#### James Butler, Incorporated, Respondent, *v.*Edward Deegan and Michael Deegan, Appellants.

First Department,

February 19, 1909.

Landlord and tenant — action for value of use and occupation—defenses — evidence.

It'is a good defense to an action for the reasonable worth of the use and occupation of a building to show that the plaintiff’s assignor, who was originally tenant of the premises, on selling his business to the defendant and when the landlord refused to accept the defendant as tenant, agreed to pay the rent to the landlord and to be liable therefor in consideration of an additional sum paid to him by the defendant.

Although the defendant sued by said assignee after merely denying the material allegations of the complaint specifically denies that any sum was due the plaintiff without alleging payment of rent, he is nevertheless entitled to show that the full consideration for the assignor’s agreement to be liable for the rent was paid prior the commencement of the action, and the exclusion of such evidence is error.

Appeal by the defendants, Edward Deegan and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office' of the clerk of the county of New York on the 16th day of March, 1908, upon the verdict of a jury rendered by direction of the court, and also from an order entered in said clerk’s office on the 17th day of March, 1908, denying.the defendants’ motion for a new trial made upon the minutes.

*Magner & Carew,*for the appellants.

*John H.*Rogan, for the respondent.

.McLaughlin, J.:

The complaint alleges that one'James Butler had a lease from the 15th of March, 1906, to the 15tli of March, 1907, of a portion of a building,, a store,, in which he was carrying on business; that, the defendants occupied the premises by permission, of. Butler as his tenant from-the,1st of April, 1906, to the 15tli of March, 1907; that the use of.said premises was reasonably worth $862.50, no part of which had been paid by the defendants, though payment had been demanded and refused; that on the 22d of June, 1907, and *545prior to the commencement of this action, Butler, for a valuable consideration, assigned his claim to the plaintiff, and judgment was demanded for said sum, with interest.

The answer denied the material allegations of the complaint and specifically denied that there was due the plaintiff the sum of $862.50, or any sum whatever.

At the trial it appeared from the testimony on the part of the plaintiff that on the 1st of April, 1906, Butler sold to the defendants his business, and the defendants thereafter continued in possession of the store during the time for which a recovery was sought; that the rental value of the premises during that time was $75 a month; that’ Butler’s claim was assigned to the plaintiff, and defendants had not paid anything for the use and occupation. From the defendants’ testimony it appeared that, immediately prior to the purchase of the business of Butler, the defendants had a conversation with the landlord, and he would not accept them as tenants in place of Butler; they so reported to Butler and he thereupon said if they would pay him $1,043, he would turn over the store and would be liable for and pay the rent himself. This evidence was in no respect contradicted .by the plaintiff. It, therefore, stands admitted, so far as the record shows, that the real transaction was as claimed by the defendants, and if so, then the plaintiff could not recover for the use and occupation.

Various attempts were made to show that the full consideration of $1,043 had been paid prior to the commencement of the action. All of this evidence was excluded apparently upon the theory that the defendants had not pleaded payment of rent in their answer. The contention was that the relation of landlord and tenant never existed, and it did not if the defendants’ testimony was true. The defendants ascertained before they purchased the business carried on by Butler on the premises that the landlord would not accept them as tenants, but that he should continue to hold Butler as a tenant and they so reported to the latter, and thereupon, according to their testimony, it was arranged that the defendants should include the rent as a part of the purchase money for the store which they agreed to pay to the landlord. If it be true that this was the real transaction then it is obvious they had a right to show they had *546fully paid the consideration, agreed upon, The evidence showing this payment was improperly excluded, and the court erred in directing a verdict.

The judgment appealed from, therefore, is reversed and a new trial ordered, with costs to appellants to abide event.

Ingraham, Laughlin, Clarke and Scott, JJ., concurred.

Judgment and order reversed, new trial ordered, costs to appellants to abide event.