MONDELLI v. CAPUTO.

(Supreme Court, Appellate Term, First Department. March 6, 1919.) 1. LANDLORD AND TENANT ~167(7)—NEGLIGENCE OF TENANT-LIABILITY OF

LANDLORD.

Where premises are leased in their entirety, and owner does not retain control of any part, owner is not liable for injuries caused by tenant's negligence.

2. LANDLORD AND TENANT 150(1)-OBLIGATIONS OF LANDLORD-OUTSIDE REPAIRS.

In absence of express covenant, landlord is under no obligation to make outside repairs.

3. LANDLORD AND TENANT ~~167(5)—INJURY FROM COAL HOLE COVER-LIABILITY OF LANDLORD.

Owner will not be held liable for injuries to pedestrian from condition of coal hole cover in sidewalk in front of premises, in that there was no chain or fastening on the cover, where owner had leased and surrendered possession of premises to tenants, and there was no evidence that coal hole cover was in such condition at time of lease, or that owner had actual or constructive notice of its condition, or that such condition in itself constituted a nuisance.

Appeal from City Court of New York, Trial Term.

Action by Ada Mondelli against Calogero Caputo. From a judgment for plaintiff, and from an order denying defendant's motion for a new trial, defendant appeals. Reversed, and new trial ordered. Argued February term, 1919, before LEHMAN, WEEKS, and FINCH, JJ.

G. Everett Hunt, of New York City, for appellant.
Emanuel Van Dernoot, of New York City, for respondent.

WEEKS, J. This action was brought to recover damages for personal injuries alleged to have been sustained by plaintiff in December, 1917, through the negligence of defendant in maintaining in an insecure or unsafe condition a coal hole cover in front of premises owned by the defendant. The coal hole cover had been there ever since defendant had owned the premises, and at the time of the accident the premises were leased in their entirety to certain tenants, who were not parties to the action, under a written lease providing that the lessees should make all inside repairs, but which was silent as to outside repairs.

The plaintiff offered no evidence that the defendant retained control of any part of the premises, except the testimony given by defendant upon an examination before trial as follows:

"Q. Since June, 1915, have you made any repairs in that building? A. The inside repairs have been made by Romano and Aiello. Outside repairs I make myself.

"Q. When was the last time you made any outside repairs? A. About September or October, 1917.

"Q. And what were these repairs? A. I made repairs in the sidewalk in front of the building.

"Q. Did you make any repairs before September or October, 1917, since the making of the lease?

A. No.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes 174 N.Y.S.-40

"Q. That was the only time you made any repairs in this building or in front of the building, since the lease was made with Romano and Aiello? A. Yes.

"Q. You had to repair and take care of the sidewalk in front of said building? A. Yes.

"Q. That had nothing to do with Romano and Aiello under this lease? A. No."

[1, 2] While respondent recognizes the well-settled principle that where premises are leased in their entirety, and the owner does not retain control of any part thereof, there is no liability of the owner for injuries caused by the negligence of the tenant (Clancy v. Byrne, 56 N. Y. 129, 15 Am. Rep. 391; Wolf v. Kilpatrick, 101 N. Y. 146, 4 N. E. 188, 54 Am. Rep. 672), and that in the absence of express covenant the landlord is under no obligation to make the outside repairs (Witty v. Matthews, 52 N. Y. 512; Castagnette v. Nicchia, 76 App. Div. 371, 78 N. Y. Supp. 498; Schiavone v. Callahan, 52 Misc. Rep. 654, 102 N. Y. Supp. 529; Rheims v. Dooley, 93 Misc. Rep. 500, 157 N. Y. Supp. 213),. it is claimed that the admission by the defendant that he was to make the outside repairs himself, and that he made repairs to the sidewalk, requires the affirmance of the judgment. It has been held, however, that, although the landlord had made repairs, this did not relieve the tenant from his liability to a stranger. Weber v. Lieberman, 47 Misc. Rep. 593, 94 N. Y. Supp. 460; Rheims v. Dooley, supra.

There was no evidence that the condition of the sidewalk constituted a nuisance, or that the accident was due to a defect which existed at the time defendant leased and surrendered possession of the premises to his tenants, and the case was tried solely upon the theory of negligence. The only evidence as to the condition of the coal hole or its cover was that there was no chain or fastening of any kind thereon, and there was no evidence that the premises were leased in that condition, or that the defendant had either actual or constructive notice of the condition, even if it could be maintained, to which we do not agree, that his admission was sufficient to support the claim that there was an agreement, independent of the lease, to make outside repairs. If there never had been any chain or fastening, the furnishing of such a chain would not be a repair, nor would the replacement of a broken chain be an outside repair.

