Court Opinion

ID: 5329533
Source: CourtListenerOpinion
Date Created: 2022-01-08 05:08:01.436676+00
Date Added: 2024-06-11T08:29:25.850345
License: Public Domain

Finch, P. J.
(dissenting). The lease in question gave to the landlord the option to terminate it upon five days’ notice, upon breach of condition. The landlord, however, was not required so to do. In fact, the lease expressly provided as follows: “ The first five days notice to comply with any of the conditions above enumerated, and for a default whereof the landlord would be entitled to serve the same need not be given in the event of a default in the payment of rent or any part thereof, or in the making of any of the payments herein specifically mentioned in a liquidated amount.”
*82The tenant’s obligations under the lease, therefore, survived re-entry by dispossess proceeding for non-payment of rent, pursuant to the express provisions of the lease. (Lenco, Inc., v. Hirschfeld, 247 N. Y. 44.)
It follows, therefore, that the action was prematurely brought, since the lease provided that the landlord was entitled to retain the deposit as security against any ultimate loss.
It is urged, nevertheless, that the provision of the lease giving to the landlord the right to retain the deposit as liquidated damages constitutes a penalty, and hence is void. This contention would be entitled to consideration only in the event the lease had been terminated without survival of the obligations of the tenant. Moreover, under the circumstances here present, it cannot be said that the parties were attempting to cloak a penalty under the guise of liquidated damages. The clear intent of parties to a contract to stipulate the damages in case of breach will be sustained when the actual damages which in ordinary course would be suffered are not out of proportion to the amount stipulated as liquidated damages. (J. & H. Garage, Inc., v. Flow Corporation, 225 App. Div. 65; affd., 251 N. Y. 553.) In the case at bar there is no such discrepancy. Here, as in J. & H. Garage, Inc., v. Flow Corporation (supra), the breach was in the failure to pay rent. In that case the total amount was $19,000 a year, or at the rate of approximately $1,500 a month, and the sum provided as liquidated damages was $10,000. In the case at bar the annual rent at the time of the commencement of the dispossess proceedings was $25,000 a year and the amount deposited by way of liquidated damages was $12,500. Also in the case at bar, as in J. & H. Garage, Inc., v. Flow Corporation (supra), not only would the default in the payment of rent entail several months loss of rent but in the ordinary course there would likewise be the necessity of making repairs to the premises when an old tenant leaves and a new tenant succeeds. The sum of $12,500 provided as liquidated damages, in accordance with the terms of the léase, cannot be said as matter of law to differ so greatly from the damages suffered in the ordinary course as to require the court to disregard the express stipulation of the parties and hold the same recoverable as a penalty.
The ordér" and judgment should be reversed and the motion denied.
Judgment modified by deducting the sum of $416.67 from $8,350.84, the amount of the judgment, and as so modified said judgment and order appealed from affirmed, with costs to the respondent.