs, both interior and exterior, during the term of the lease that might be necessary to preserve them in good order and condition and equal to the original workmanship upon the building. By the Yth paragraph they agreed to pay all sums necessary to permit the operation of the premises as a moving picture theatre. By the 8th paragraph they agreed to comply with all rules, orders, ordinances and regulations of all city and State authorities, departments, bureaus and boards at their own expense and to comply with all similar rules and regulations of'the Hew York board of fire underwriters for the prevention of fires, and not to create or permit any nuisance on the leased premises. By the 11th paragraph they agreed to deliver up the building at the end of the term in as good order and condition as it was when leased, and to replace, keep and maintain in good order and condition every part of the premises, interior and exterior, including machines, electric signs, lighting fixtures, lamps, carpets and all the property belonging to the lessor therein. By the 12th paragraph they agreed that in case of the non-payment of rent or any default in any of the covenants or agreements of the lease the lessor
The 15th paragraph shows that the deposit was made as security for the faithful performance of all the terms, covenants and conditions of the lease.
Disregarding the absolute right of the defendant to retain all of said deposit on the ground that the agreement therefor created a penalty and forfeiture and not liquidated damages, the deposit would still be rightfully retained by the defendant until the expiration of the original term of the lease to protect it against any actual damage it might sustain by reason of any breach of the covenants upon the part of the lessees heretofore quoted, all of which constituted a valid agreement on their part to pay the damages, if any, sustained by the landlord, which covenants survived the extinguishment of the relation of landlord and tenant. The plaintiff, therefore, cannot maintain his action to recover back this deposit until the expiration of the period of the lease, unless every contingency under which the defendant might have had a claim for damages against said fund has been exhausted. (See opinion of Mr. Justice Page in Blumberg v. Corday, N. Y. L. J. June 11, 1915; affd., without opinion, 171 App. Div. 906.)
The order appealed from will, therefore, be affirmed, with ten dollars costs and disbursements.
Laughlin, Page and Davis, JJ., concurred; Clarke, P. J., dissented.
Order affirmed, with ten dollars costs and disbursements.
See Laws of 1846, chap. 374, § 3.— [Rep.