2525-7th Ave. Corp. v. Knight

Martin, P. J. The landlord-appellant instituted summary proceedings against the tenant-respondent in the Municipal Court, Borough of Manhattan, Tenth District. The tenant-respondent interposed a counterclaim in the sum of $2,000 for personal injuries due to alleged negligence of the landlord-appellant. Judgment was rendered in favor of the landlord-appellant for $104 and in favor of the tenant-respondent on her counterclaim for $1,200. The sole question presented on this appeal is whether the Municipal Court has jurisdiction to award judgment on a counterclaim in summary proceedings in excess of $1,000, exclusive of interest and costs. The Municipal Court has jurisdiction in a summary proceeding to recover possession of real property ■ situated wholly or partly within the district where the application is made. (Mun. Ct. [734] Code, § 6, subd. 2.) As an incident of that jurisdiction it may, in accordance with the provisions of section 1425 of the Civil Practice Act, award judgment for rent in an unlimited amount. (Matter of Byrne v. Padden, 248 N. Y. 243.) In the latter case it was stated that an inferior or local court having once obtained jurisdiction may dispose of the entire dispute between the parties unless prohibited by Constitution or statute. Prior to 1915 a defendant sued in the Municipal Court could interpose a counterclaim in excess of $1,000 and, if successful, judgment would be entered for the jurisdictional limit of the court with the right to bring an action for the difference between the limit of the court's jurisdiction and the sum claimed, unless, of course, the judgment of the Municipal Court stated that it was for the whole of the amount found to be due. This was changed in 1915 by the adoption of the Municipal Court Code containing section 86 in its present form (Laws of 1915, chap. 279). In Silberstein v. Begun (232 N. Y. 319) the plaintiffs took the position that section 86 did not change the right to recover the balance on a counterclaim asserted in a Municipal Court action. In holding that section 86 was intended to limit the recovery on a counterclaim in the Municipal Court to the sum of $1,000 and to prevent the maintenance of an action to recover the balance, Judge McLaughlin, writing for the court, said: “ It would be an unreasonable and forced construction to hold otherwise, when section 86 is read and construed with section 157. Unless this be the true construction, nothing was accomplished by the substitution, and such a result cannot be imputed to the Legislature. “ It is also suggested if such construction be put upon section 86 it does an injustice to the defendants; that they bad a counterclaim in excess of $1,000, which excess they are deprived of recovering, simply because they used it in opposition to the plaintiffs' claim and to the extent of the court’s jurisdiction. If the use thus made of the counterclaim results in doing them ah injustice, it is due solely to their own act, since it was optional with them whether they would there use it or not. If they had not there used it, then they could have maintained an independent action to recover the entire amount of the counterclaim. (Brown v. Gallaudet, 80 N. Y. 413; Dunham v. Bower, 77 N. Y. 76; Gillespie v. Torrance, 25 N. Y. 306, 310.) They could not, however, use the counterclaim as they did in the Municipal Court to the extent that it had jurisdiction and then maintain an independent action to recover the balance. [735] This could not be done because the counterclaim constituted one indivisible claim upon which but one cause of action could be maintained.” We are mindful of the fact that the case of Silberstein v. Begun (supra) was decided prior to the 1924 amendment of section 1425 of the Civil Practice Act, pursuant to which a court having jurisdiction in summary proceedings may enter judgment for rent. As we read the amendment there is nothing to indicate an intention to effect an enlargement of jurisdiction as to counterclaims interposed in summary proceedings. As to counterclaims, section 86 of the Municipal Court Code provides: ‘‘'A counterclaim may be interposed and judgment thereon in favor of the defendant may be rendered for any sum not to exceed one thousand dollars exclusive of interest and costs.” It is urged that this section refers to actions only, and has no application to summary proceedings. We find nothing in the section or in the act itself to justify such an interpretation. The jurisdiction of the Municipal Court, in so far as counterclaims are concerned, has, therefore, been limited by the Legislature to $1,000, exclusive of interest and costs, and the court may not entertain a claim in excess thereof, whether asserted in a summary proceeding or otherwise. In the case of Matter of Byrne v. Padden (supra) the Court of Appeals, speaking of limitations, said: “ These limitations placed upon the jurisdiction of inferior courts are not upon the theory that they are incapable of dealing with larger sums. Their power ordinarily depends upon the amount claimed in the complaint. If it asks more than the sum prescribed, no jurisdiction attaches. It may not act. No subsequent amendment will confer what has never been acquired. But since jurisdiction exists it is not lost because far more than the specified sum may be involved. A County Court may grant judgment in any sum on a counterclaim. (Howard Iron Works v. Buffalo Elevating Co., 176 N. Y. 1.) So the Legislature having conferred on County Courts jurisdiction to foreclose a mortgage, and made no limitation as to amount, it may enter a deficiency judgment for whatever is due. (Hawley v. Whalen, 64 Hun, 550.) In Justices Courts a counterclaim may be pleaded and the claim may be tried (Heigle v. Willis, 50 Hun, 588). Except for the Justice Court Act (sec. 264) an appropriate judgment far in excess of $200 might follow.” The Justices’ Courts have jurisdiction in summary proceedings. (Justice Court Act, § 5-a.) Counterclaim jurisdiction is limited to $200. (Justice Court Act, § 264.) Thus it appears that, notwithstanding unlimited jurisdiction as to rent in a summary proceeding, [736] the Court of Appeals was of the opinion that the jurisdiction of the Justices’ Courts on counterclaims is limited. While the expression of its opinion on that question may be regarded as dicta, it is worthy of the utmost respect, and we think, by analogy, it is decisive of the issue before us. We doubt that it was ever intended that a landlord seeking to recover a small sum for rent could be met with a counterclaim in a personal injury action based on the landlord’s negligence, as a result of which he might be faced with a judgment for many thousands of dollars. As a result of allowing such a procedure there would be (1) a preference granted in a personal injury action and (2) the interposition of unjust and unfounded counterclaims in rent cases might cause plaintiff to hesitate about proceeding to collect rent properly due it. The determination of the Appellate Term and the judgment of the Municipal Court should be modified by reducing the judgment on the counterclaim to $1,000, and as so modified affirmed, without costs. Townley and Cohn, JJ., concur; O’Malley and Dore, JJ., dissent and vote to affirm.