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I think the complaint should be dismissed, but without costs. The requests for findings of the respective parties have been passed upon as indicated on the margins. Submit for my signature upon two days' notice of presentation a complete copy of the decision, which shall embody, without change of language all findings made by me at the request of either party, and also an additional finding dismissing the complaint, without costs, with proof of service on the other side.

78TH ST. & BROADWAY CO. v. PURSSELL MFG. CO. (No. 6851.) (Supreme Court, Appellate Division, First Department. March 12, 1915.) LANDLORD AND TENANT 208—RENT- LIABILITY OF ASSIGNEE.

When an assignee accepts an assignment of the lease, he thereby creares a privity of estate between himself and the lessor, which renders him liable for the rent reserved in the lease, whether he remains in actual possession of the premises or not, unless the estate is terminated by an assignment of the lease by him, or by the surrender of the premises with the consent of the landlord.

[Ed. Note.-For other cases, see Landlord and Tenant, Cent. Dig. $$ 737, 821-831; Dec. Dig. Om 208.] Appeal from Appellate Term, First Department.

Action by the 78th Street & Broadway Company against the Purssell Manufacturing Company. Judgment of the Municipal Court for the plaintiff was affirmed by the Appellate Term, and defendant appeals. Affirmed.

Argued before INGRAHAM, P. J., and McLAUGHLIN, LAUGHLIN, CLARKE, and SCOTT, JJ.

Clarence De Witt Rogers, of New York City, for appellant.
Henry S. Mansfield, of New York City, for respondent.

McLAUGHLIN, J. On February 21, 1911, the plaintiff leased certain real estate in the city of New York, at a specified rental, to the Purssell Manufacturing Company, a domestic corporation, for a term of five years from May 1, 1911. The lessee entered into possession and occupied the premises and paid the rent agreed until February, 1912, when it was adjudicated a bankrupt and a receiver appointed. The receiver then took possession of the premises and occupied the same until the lease was assigned to the defendant. On May 8, 1912, pursuant to an order of the United States District Court for the Southern District of New York, the receiver sold all of the assets of the bankrupt, including the lease in question, to Frank J. Walsh and John A. Ives. Walsh and Ives then organized the defendant corporation, for the purpose of taking over the assets of the bankrupt, and on May 22, 1912, caused the bill of sale of the same, including an assignment of the lease, to be made directly to it. The corporation immediately took possession of the premises and continued to occupy the same and pay the rent in accordance with the terms of the lease, until April 30, 1914. On that day it abandoned the premises and no

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

tified plaintiff that its occupancy was at an end. The keys to the building were presented to one Calder, president of the plaintiff, who refused to accept or give a receipt for them, and they were, accordingly, left in plaintiff's office. This action was brought in the Municipal Court of the City of New York to recover the rent stipulated to be paid for the month of May. Plaintiff had a recovery for the amount claimed. An appeal was taken to the Appellate Term, where the judgment of the Municipal Court was affirmed. The defendant now appeals to this court from the determination of the Appellate Term.

The appellant contends that it, being a mere assignee of the lease, and never having assumed or agreed to carry out any of its covenants, was liable only for the rent while it remained in possession, or, in other rds, it was liable by reason of the privity of estate created by the assignment of the lease to it, which liability was dependent upon its remaining in possession. This contention finds support in the case of Fechter v. Schonger, 53 Misc. Rep. 648, 103 N. Y. Supp. 738, which held that the assignees of a lease were liable for rent only for the period during which they remained in possession. This view of the law is contrary to the view of the Appellate Term, from which the present appeal is taken, and in my opinion is erroneous. When an assignee accepts an assignment of a lease of real property, he thereupon, by virtue of the assignment, becomes liable to the lessor for the rent stipulated to be paid. The acceptance of the assignment creates a privity of estate between the lessor and the assignee, and it is not material that such acceptance be followed by the assignee's entering into possession of the premises. Stone v. Auerbach, 133 App. Div. 75, 117 N. Y. Supp. 734; Tate v. Neary, 52 App. Div. 78, 65 N. Y. Supp. 40; Tate v. McCormick, 23 Hun, 218. The privity of estate thus created, however, may be terminated by assignment of the lease, or by surrender of the premises with the consent of the lessor. Frank v. N. Y., L. E. & W. R. R. Co., 122 N. Y. 197, 25 N. E. 332; Dassori v. Zarek, 71 App. Div. 538, 75 N. Y. Supp. 841; Tate v. McCormick, supra. But until that privity of estate has been terminated the assignee remains liable for the rent stipulated to be paid.

