Court Opinion

ID: 7354428
Source: CourtListenerOpinion
Date Created: 2022-07-26 03:41:20.590769+00
Date Added: 2024-06-11T16:20:28.503233
License: Public Domain

LEHMAN, J. (dissenting).
This action is brought by the assignee of a former tenant of the defendants, after the tenants were dispossessed by the defendants, to recover a deposit made under the lease. The lease provides that the tenants intend to make certain alterations on the premises, and that the landlord shall pay half the expense of the alterations, but not in excess of $7,500. The lease then provides that, if any sum in excess of this amount shall be required, the tenants shall pay the same. The tenant's therewith deposited with the landlords the sum of $2,000 as security to insure all the conditions and covenants of this lease, and they further agree that they will begin all the alterations and renovations during the month of June, 1913, and have the same completed as soon as possible, and if such conditions shall be carried out, and performed, the landlord thereupon shall pay to the contractor the said sum of $2,000 so deposited as aforesaid, as the bills are audited and allowed, and the tenants shall be entitled to have free rent during the said months of June, July, and August, 1913. The complaint further sets forth that the defendants have not paid the said sum of $2,000 to any contractor on account of the said share of the tenant, nor have they paid the said sum or any part thereof to any other person; that the work described was not done; and that the defendants did not become obligated to any person for the payment of any work.
The defendants’ answer contains denials, as well as separate defenses and set-offs, and the plaintiff has demurred to the first and second defenses and set-offs. The first separate defense and set-off alleges: That the tenants went into possession of said premises, but did not begin the alterations and renovations during the month of June, 1913, and made no improvements, alterations, or renovations during the month of June, 1913, and made no improvements, alterations, or renovations, as provided, for in the contract and otherwise, but that, on the contrary, and on or about the 25th day of August, 1913, the said Fango Baths, Inc., and the Reliable Contracting Company, the latter acting under instructions from the tenant, the said Fango Baths, Inc., entered upon the building without the knowledge or consent of the defendants and completely ruined it, maliciously and willfully destroying and dismantling the building beyond repair, for the sole purpose of injuring the landlords, the defendants herein, and did thereby cause damage far in excess of $5,000.
*915It is the contention of the plaintiff that this set-off states no cause of action, and that if it does state a cause of action it is for malicious destruction of the property, and not for the breach of any condition or covenant of the lease secured by the deposit in suit. In my opinion this contention rests upon an improper construction of the lease. The lease provides for the making of certain “improvements and alterations in defendants’ building.” The deposit of $2,000 was given as security to insure all the covenants and conditions of the lease, and specifically was to be paid over only when these alterations and repairs were completed. The evident purpose of the deposit was to insure the landlords against the possible failure of the tenants to complete the alterations, leaving the landlords in a position where to secure the benefit of the improvement they would be obliged to pay more than half the cost. The set-off shows not only that the work was not completed, but that the tenants have ruined the building so that it cannot be repaired,
In other words, the tenants instead of carrying out the condition on which the deposit was made, and completing improvements for which the landlords were to pay half the cost, have dismantled the building to the landlords’ great damage. Under such circumstances, they are not entitled to the return of the deposit, unless they make good to the landlords the damage caused by their destroying the building, instead of complying with the condition under which the deposit was made, viz., that the tenants would in a reasonable time complete the alterations. The demurrer to the first separate defense and set-off should therefore have been overruled.
The second defense and set-off states that the lease contained a further clause which provided that the tenants, before awarding the contract for the improvements, will procure from the contractor an agreement that he will hold the landlords free from any liens, and will indemnify them from any liens in connection with said alteration or improvement. The defense further alleges that the Fango Company entered into a pretended contract with the Reliable Contracting Company, which provided that the contract was entered - into under the lease hereinbefore described, and that the Reliable Contracting Company have filed a lien, and the defendants have been served with a summons and complaint in an action to foreclose the lien.
In my opinion the demurrer to the second defense was correctly sustained. The defense fails to allege that the tenants failed to secure from the contractor any agreement to hold the landlords free from any liens for materials and labor, and we cannot presume that no such agreement has been obtained. So far as the clause is contained agreeing to indemnify the landlords from any such liens, no damage is shown if this clause has been breached. On the contrary, the defense itself alleges facts showing that the defendants have a perfectly good defense to any action to foreclose the lien, and that judgment can never be obtained against them. In addition, it does not appear that any demand has been made against the tenants for indemnity.
It follows that the order appealed from should be reversed, with $10 *916costs and disbursements to the appellants, the demurrer to the first separate defense overruled, and the demurrer to the second defense sustained.