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In the same case it was held that the deposit was only required of a defendant in possession. The court said:
“The intent of the Legislature was to have the requirement for deposit apply only in those cases in which the tenant's continued possession of the premises without paying the landlord some rent would be unfair to the landlord. It was clearly not intended to be a statute limiting the right of a former tenant to litigate the question of the reasonableness of the rent demanded, when the litigation of such question in no way affected the emergency which the Legislature was seeking to cope with in passing the statute involved.”
The statute, however, does not appear to differentiate between a tenant in possession and one who may have removed prior to the time when “the issue of fairness and reasonableness of the amount demanded in the complaint" is raised.
The interposition of a counterclaim by a tenant will not enable him to avoid making the deposit required by the statute. It if were otherwise, the mere assertion of a claim, no matter how fictitious or exaggerated it were, would enable the tenant to thwart the plain purpose of the statute.3
WHEN AND TO WHOM MADE
The deposit must be made at the time of answering and it must be made to the clerk of the court.
The amount deposited must equal all sums due at the time of answering. This of course would include all sums in arrears. The statute as amended - makes this very clear.
: Re Gemell Corporation, Mun. Ct., C. of N. Y., 7th Dist., 1921, Marks, J.
4 Chap. 434, Laws of 1921, $ 6. See infra, Appendix B, page 310,
Before the amendment this subject was not free from doubt, although recently it has been held 5 that the amendment of 1921 merely made plain the intent of the Legislature as it was embodied in the statute of the preceding year, and that where a tenant was sued for seven months' rent which became due prior to the amendment of the law in 1921, the tenant was required to make a deposit of the rent due for the entire period, and that the requirements of the statute were not satisfied by the deposit of a single month's rent. The court said:
"Clearly, it was the intent of the Legislature to adequately secure to the landlord some rent for his property during the time of litigation. The construction placed on the statute by the defendant, who, when sued for seven months' rent past due, deposits one month's rent at the old rate, would fail to give such adequate security.”
The statute says the amount of this deposit shall be "computed at the monthly rate of the rent last paid or reserved as the monthly rent in the agreement under which he (the tenant) obtained possession of the premises.” The language of the statute does not make the meaning entirely clear. Its meaning would seem to be this: as to a tenant who has paid a monthly rate of rent, he is required to deposit at the rate at which he has last paid; as to a tenant who has not paid but has agreed to pay in the agreement under which he obtained possession, he must deposit at the rate provided for in that agreement.
Where a tenant has renewed a lease at a higher rental than he has paid during the term which has expired, but has paid
• Umatilla, Inc., v. Quinn (Callahan, J., City Ct. of N. Y.), N. Y. L. J., Aug.
no rent according to the terms of the new lease, the amount he is required to deposit in an action for rent would seem to be the amount he has last paid and not the rent agreed to be paid under the new lease, according to a recent decision.
CONSEQUENCES OF FAILURE TO MAKE DEPOSIT
The statute is very clear and specific in the consequences it imposes for a failure to make the deposit required. It reads:
"If the defendant fail to make such deposit, the court shall strike out the denial or defense raising such issue.” 74
If a tenant does not wish to incur this penalty, he must promptly, when answering, make the required deposit.
Courts are careful to see that the landlord's rights to the security of the deposit are not defeated through any technicality. As stated in a recent decision:
“Defendants have invoked the protection of the Housing Laws. Through technicalities they should not be allowed to deprive the plaintiff of the protection afforded the landlord by the same laws." 8
In granting a motion to strike out a tenant's statutory defense of unreasonableness because of his failure to make the deposit required by the statute, in the case of Belnord Realty Co. v. Levison,. Mr. Justice Whitaker said:
“The terms of the statute are mandatory. The very unusual privilege or right given the defendant to interpose the defense of
· Beauclere Apartment Corp. v. Dillon (Supreme Ct., N. Y. Co., Martin, J.), N. Y. L. J., August 3, 1921, page 1406.
• g 6, Chapter 434, Laws of 1921.
unreasonableness of the rent in action on leases ... is expressly based upon the positive requirement that a deposit should be made. The court cannot under the terms of the statute enlarge this special privilege."
The court at the same time denied a motion in the same action in which the tenant asked to be relieved from the consequences of his failure to comply with the statute and for an extension of time within which he might make the statutory deposit, saying:10
“There is no provision of law for granting such a motion. The penalty for failure to make the deposit is ground for striking out an answer that the rent is unreasonable."
There are, however, many cases in which the amount of the deposit has been the subject of dispute, where the courts have extended to the tenant the opportunity to make an increased deposit, where that has been held requisite. 11
In none of the cases except the case of Belnord Realty Co. v. Levison, heretofore noted, has the question of the right of the court to relieve a tenant from his default and extend his time to make the requisite deposit been directly passed upon.
EFFECT OF DEPOSIT
Of course, the amount which is required by way of a deposit is in no sense an adjudication of the amount of rent which the tenant will be held to pay eventually as a result of the trial of the action or proceeding. 12
The deposit can in no manner be regarded as an admission 10 N. Y. L. J., June 9, 1921, page 908.
11 Beauclere Apartment Corp. v. Dillon (Supreme Ct., N. Y. Co.), Martin, J., N. Y. L. J., August 3, 1921, page 1406.
12 Mattikow v. Ackerman, No. 4, App. Term, 2nd Dept., April 25, 1921, not reported.
or confession that the sum deposited is due the landlord. The deposit cannot be regarded as justifying a judgment in the amount deposited, without adequate proof to support a judgment in that amount. 13
It has been held that the deposit made was only by way of security to the landlord imposed by the statute on the tenant, and was in no sense a voluntary payment by the tenant. 14
WHEN LANDLORD MAY SECURE DEPOSIT Prior to the amendments effected in the law by Chapter 434 of the laws of 1921, much diversity of opinion existed as to the right of the landlord to have paid over to him by the clerk of the court moneys deposited by the tenant pursuant to the provisions of the statute. 15
The statute is now specific as to when the clerk shall pay over the landlord. If the deposit is made upon the basis of rate of rent last paid by the tenant, then, on demand, the clerk must turn over the moneys deposited to the landlord. If, however, the deposit is at the rate which the tenant has agreed to pay, but has not as yet paid, the court is authorized to decide on motion by the landlord whether the whole or what proportion of the sum deposited shall be paid to the landlord pending the final determination of the action. This action by the court must be made upon proper motion papers and five days' notice of the application must be given to the tenant.
13 Shuck v. McCarthy, 189 N. Y. Supp. 195 (App. Term, 1st Dept.)
14 Trop v. Van Voorhis, 113 Misc. 697, 186 N. Y. Supp. 517 (Mun. Ct., C. of N. Y., Crane, J.); Talkin v. Romer, 113 Misc. 607, 186 N. Y. Supp. 237 (Mun. Ct., C. of N. Y., Law J.)
15 See Trop v. Van Voorhis, supra, and Talkin v. Romer, supra and Mofanthe Realty Co. v. Cohen, 113 Misc. 391, 185 N. Y. Supp. 572 (Mun. Ct., C. of N. Y., Robitzek, J.)