In the case at bar the defendant did not assign the lease, and the lessor refused to accept a surrender of the premises. The privity of estate which was the basis of defendant's liability was not, therefore, terminated, and for that reason defendant was liable for the rent for which a recovery was had. The conclusion thus reached makes it unnecessary for us to determine whether the defendant, by its letter to the plaintiff, under date of May 23, 1912, assumed and agreed to carry out the terms of the lease.

The determination of the Appellate Term is therefore affirmed, with costs. All concur.

GLEASON v. BUSI. (No. 42–96.)

(Supreme Court, Appellate Division, Fourth Department. March 3, 1915.)

1. JURY O13-SUBSTITUTION OF PARTIES—RIGHT TO JURY.

Where, in replevin, the bailor of the goods in controversy was substituted as defendant for the bailee, pursuant to Code Civ. Proc. $ 820, authorizing interpleader, the action became an equitable one, triable by the court, and neither party had the right to a trial by jury.

(Ed. Note.-For other cases, see Jury, Cent. Dig. 88 35–83; Dec. Dig.

Om 13.] 2. JURY O13—SUBSTITUTION OF PARTIES--EFFECT.

Though an action at law was changed to one in equity because of an order of interpleader, pursuant to Code Civ. Proc. § 820, the parties to the litigation could treat it as a common-law action, in which case the action would be tried as any other common-law action, [Ed. Note.-For other cases, see Jury, Cent. Dig. 88 35–83; Dec. Dig.

13.) 3. BANKRUPTCY OM>326_COUNTERCLAIM—"CONNECTED WITH THE SUBJECT OF

THE ACTION.”

Where, in replevin, plaintiff's title depended on the validity of a transfer by one substituted as defendant, and who became bankrupt within four months after the transfer, the right of the trustee in bankruptcy, substituted as party defendant, to avoid the transfer as a preference under the Bankruptcy Act, was a quasi contractual right “connected with the subject of the action, within Code Civ. Proc. $ 501, authorizing a counterclaim connected with the subject of the action," and the trustee could set up as a counterclaim his right to avoid the transfer.

[Ed. Note.--For other cases, see Bankruptcy, Cent. Dig. § 514; Dec. Dig. Om 326.

For other definitions, see Words and Phrases, First and Second Series, Connect.)

Appeal from Trial Term, Monroe County.

Action by James F. Gleason against a bailee of certain apples, in which the Growers' & Shippers' Exchange was substituted as defendant, and in which thereafter Seth J. T. Bush, trustee in bankruptcy of the Exchange, was substituted as defendant. From a judgment for plaintiff, defendant appeals. Reversed, and new trial granted.

The action was in replevin, brought by plaintiff, Gleason, against a bailee of certain apples to recover possession thereof. Thereafter by an order of the court the original bailor of the apples, Growers' & Shippers' Exchange, was substituted as defeudant in the action in the place of the original de fendant, pursuant to the provisions of section 820 of the Code of Civil Procedure. The substituted defendant, Growers & Shippers' Exchange, was after its substitution as defendant adjudicated a bankrupt, and the defendant Bush, after his appointment as trustee in bankruptcy of the bankrupt's estate, was substituted as defendant in the place of the bankrupt corporation. The answer interposed by the defendant trustee among other things alleged as a counterclaim his right as trustee to recover the apples, or the value thereof, as property of the bankrupt transferred by it to plaintiff within four months next preceding the date of the adjudication of its bankruptcy without receiving from plaintiff any consideration therefor; he then knowing the company was insolvent and that the transfer was so made to enable him to secure a larger percentage upon his claim against it than other creditors in like situation with himself.

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

Argued before KRUSE, P. J., and ROBSON, FOOTE, LAMBERT, and MERRELL, JJ.

Cogswell Bentley, of Rochester (Bentley & MacFarlane, of Rochester), for appellant.

Irving L'Hommedieu, of Medina (L'Hommedieu & Whedon, of Medina), for respondent.

PER CURIAM. [1] When the order was made substituting the bailor of the apples in controversy for the bailee thereof as the defendant in the action, the action thereupon became an equitable one triable by the court, and neither party had the right to a trial by jury. Clark v. Mosher, 107 N. Y. 118, 14 N. E. 96, 1 Am. St. Rep. 798. Had the action been tried as one in equity, there could be little doubt that defendant should have been permitted to prove his alleged counterclaim that the transfer to plaintiff of the apples in question constituted a preferential transfer of the property of the bankrupt, voidable at his election. “When a court of equity obtains jurisdiction, and all the facts are before it by supplemental pleading, as they are here, it may and generally does adapt the relief to the situation existing at the close of the litigation." Dammert et al. v. Osborn et al., 140 N. Y. 30, 43, 35 N. E. 407, 411, citing Peck v. Goodberlett, 109 N. Y. 181, 16 N. E. 350, Madison Ave. Bap. Ch. v. Oliver St. Bap. Ch., 73 N. Y. 83. See, also, Sherman v. Foster, 158 N. Y. 587, 53 Ñ. E. 504; Hunt v. Provident Savings Life Assur. Soc., 77 App. Div. 338, 343, 79 N. Y. Supp. 74,

