Art. 8. Principal and Agent.

Cow. 57; First Nat. Bank of Meadeville v. Fourth Nat. Bank, 77 N. Y. 320.

An agent is liable to his principal for the loss resulting from disobedience to his instructions. Rundle v. Moore, 3 Johns. Cas. 96; Heinemann v. Heard, 50 N. Y. 27; Laverty v. Snethen, 68 N. Y. 522; Johnson v. N. Y. Cent. R. R. Co., 33 N. Y. 610; Perkins v. Washington Ins. Co., 4 Cow. 645.

SUBDIVISION 4.

Right of Principal to Follow Funds Diverted by Agent.

The general and well-recognized rule is and has been, that a principal is entitled in all cases when he can trace his property whether it be in the hands of his agent or of his representatives, or of third persons, to reclaim it; and it is immaterial that it may have been converted into money, so only that it is in condition to be distinguished from the other property or assets of the agent. Importers, etc., Bank v. Peters, 123 N. Y. 272, 277, 278.

The cases upon this head are very numerous, where there has been a misapplication of trust funds by trustees or persons standing in a fiduciary relation, and the money or property has been laid out in land or converted into other species of property. The court in such cases lays hold of the substituted property and follows the original fund, through all the changes it has undergone, until the power of identification is lost or the rights of bona fide purchasers stop the pursuit, and holds it in its grasp, to indemnify the innocent victim of the fraud." American Sugar Refining Co. v. Fancher, 145 N. Y. 552 (557).

While to entitle a principal to recover money wrongfully paid by his agent upon a debt of the latter, he must show that the creditor knew that the agent was acting in violation of his authority, knowledge that the money was held by him as agent is sufficient to establish this prima facie, as the legal presumption is that an agent has no authority to dispose of the property of his principal in payment of his own debt.

One, therefore, who receives such payment, with knowledge that the money was held by his debtor as agent, does so at his peril, and to defeat a recovery must show authority in the agent to so dispose of the money. Gerard v. McCormick, 130 N. Y. 261.

The payee of corporate checks who receives them from the treas

Art. 9. Landlord and Tenant.

urer of the corporation in payment of a debt not owed by the corporation, but in payment of one which he has treated as the treasurer's individual debt, where the latter has no actual or apparent authority to issue such checks either in payment of his own debt or that of a third person, is chargeable with notice of his incapacity to issue them and is bound to inquire as to the real situation, and where he accepts the checks without question and draws the money thereon, he is liable in an action by the corporation to recover the amount paid as money received by him to its use. Rochester & C. T. R. R. Co. v. Paviour, 164 N. Y. 281.

It is well settled that where one occupies the relation of agent to another, and in that relation makes an investment for such other, with the money of his principal, the principal is entitled, not only to the property bought, but to the proceeds of that property so long as it can be traced and identified. Harding v. Field, 1 App. Div. 391 (393), 37 N. Y. Supp. 399.

ARTICLE IX.

LANDLORD AND TENANT.

SUBDIVISION 1. Liability of landlord to tenant ...

PAGE.

102

2. Rights of third persons against landlord... 104 3. Rights of third persons against tenant..... 105 4. When both landlord and tenant are liable to

third persons

SUBDIVISION 1.

Liability of Landlord to Tenant.

107

As between landlord and tenant, there is no implied obligation on the part of the former that the property is in a safe condition. With regard to third parties, the tenant is the person responsible for any injury resulting from the premises being out of repair, and the landlord will also be responsible if he has done any act authorizing the continuance of the dangerous state of the house. Moak's Underhill on Torts (Rule 22), citing Keates v. Cadogan, 10 C. B. 591; 20 L. J. C. P.; Pretty v. Bickmore, L. R., 8 C. P. 404, 6 Eng. Rep. 182.

If premises are in good repair when demised, but afterward become dangerous, the landlord is not responsible therefor to the occupant, unless he has expressly agreed to repair, or has renewed

Art. 9. Landlord and Tenant.

the lease after the need of repair has shown itself. This rule holds as to the lessee out of possession who sublets to another who is in possession. Clancy v. Byrne, 56 N. Y. 129.

A lessor of buildings, in the absence of fraud, or any agreement to that effect, is not liable to a lessee, or others lawfully upon the premises, for their condition, or that they are tenantable and may be safely and conveniently used for the purposes for which they are apparently intended. Jaffe v. Harteau, 56 N. Y. 398.

There is no implied warranty upon the demise of real estate that it is fit for occupation or suitable for the purpose for which it is leased. But where the owner leases premises knowing they are dangerous and unfit for the use for which they are hired, and fails to disclose their condition, he is guilty of negligence and may be held responsible for injuries resulting therefrom.

If he has created no nuisance and is guilty of no wrong or fraud, or culpable negligence, he is not liable for the injury suffered by a person occupying or going upon the premises during the term. Edwards v. N. Y. C. & H. R. R. R. Co., 98 N. Y. 245.

While, as a general rule, a landlord, in the absence of any agreement or fraud, is not liable to the tenant for the condition or tenantable use of premises demised, that rule is subject to exception.

