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In order to deprive the tenant of the defense the following conditions must be present:
1. Three successive monthly instalments of rent must have been paid,
2. After the commencement of the term of the lease, and
3. After April 30, 1921, when the amendment to the law went into effect.
DEFENSE OF COMMON-LAW DURESS CONSIDERED
The language of Judge McLaughlin of the Court of Appeals upon the subject of the defense of duress, although in a dissenting opinion, is worth quotation here, as on this point it voices the unanimous opinion of the court. 43 The point involved was the sufficiency of the first affirmative defense of the defendant's answer, which, as stated by the court, was as follows:
"First, that the parties executed the lease and renewal as mentioned in the complaint; that prior to the execution of the renewal plaintiff, with intent to coerce defendant into signing the same, stated in words or substance that unless he did so at the increased rental it would terminate his tenancy at the end of the then leased term, and he would be obliged to move; that defendant believed and relied upon said statement and was fearful that plaintiff would carry out said threat ... and that defendant would be unable to secure any suitable or similar apartment, owing to the scarcity of such apartments; that solely by means of such threats and coercion and duress the plaintiff induced defendant to sign the alleged renewal of lease above mentioned providing for such increased rental; and that defendant had tendered and offered to pay the rent for the month of October, 1920, to the extent of $120.83, which was the monthly installment paid for said premises for the month of September, 1920."
43 Edgar A. Levy Leasing Co. v. Siegel, 230 N. Y. 634.
The opinion in regard to this defense is as follows:
"The facts pleaded in the first affirmative defense were insufficient upon the face thereof, and in this all the members of the court agree. Such facts do not constitute duress, nor do they show that plaintiff was coerced into signing the renewal; on the contrary, they show that defendant voluntarily executed it with full knowledge of its contents. He had been told that unless he renewed the lease at the increased rental he would have to vacate and surrender the premises at the end of the term under which he was then in possession. He states that he relied upon what plaintiff told him and believed it would compel him to vacate the premises unless he executed the renewal. This is precisely what he agreed to do when he executed the lease and what the law obligated him to do. He does not allege as a fact that he had been unable to secure another apartment, or that he had made any effort at all in that direction. He alleges he was fearful plaintiff would terminate the lease, cause him to remove from the premises, and that he would, in that event, be unable to secure a similar apartment owing to the scarcity thereof; in other words, this allegation is based entirely upon what he feared might take place. There is no allegation that he had, at any time prior to the commencement of the action, claimed that the renewal lease was obtained by duress, or that he had attempted to have it rescinded on that account, nor did he offer to rescind; on the contrary, he continued in possession and sought to hold the same under the lease which he claims was obtained by duress. The defense of duress is predicated on the alleged threat of the landlord to exercise his lawful right to regain possession of the premises at the expiration of the term then in force. It never constitutes duress for a person to threaten to enforce his legal rights by lawful means.44 If he had been coerced into signing the renewal, he could rescind for that reason, but in order to do so he had to surrender possession of the property. This is the general rule. A party cannot rescind
“ Citing McPherson v. Cox, 86 N. Y. 472; Dunham v. Gri 100 N. Y. 224.
while retaining the fruits of the contract. In case of real estate he must surrender possession before he can maintain an action for rescission of the instrument under which he obtained posses
Where the defense of the statute is not available to a tenant, or where the tenant desires to avoid the necessity of the deposit required by the statute, 46 it is not uncommon for a tenant to interpose the defense of duress. If, after a proper and reasonable time for consideration the tenant pays rent under the agreement, or judgment is recovered for rent, such payment or recovery should be considered as a ratification of the agreement and as debarring the plea of duress. 47
Two points in Judge McLaughlin's opinion should be particularly noted:-1. This plea of duress will not avail a defendant where it appears to be based upon threats of the landlord to exercise his legal rights to regain possession of the premises by lawful means. 2. If there exists coercion, it is the tenant's duty to surrender possession if he urges such coercion in defense. “A party cannot rescind while retaining the fruits of the contract.” 48
In a recent case in the Supreme Court, 49 Justice Wagner, apparently contrary to the overwhelming weight of author
45 Citing Schiffer v. Dietz, 83 N. Y. 300; Tompkins v. Hyatt, 28 N. Y. 347, 353; Oregon Pacific R. R. Co. v. Forrest, 128 N. Y. 83.
