Crausman v. George G. Graham Construction Co.

Philbin, J. The plaintiff sued to recover part of a sum of money deposited with the defendant as security upon the execution of a lease by the latter to the plaintiff’s assignor. The lease was made for a term of four years and eleven months beginning on the 1st of June, 1915, at a rental of $14,000 per year, payable in semimonthly installments of $583.33 each. It was terminated by summary proceedings on the 1st of November, 1915, when the defendant re-entered and resumed possession. The plaintiff claimed that, having fully complied with the terms of the lease, except as to the payment of the rent due at the time of the summary proceedings, which was agreed upon as being $583.33, he was entitled to the return of the balance of the deposit, amounting to $1,750 and interest. The defendant set up as a separate defense and in diminution and extinguishment of the plaintiff’s claim, that it suffered damages because of depreciation in rental value and the expenditure of certain sums of money made necessary for expenses in the summary proceedings and repairs to the premises. The damages, thus referred to, other than said disbursements, are more definitely stated by the defendant to be the difference between the rent payable under the lease and the rents collected by the defendant from tenants of the premises from the termination of the lease to the date of the bill of particulars; also the difference between the rental reserved under the lease and the reasonable rental value of said premises for which the defendant could rent the same before the expiration of the term fixed in the lease. The clause in relation to the security so given declared that the lessee had deposited with the defendant the sum of $2,333.33 “ as security for the faithful performance of all the terms, covenants and conditions of this lease, it being expressly understood and agreed [610] that, if the tenant fails to perforin any of the covenants and conditions thereof, then and in that event the said deposit of $2,333.33 shall be allowed on all damages sustained by the landlord by reason of such breach. If, however, all terms, covenants and conditions of this lease are fully complied with, then in that event, the said cash security shall be applied as the payment of the last two months’ rent of the term of this lease * * There is nothing in the lease upon which there can be predicated a claim for damages arising after its termination by summary proceedings. The court below, over the objection and exception of plaintiff’s counsel, received testimony relating to the collection of rents after November 1, 1915, when the warrant was executed and to the rental value of the premises as of that day. It is well settled that, in the absence of an express agreement to the contrary, there can be no recovery for damages that accrue after the termination of the lease by summary proceedings. Code Civ. Pro., § 2253; Chaude v. Shepard, 122 N. Y. 397; Michaels v. Fishel, 169 id. 381. The respondent does not make a claim for damages accruing after summary proceedings, but insists that such evidence was admissible to show the damage suffered before the termination of the lease and upon the lessee’s breach; that the evidence of net rental for the subsequent period was introduced to show the diminished rental value, as was also the testimony of the real estate expert. It is further asserted that, at the moment the warrant in summary proceedings was issued, the defendant was damaged to the extent of the difference between the rent reserved and the actual rental proved upon the trial. Apart from the fact that the defendant instituted the proceedings by which the lease was [611] ended, the default of the lessee cannot be regarded as being the cause of the alleged decrease in rental value. The lessor is only entitled to have recourse to the security to the extent of any damages arising during the tenancy by reason of a breach of the covenants expressly covered by the security under the terms of the lease. Scott v. Montells, 109 N. Y. 1. There is nothing in the lease that would make the present circumstances an exception to the rule so laid down. In Slater v. Von Chorus, 120 App, Div. 16, cited by the defendant, the landlord was held entitled to recover for loss in rentals for certain months after the ending of the lease by summary proceedings because there was a stipulation in the lease justifying the court in holding that the lessee assumed liability for such damages. The recovery was not claimed on the theory of depreciation in rental value. That is not the fact here. The verdict of the jury in the case at bar was clearly based upon damages suffered after the summary proceedings. The court charged that the defendant was entitled, under a verdict in its favor, to the difference between the amount of the rent reserved in the lease and the actual rent obtained by the" defendant after the dispossess proceedings, or the amount which the defendant could have obtained by reasonable effort to rent the premises. Similar instructions were repeated throughout the charge, to all of which the plaintiff’s counsel duly excepted. The further claim made by the defendant for reimbursements, because of moneys expended for repairs that plaintiff was obligated to make under the lease, was not sustained by the proof, because it did not appear that the repairs were made necessary by any neglect of duty occurring during the tenancy. There was also error committed in allowing evidence as to expenses incurred for counsel fees and like items [612] upon the summary proceedings. The jury was author-, ized by the charge to allow for these disbursements. There can be no question that, upon the instructions so given, the verdict was based upon an unauthorized measure of damages. Cuy and Bijur, JJ., concur. Judgment and order reversed and new trial ordered, with costs to appellant to abide event.