If the premises are in such a dangerous condition as to constitute a nuisance at the time of the renting, the landlord remains liable for the consequences of the nuisance, notwithstanding that his lessee may also be liable. If the premises are rented for a public use for which the landlord knows they are unfit and dangerous, he is guilty of negligence and may become responsible to persons suffering injury while rightfully using them. Barrett v. Lake Ontario Beach Improvement Co., 174 N. Y. 310, citing Jaffe v. Harteau, 56 N. Y. 398; Swords v. Edgar, 59 N. Y. 28; Fox v. Buffalo Park, 21 App. Div. 321, 47 N. Y. Supp. 788, affirmed 163 N. Y. 559; Edwards v. N. Y. & H. R. R. Co., 98 N. Y. 245.

In Rauth v. Davenport, 60 Hun, 70, 14 N. Y. Supp. 69, it was held that where the property of a tenant had been damaged by rain from a defective roof, which was under the control of the landlord, who promised to repair it properly, in consideration of which promise tenant consented to remain in occupation of the premises, the tenant could recover, because of such promise, the damages resulting to him from a subsequent rain.

Art. 9. Landlord and Tenant.

This case was distinguished in Bronner v. Walter, 15 App. Div. 295 (297), 44 N. Y. Supp. 583, where it was held that a landlord is not bound to repair the roof of a demised dwelling, unless he covenants to do so, and his mere promise subsequent to the lease to make repairs is without consideration.

A landlord cannot be compelled to rebuild or repair a building for the benefit of his tenant, unless he has expressly covenanted to do so. In an action to recover for damage to plaintiff's goods by reason of the failure of the landlord to proceed with due diligence to repair, it was held that he was not bound to protect the tenant's property from the weather. Doupe v. Gerrin, 45 N. Y. 119.

SUBDIVISION 2.

Rights of Third Persons against Landlord.

If premises are in good repair when demised, but become dangerous during the term, the landlord is not responsible therefor to the public unless he has expressly agreed to repair, or renewed the lease after the need of repair has shown itself. This rule applies to the lessee out of possession, who has sublet to another, who is in possession, and this is so, although by his covenant with his landlord such lessee is bound to make all ordinary repairs; the covenant does not give a right of action to, or impose a liability in favor of a stranger. Clancy v. Byrne, 56 N. Y. 129.

But where the premises are out of repair at the time they are leased, in particulars which the landlord is bound as against third persons not to allow, the landlord is liable for any injuries sustained by third persons from want of such repair. Swords v. Edgar, 59 N. Y. 28; Waggoner v. Jermaine, 3 Den. 306; Irvine v. Wood, 51 N. Y. 224.

Where the owner of premises knows, or by an exercise of reasonable care can ascertain, that they have upon them a nuisance dangerous to the public and adjoining owner, it is his duty to abate it before leasing the property; if he leases without doing this, he is liable to respond in damages to any one injured in consequence of the nuisance; and this is so, although he did not create the nuisance. Timlin v. Standard Oil Co., 126 N. Y. 514.

In Reynolds v. Van Beuren, 155 N. Y. 120; Sterger v. Van Sicklen, 132 N. Y. 499, the question as to whether a landlord's covenant to make repairs to premises shall inure to the benefit of

Art. 9. Landlord and Tenant.

a stranger, is considered and authorities cited, and it is held that such covenant does not inure to the benefit of the stranger sustaining an injury because of its breach.

Toward the general public represented by the municipality, an implied duty rests upon the owner to use reasonable care in inspecting and repairing a grate, constructed by him with the consent of the municipal authorities, in a sidewalk in front of his premises, when a part only of the structure on the abutting land is leased to and occupied by a tenant, but that part includes by implication the exclusive right to use the grate as a beneficial appurtenance. Trustees of Canandaigua v. Foster, 156 N. Y. 354.

In Jennings v. Van Schaick, 108 N. Y. 530, it was held that although the rule is that when a landlord lets premises to a tenant, the landlord reserving no control, and the tenant carelessly leaves open the coal-hole, whereby some one is injured, the tenant, and not the landlord, is liable; that when the building is rented in flats and apartments, and the owner remains in control to some extent, and controls the coal-hole, and the opening in the sidewalk thereto, and through negligence, in leaving the opening open and unguarded, an injury occurs, the owner is liable. Cited with approval in Babbage v. Powers, 130 N. Y. 281 (288).

In both cases the effect of permits by a municipality to construct a vault under the sidewalk, upon the question of nuisance, is considered and determined. See also, as to the latter principle, Jorgenson v. Squires, 144 N. Y. 280.

SUBDIVISION 3.

Rights of Third Persons against Tenant.

Generally and prima facie, where lands are in the occupation of a tenant, he alone is responsible for any nuisance thereon arising from their being out of repair. The landlord is only liable where he demised the premises with the nuisance thereon, or covenanted to repair. A grantee or devisee of premises, upon which there is a nuisance at the time the title passes, is not responsible therefor until he has had notice thereof. The authorities on the subject of the liability of the owner of demised premises for a nuisance thereon are collated and considered. Ahern v. Steele, 115 N. Y. 203.

A tenant who sublets premises knowing, or being chargeable