[3] The principles of law properly applicable to the case are tersely stated in Silverman v. Isaac, 183 App. Div. 542, 170 N. Y. Supp. 290, as follows:

"It would seem clear that the landlord is not liable for this injury. He has not covenanted to repair, and, even if he had, he would not be liable for plaintiff's injuries by reason of the lack of repair. Kushes v. Ginsberg, 99 App. Div. 417 [91 N. Y. Supp. 216], affirmed 188 N. Y. 630 [81 N. E. 1168]. A promise to repair, not made a part of the lease and not upon consideration, creates no obligation of any kind. Marston v. Frisbie, 168 App. Div. 670 [154 N. Y. Supp. 367]. It follows that the plaintiff has no right of recovery against defendant for the injury. Schick v. Fleischauer, 26 App. Div. 210 [49 N. Y. Supp. 962]."

The judgment and order, therefore, should be reversed, with costs. to appellant to abide the event, and a new trial ordered. All concur.

DOWLING v. WYNNE.

(Supreme Court, Appellate Division, First Department. January 31, 1919.) PROCESS 119-SERVICE OF SUMMONS.

Where defendant came into the state and was attending as a witness upon the trial of an action, while on his way from the courthouse to the train to return to his residence, he was immune from service of civil pro

cess.

Appeal from Special Term, New York County.

Action by William B. Dowling against Kenneth Wynne. From an order denying defendant's motion to set aside service of summons, defendant appeals. Order reversed, and motion granted.

Argued before CLARKE, P. J., and DOWLING, SMITH, PAGE, and SHEARN, JJ.

Bennett, Werner & Nave, of New York City (Mark Nave, of New York City, of counsel), for appellant.

Edward H. Lockwood, of New York City, for respondent.

PER CURIAM.

The defendant came into this state and was attending as a witness upon the trial of an action, and was served with a summons as he was leaving the courthouse on his way to the train to return to the state of his residence. He was therefore immune from service of civil process.

The order should be reversed, with $10 costs and disbursements, and the motion granted, with $10 costs. Order filed.

(186 App. Div. 538)

MERRY REALTY CO., Inc., v. SHAMOKIN & HOLLIS REAL ESTATE

CO., Inc., et al.

(Supreme Court, Appellate Division, Second Department.

1. VENDOR AND PURCHASER 33-FRAUD.

February 21, 1919.)

Where purchase of land was induced by corporation seller's represen tations that one, who was in fact owner of half its stock, was a disinterested realty expert, who would act as broker for the buyer, and by such pretended broker's representations to the buyer as to value of the property purchased, the purchase was voidable for seller's fraud.

2. CONTRACTS 98 RESCISSION-DAMAGES.

A defrauded party has alternative of rescission or an action for damages for deceit; but these remedies are inconsistent, and cannot coexist, one resting upon avoidance of contract and the other upon affirmance. 3. VENDOR AND PURCHASER 310-RECOUPMENT.

At common law, if, upon sale of property, purchase price is not fully paid, and vendor brings action to recover it, vendee might, under plea of general issue recoup, by way of deduction of plaintiff's claim, the damages that he has suffered by fraud or breach of contract of plaintiff in transaction forming grounds of the action.

4. SET-OFF AND COUNTERCLAIM 1-KECOUPMENT,

At common law a claim for recoupment was cognizable at law, and differed from set-off, which was a head of equity jurisdiction.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

5. SET-OFF AND COUNTERCLAIM 27(1), 35(1)-"RECOUPMENT."

At common law, in recoupment, claim of defendant must arise out of transaction that constitutes plaintiff's cause of action, and may rest in tort or contract, or be for liquidated or unliquidated damages.

[Ed. Note. For other definitions, see Words and Phrases, First and Second Series, Recoupment.]

6. SET-OFF AND COUNTERCLAIM 33(1), 35(1)—“SET-OFF”—NATURE.

At common law, in set-off, both claims must arise on contract, and damages be liquidated, and it is not necessary that they arise out of same transaction.

[Ed. Note. For other definitions, see Words and Phrases, First and Second Series, Set-Off.]

7. SET-OFF AND COUNTERCLAIM 6, 59-RECOUPMENT.

At common law, recoupment was by way of reduction of plaintiff's demand, and could not be basis of an affirmative judgment for defendant, and could only be had when facts justifying it constituted a cause of action in favor of defendant against plaintiff, and was admitted as a defense to avoid circuity of action.

The method of pleading recoupment as a defense under the general issue was swept away by code pleading, and a counterclaim now embraces both recoupment and set-off.

At common law, defense of recoupment was admissible on a mortgage foreclosure, where mortgage was for part of purchase price of property, and, except as a means of paying the purchase price, had no validity. 10. SET-OFF AND COUNTERCLAIM AFFIRMATIVE JUDG

MENT.

59-RECOUPMENT

Under Code Civ. Proc. § 503, recoupment is a counterclaim and not a defense, and an affirmative judgment may be entered thereon for the amount established in excess of plaintiff's demand.