46 Chap. 944, Laws of 1920, $ 6.
47 1200 Madison Ave. Corp. v. Merrills, 189 N. Y. Supp. 110 (App. Term, 1st Dept.); B. & S. Realty Corp. v. Wald, 115 Misc. 195, 187 N. Y. Supp. 436 (App. Term, 1st Dept.); Reich v. Cochran, 151 N. Y. 122.
48 Edgar A. Levy Leasing Co. v. Siegel, 230 N. Y. 634, 130 N. E. 923, dissenting opinion of McLaughlin, J., supra. See also Orinoco Realty Co. v. Bandler (App. Div., 1st Dept.), 189 N. Y. Supp. 855.
49 Stayton Realty Co. v. Rhodes, N. Y. L. J., June 22, 1921, page 1070.
ity, has worked out a rather original theory upon which he sustains a pleading embodying the common-law defense of duress, concerning which the opinion says:
“The immemorial doctrine of the common law is that a contract is vitiated by duress provided the party affected by the duress promptly disaffirms the contract and surrenders all benefit derived by him therefrom. The answer contains no allegation of such disaffirmance or surrender. At first thought one might say that the plea of duress therefore cannot be sustained. But a somewhat novel consideration bears in upon the mind. Although at common law, it is necessary that the defendant disaffirm the contract and surrender the advantages derived therefrom, he is prevented in this instance from so doing by the very duress he claims compelled him to make the contract originally. In other words, the deplorable housing conditions of the present day forced him to make the contract; the same conditions prevent him from surrendering the advantages of the contract and thereby perfecting his plea of duress. If there was duress at all, it continues to the present time. If the law recognizes that the assent of one of the contracting parties was originally invalidated by the duress, will not the law also recognize that such party cannot abandon the fruits of the contract because of the same duress? In other words, he now affirms the contract under duress; his assent now is extorted from him by the same force which guided his pen when he first signed the lease. There is therefore no genuine ratification. It must be borne in mind that the defendant does not take the field of litigation of his own initiative seeking affirmative relief from the contract. In that case it might be necessary to hold that he was not in a position to demand such relief. But he is brought into court by the plaintiff before his consent has a chance to operate freely and without duress. In such a case it appears reasonable that the law should not exact of him a disaffirmance which he cannot make, an election when he is not a free agent. I therefore am of the opinion that the continuing duress reflected in the answer is
This subject of the status of the defense of “duress” is undoubtedly of considerable importance in the application of the emergency laws. Summing up the somewhat conflicting opinions, it would appear to be the view of controlling judicial authority that a special statutory duress, rendering an agreement of lease "oppressive," exists where the rent reserved in the lease is “unjust and unreasonable.” If there is no claim or contention that the rent is unjust and unreasonable, apparently, by the same authority, there is no foundation for this special statutory plea of duress. Nor will the courts accept the stress of conditions prevailing at about the time the first emergency laws went into effect 50 as constituting duress at common law. In this view of the law, therefore, only if the tenant pleads the full statutory defense to an action for rent, and conforms to the statutory provisions as to deposit, does he receive the benefits which the emergency law was designed to confer.
Where the rent is claimed to be unjust and unreasonable, moreover, the tenant is not barred from interposing such defense because it appears that he “signed the lease of his own free will.” The statutory test of oppressiveness of the lease agreement is the injustice and unreasonableness of the rental, and the rental may be shown to be unjust and unreasonable even though the lease was voluntarily signed and no actual or "common-law" oppressiveness or duress existed.51
CONCLUSIVENESS OF ADJUDICATION OF REASONABLE RENT
As the law now stands, 52 once there has been an adjudication of the reasonable rental value of premises, it is bind
50 April 1, 1920.
61 See Klamer Realty Corp. v. Brill, 189 N. Y. Supp. 92 (App. Term, 1st Dept.).
62 As amended by Chap. 434, Laws of 1921, $ 7.