Case ID: ad_167/html/0167-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Stephen Lane Folger, as Trustee in Bankruptcy of John Bensinger, Plaintiff, v. Louise Raczek, Defendant.
    Second Department,
    April 23, 1915.
    Landlord and tenant — deposit of money to secure payment of rent — effect of summary proceedings by landlord — bankruptcy of tenant.
    Where a tenant deposits money with his landlord as security for the payment of rent and, on the bankruptcy of the tenant, the landlord dispossessed him by summary proceedings, there was an election by the landlord to end the relation between them, and hence a waiver of all claims to the deposits except as to the amount applicable for payment of rent then due. The landlord must pay that part of the deposit which is in excess of the rent due when the tenant was evicted over to the trustee in bankruptcy.
    Submission of a controversy upon an agreed statement of facts, pursuant to section 1279 of the Code of Civil Procedure.
    The controversy involves the right to a tenant’s deposit made with the defendant landlord to secure the performance of a lease.
    The bankrupt had leased from defendant certain premises in Brooklyn for five years from June 1, 1913, at the monthly rental of $300 payable in advance on the first of each month.
    The lease provided that “ To guarantee the keeping and fulfilling of this lease, the tenant shall deposit with the party of the first part the sum of Nine Hundred (900) Dollars on which the landlord agrees to allow interest at the rate of Six (6) per cent per year, the total amount, principal and interest, to apply toward the payment of the rent of the premises for the last four months of this lease.” And on June 4, 1913, such a cash deposit was taken and receipted for as security, in accordance with the terms of the lease.
    The bankrupt paid the rent up to and including the month of October. On non-payment of the rent due November first, defendant resorted to summary proceedings and caused a warrant to be served on the bankrupt, who on November twelfth vacated the premises.
    On these facts the plaintiff, who was thereafter appointed trustee in bankruptcy of the tenant, claims judgment for $900, with interest from the date of deposit, deducting $10 a day, or $120, for the twelve days in November during the bankrupt’s occupancy. This is on the ground that by dispossessing the bankrupt defendant terminated the agreement and released the security. Defendant claims that notwithstanding her act in dispossessing the tenant, she did not give up her security; or if the entire $900 may not be so held, that she may hold $300 thereof, being the rent for November.
    
      William B. Hill, for the plaintiff.
    No appearance or brief for the defendant.
   Per Curiam:

The lease contained a clause authorizing the landlord to re-enter in case the premises should become vacant, and then to relet on behalf of the defendant and to hold the tenant for any deficiency, but this remedy was not invoked. Taking summary proceedings and dispossessing the tenant was an election to re-enter and end the relation of landlord and tenant. By this act defendant waived all claim to the deposit, except to apply it in payment of rent then due or accrued. (Caesar v. Rubinson, 174 N. Y. 492, 498.) As the parties did not agree that the sum deposited should be liquidated damages, and, beyond the November rent, no breach or further damages appear, defendant has no ground to keep the whole deposit. (Feinsot v. Burstein, 161 App. Div. 651; affd., 213 N. Y. 703.)

As plaintiff’s brief now concedes, he cannot apportion the November rent, which, being payable on the first, was already due before summary proceedings were taken. (Berg v. Kaiser, 137 App. Div. 1.) Hence, defendant rightly holds $300 for the November rent.

Upon this submission, plaintiff should be adjudged $600, with interest from June 4, 1913, to the date of entry of judgment, also interest on the $300 from June 4 to November 1, 1913, being $7.30, together with costs and disbursements.

Jenks, P. J., Thomas, Carr, Stapleton and Putnam, JJ., concurred.

Judgment for plaintiff on submission of controversy in the sum of $600, with interest from June 4, 1913, to the date of entry of judgment; also interest on $300 from June 4 to November 1, 1913, being $7.30, together with costs and disbursements.