11. MORTGAGES

415(3)—FORECLOSURE-RECOUPMENT-DECEIT.

In an action to foreclose a mortgage given as part of purchase price of land, defendant can, under Code Civ. Proc. § 503, set up a counterclaim based on deceit in transaction out of which mortgage arose in reduction of plaintiff's recovery on mortgage.

Appeal from Trial Term, Kings County.

Action by the Merry Realty Company, Incorporated, against the Shamokin & Hollis Real Estate Company, Incorporated, and others. From an adverse judgment, the plaintiff appeals. Affirmed.

Defendant Shamokin & Hollis Real Estate Company, Incorporated, was the owner of 32 lots of land at Hollis, Queens county, N. Y. . The plaintiff was the owner of premises No. 1057 Bergen street, in the borough of Brooklyn, * carried in the name of a dummy, Martin. By contract dated the 2d day of August, 1916, between Martin and the defendant, they agreed to exchange these two pieces of property. For the purpose of the exchange the Hollis property was valued at $25,000, and was to be conveyed free and clear of incumbrances, and the Bergen street property was valued at $65,000 and was to be taken subject to a first mortgage of $34,000 and a second mortgage of $6,000. The defendant, hereinafter called the Shamokin Company, was owned by residents of Shamokin, Pa. The plaintiff was owned equally by one Pramuk, a resident of Shamokin, and Green, a resident of Brooklyn, and Pramuk and Green were partners in a real estate business carried on in the borough of Brooklyn. Pramuk and Green represented to the defendant that Green was a disinterested broker who would aid the defendant in securing an exchange of its nonproductive property in Hollis for income-producing property in the borough of Brooklyn, and the negotiations leading to

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

the exchange were had between the officers of the defendant company and Green, who acted as broker for the defendant and was subsequently paid the sum of $625 commissions. Green represented that the Bergen street property was owned by Martin; that Martin was a wealthy contractor; that the property was subject to a first mortgage, held by the Lawyers' Title & Trust Company, and to a second mortgage of $10,000, which had been reduced to $6,000; and that the Bergen street property was worth $65,000.

The defendant, believing these representations, and induced to believe that Green was a disinterested expert, who was advising it in its own interest, entered into the contract of exchange. As a matter of fact, the property was not owned by Martin, a contractor and builder, but was held by Martin, who was an osteopathic physician, as a dummy for the plaintiff. Green was not a disinterested expert, but was, through ownership in the stock of the plaintiff company, practically a half owner of the Bergen street property; the $34,000 mortgage was not a first mortgage held by the Lawyers' Title & Trust Company, but, by the device of a participation agreement, was in effect a first mortgage for $29,000 and a second mortgage for $5,000; there was no $10,000 mortgage that had been reduced to $6,000, but pending the negotiations and for the purpose of the contract, a mortgage for $6,000 was given without consideration by Martin to the plaintiff company.

The contract of exchange was carried out in accordance with its terms. The property was conveyed subject to the mortgage for $34,000 and to the mortgage held by the plaintiff for $6,000 and, the interest not having been paid according to the terms of the mortgage, the plaintiff began foreclosure proceedings. The defendant set up the facts above recited, by way of de-fense and counterclaim, and asked that the mortgage be annulled and that damages be awarded for the fraud, and during the progress of the trial it asked to amend its answer by demanding a rescission of the contract. After trial the court gave judgment annulling the mortgage and awarding to the defendant the sum of $6,625 damages, besides interest and costs, to be paid by the plaintiff. From the judgment entered thereon the plaintiff appeals. For opinion below, see 103 Misc. Rep. 9, 169 N. Y. Supp. 696. Argued before JENKS, P. J., and MILLS, PUTNAM, BLACK- ́ MAR, and KELLY, JJ.

John M. O'Neill, of Brooklyn, for appellant.

Frederick N. Van Zandt, of Brooklyn (George F. Hickey, of New York City, and Herbert A. O'Brien, of Jamaica, on the brief), for respondents.

BLACKMAR, J. [1] The evidence amply sustained the finding that the defendant was induced by fraud to exchange with Martin, who acted as dummy for plaintiff, its property at Hollis for the apartment upon which was the mortgage that this action is brought to foreclose. The false representation was not of value only, but of facts and circumstances that were intended to and did lead the defendant to accept and rely on plaintiff's representation of value. The trick and device whereby defendant was induced to accept the representation of value by the real owner as the advice of a disinterested expert worked a palpable and successful fraud.

The defendant, pleading the facts constituting the fraud as a defense and counterclaim, has prevailed, and received a judgment canceling the mortgage of $6,000 and awarding to it the sum of $6,625 damages, with interest and costs, to be paid by the plaintiff, and the plaintiff appeals to this court therefrom. The judgment was based on findings that defendant received in the exchange property worth $12,000 less than that with which he parted, and paid $625 commission,