Case ID: misc_48/html/0383-01.html
Source: Caselaw Access Project
Author: {"author": "Scott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Samuel Wolf, Appellant, v. Morris Dembosky, Respondent.
    (Supreme Court, Appellate Term,
    October, 1905.)
    Landlord and tenant — Rent — Deposit — When not forfeited by holding over.
    Where a deposit was made by a tenant, “ as security for the faithful performance of all the covenants and conditions of the lease,” and the deposit was to be forfeited as liquidated damages, in case the lease was “ terminated by reason of any act on the part of the” tenant, it may not be applied, either as liquidated damages or security, for damages sustained by reason of the tenant’s holding over.
    So far as regards the tenant’s covenant to “quit and surrender the premises in as good state and condition as reasonable use and wear thereof will permit,” the security was intended to apply to the agreement to leave the premises in good state and condition; not to the obligation to quit and surrender the premises at the end of the term without regard to their state and condition.
    Appeal by the plaintiff from a judgment dismissing the complaint in the Oity Court of the city, of New York.
    Joseph Wilkenfeld, for appellant.
    Alexander Rosenthal, for respondent.
   Scott, J.

The deposit was made as security for the faithful performance by the tenant of all the covenants and conditions of the lease; and, although it is declared that, under certain circumstances, it shall be forfeited as liquidated and settled damages, this declaration is not necessarily controlling as to the character of the deposit. In similar cases it has generally been held that a deposit is to be treated merely as security and not as a provision for liquidated damages. Chaude v. Shepard, 122 N. Y. 397; Scott v. Montells, 109 id. 1; Caesar v. Robinson, 174 id. 492. A close reading of the clause in the lease involved in this action, will make it clear that the sum deposited certainly was not intended to be applied as liquidated damages for the loss which the landlord might sustain by reason of the holding over by the tenant after the expiration of the term, whatever might be its character with relation to any act done by the tenant up to the end of the term. It is provided that the sum now sued for shall be deposited with the landlord “ as security for the faithful performance of all the covenants and conditions of the lease.” The provision-for forfeiting the sum as liquidated and settled damages does not, however, apply to any violation of the terms of the lease, but is only made applicable if the lease shall be “ terminated by reason of any act on the part of the party of the second part before the period above mentioned for nonpayment of rent or in violation of any of the other covenants.” In other words, the deposit was to be treated as liquidated damages, only, if the term of the lease was cut short in consequence of some act of the tenant. This contingency did not arise for the tenant held on until the end of the lease; and, as it is said, attempted to hold on even longer. FTor do we think that, even treated as security, the deposit was intended to cover the expense to which the landlord might be put in dispossessing the tenant for holding over after the expiration of the lease. The only condition of the lease which the tenant is accused of violating is that in which he agrees that, at the end of the term, he will “ quit and surrender the premises in as good state and condition as reasonable use and wear thereof will permit, damages by the elements excepted.” So far as regards this clause, the security was intended to apply to the agreement to leave the premises in good state and condition, and not to the obligation to quit and surrender the premises, at the end of the term, without regard to state and condition.

Bischoff and Fitzgekald, JJ., concur.

Judgment reversed and new trial ordered with costa to appellant to abide event.