[2] Though, because of the order of interpleader, the action was changed from one at law to one in equity, yet the parties to the litigation could still treat it as a common-law action, in which all the issues were triable by a jury. Voss v. Smith, 87 App. Div. 395, 84 N. Y. Supp. 471. In the present case the parties seem by consent to have chosen to try the action as one at law. The case under these circumstances should then be tried precisely in the same way as any other common-law action. Voss v. Smith, supra.

[3] We shall therefore consider the case as one at common law. The counterclaim above referred to, which defendant sought to interpose-i. e., the right of the trustee to attack plaintiff's title to the apples as obtained because of a preferential transfer thereof voidable at the trustee's optiondid not exist at the time the action was begun. A cause of action may be interposed as a counterclaim, though it arose after the commencement of the action, if, as provided by subdivision 1 of section 501 of the Code of Civil Procedure, it is one "arising out of the contract or transaction set forth in the complaint as the foundation of the plaintiff's claim, or connected with the subject of the action.” Caspary v. Hatch, 157 App. Div. 679, 142 N. Y. Supp. 785.

Plaintiff's cause of action was based upon his alleged title to the apples in question. His title depended upon the fact that the Growers' & Shippers' Exchange had transferred its title to the goods to him. But the title thereby acquired was subject to the possibility that the transfer might be avoided as preferential, at the instance of a trustee in bankruptcy of the seller, provided the petition in the bankruptcy proceed

ings, in which such trustee was thereafter appointed, was filed within four months after the transfer. Such right of action given by Bankr. Act July 1, 1898, c. 541, 30 Stat. 544, to the trustee, as between the trustee and the transferee, is quasi contractual in substance and effect. Cohen v. Small, 120 App. Div. 211, 105 N. Y. Supp. 287, affirmed 190 N. Y. 568, 83 N. E. 1123. As was said in that case :

"The Bankruptcy Law enters into the contract between a debtor and a creditor, and gives a right to the trustee in bankruptcy to recover from the creditor any payment made in violation of the Bankruptcy Law."

The right of the trustee in such case to avoid the transfer would thus seem to be, as the section of the Code above referred to phrases it, "connected with the subject of the action," which plaintiff seeks to maintain. It follows that, even if the action is to be treated as one at common law, the counterclaiin was properly interposed, and the defendant was entitled on the trial to have the issues raised thereby submitted to the jury.

The judgment and order should be reversed, and a new trial granted, with costs to appellant to abide event.

(160 App. Div. 316)

TOWN OF EASTON v. CANAL BOARD et al.

(Supreme Court, Appellate Division, Third Department. March 3, 1915.) 1. STATES w 191—SUIT AGAINST-CONSENT.

An action to compel a canal board to restore a bridge over the Barge Canal is not a suit against the state, requiring its consent.

(Ed. Note.-For other cases, see States, Cent. Dig. $$ 179–184; Dec.

Dig. Om 191.) 2. CANALS Cw17-RESTORING BRIDGES—MANNER OF WORK-DUTY OF BOARD.

Where, under the Barge Canal Act (Laws 1903, c. 147), a portion of a steel bridge is taken, it is requiring too much of the canal board to hold that the whole bridge must conform for its entire length in elevation, style, material, and construction with the steel spans remaining, since reasonable adaptation to the use required is sufficient. (Ed. Note.-For other cases, see Canals, Cent. Dig. § 25; Dec. Dig.

17.]

Howard, J., dissenting in part.
Appeal from Trial and Special Term, Washington County.

Action by the Town of Easton against the Canal Board, its members, and others. From a judgment for plaintiff, defendants other than the Town of Saratoga appeal. Affirmed.

Argued before SMITH, P. J., and KELLOGG, LYON, HOWARD, and WOODWARD, JI.

James A. Parsons, Atty. Gen., for appellants.
Rogers & Sawyer, of Hudson Falls, for respondent town of Easton.

William S. Ostrander, of Saratoga Springs, for defendant town of Saratoga.

SMITH, P. J. Between the town of Easton, in Washington county, and the town of Saratoga, in Saratoga county, the Hudson river sepem For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

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