Case Name: Charles Rosenberg and Salomon Steinfeld, Respondents, v. Rosa Frankel, Appellant, Impleaded with Another
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1908-01-17
Citations: 123 A.D. 700
Docket Number: 
Parties: Charles Rosenberg and Salomon Steinfeld, Respondents, v. Rosa Frankel, Appellant, Impleaded with Another.
Judges: 
Reporter: Appellate Division Reports
Volume: 123
Pages: 700–703

Head Matter:
Charles Rosenberg and Salomon Steinfeld, Respondents, v. Rosa Frankel, Appellant, Impleaded with Another.
Second Department,
January 17, 1908.
Landlord and tenant — contract indemnifying landlord against claims by tenant—measure of damages.
The defendant lessees surrendered their lease to the landlord with a written agreement stating that all tenants on the premises were monthly tenants with-terms expiring with the current month, and that, in the event of any tenant claiming a tenancy for a longer period, the defendants would indemnify and hold the plaintiffs harmless of -all costs, charges, expenses and counsel fees they might be put to by reason of any tenants claiming they were not monthly tenants, and that should legal proceedings be instituted against any tenant then on the premises for a recovery thereof, and the defense be that they had rented the premises for a longer period than one month, the defendants would aid the plaintiffs to recover possession and hold them harmless for costs, charges, counsel fees and expenses incurred in such action, etc. Thereafter the plaintiffs conveyed the premises to a third person with covenant against incumbrances. Subsequently the grantee recovered judgment against his grantors for damages caused by the fact that tenants in possession at the time of the surrender of said lease were holding under yearly tenancies. The defendants had been given notice to defend but failed to do so. In an action on the guaranty aforesaid, .
Held, that it was error to allow proof of the value of the services of the plaintiffs’ attorney in prosecuting the action against the defendants, the recovery being limited to the costs allowed by statute;
That the measure of damages for the breach of the agreement sued upon was the difference betwen the actual rental value of the premises and the rent reserved in the leases;
That the actual rental value should he determined according to the .condition of the premises at the time of making the agreement, and should not include an increased rental value due to subsequent improvements made upon the property, these not being within the contemplation of the parties.
Appeal by the defendant, Rosa Frankel, from a judgment of the Municipal Court of the city of New York, borough of Richmond, in favor of the plaintiffs,-render ed. on the 1st day of March, 1907. .
Nathaniel Tonkin, for the appellant.
William, M. Mullen, for the respondents.

Opinion:
Miller, J.:
Tliis is, an appeal from a judgment of the Municipal Court. The defendants being lessees of premises owned by the plaintiffs surrendered their lease, and at the same time made an agreement the material part of which I quote: That all the tenants of said mentioned premises are monthly tenants and their terms of tenancy expire with the current month. That upon the representations by us made, to Salomon Steinfeld and Charles Rosenberg that the said premises are rented to monthly tenants only, the said Salomon Steinfeld and Charles Rosen berg'.are induced to accept the surrender of the said mentioned premises and refunding us the several deposits of security, relying upon the truthfulness of the repre sen-tations by us made to them. ' That' in the event of any tenant or tenants claiming that their tenancy is for a longer period than a monthly tenancy, that we hereby guarantee to indemnify and hold harmless the said Salomon Steinfeld and Charles- Rosenberg,' or either of them, for any and all costs, 'charges, expenses and counsel fee they or- either of them may be put to by reason -of any tenant pf tenants claiming they are not monthly tenants. That should legal proceedings be instituted against any of the'tenants now in said mentioned premises for the recovery of the premises .'occupied by them, and the defense ,'be' that they have rented the premises for a-longer period than a monthly tenancy, that we shall aid the said Charles Rosenberg or Salomon Steinfeld to recover the possession' of the said premises,.and hold.him harmless for all costs, charges, counsel fee and expenses incurred by reason of such action; and. make good to him on demand all damages, costs, charges and expenses incurred." Thereafter the plaintiffs conveyed said premises to one Barr, with a covenant against incumbrances. Subse-. quent-ly Barr brought an action against the plaintiffs.in the Municipal Court, claiming damages by reason of the fact that two of the tenants in possession at the time of the surrender of said lease' aforesaid were holding under yearly tenancies, and recovered a judgment for- the sum of $108. The defendants had notice to defend said action, but omitted to do so. This action is brought.on tire provisions of the agreement quoted supra, and the plaintiffs have recovered the amount of the judgment recovered in :the-action brought by Barr, the sum of ten dollars expense of employing counsel for defending said action, and the sum of forty dollars, the amount paid the plaintiffs' attorney for the trial 'of- the- present;action; . -The judgment roll in the action brought by Barr against-the plaintiffs is-" not annexed, tp the returnon appeal. -It was not received-in evidence on the question of -the plaintiffs' damages. The plaintiffs' proof on that subject was that after the" purchase of «the property by Barr the latter expended several thousand dollars' in improve-" meats, and that by reason thereof the rental value df that portion of-the premises occupied by the- tenants referred-to supra had increased,' and it must be assumed" that such increase furnished the basis for the recovery -in this casq, 'because it is undisputed that the rent' reserved in the leases to saidffenants w'as, the full rental value of the premises in the condition in which they were at the time of the making of the agreement sued upon..
It was error to allow proof of the value of the services of the attorney for prosecuting this action. The plaintiffs' recovery for the expense of prosecuting this action is limited to the costs allowed by statute. The measure of .damages for the breach of the agreement sued upon was the difference between the actual rental value of the premises and the rent reserved in the leases. (Dodds v. Hakes, 114 N. Y. 260, 265.) The actual rental value must be determined according to the condition of the premises at the time of the making of the agreement. Any increased rental value due to subsequent improvements of the property was not within the contemplation of the parties to the contract, and hence not recoverable.
The judgment is reversed.
Hooker, .G-AYNOE.and High, JJ., concurred ; Hirschbeeg, P. J., not voting.
• Judgment of the Municipal Court reversed and new trial ordered, costs to abide the event.