Giles v. . Austin

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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] No question can be made but that the terms imposed upon the plaintiff, as the condition of relieving him from the forfeiture which he had incurred, were as favorable to the landlord as he could reasonably demand, and fully indemnified him for the delay in the payment of the taxes and assessments, as well as the rent. The only points arising on this appeal which require consideration are: first, whether the relief sought by the plaintiff could be obtained in this action, or should have been sought by answer in the ejectment suit; and, secondly, upon the merits, whether the default of the plaintiff was so willful, or his neglect so inexcusable, that a court of equity should have denied him any relief.

As to the first point, it is claimed that a proceeding to be relieved from a forfeiture by an appeal to the equitable discretion of the court, and not by reason of any legal or equitable defence justifying the default, does not come within the provision of section 150 of the Code, which allows the defendant to set forth, by answer, as many defences and counter-claims as he may have, whether they be such as have been heretofore denominated legal or equitable, or both, nor within the provision of section 274, which authorizes affirmative relief to the defendant.

In Garner v. Hannah (6 Duer, 262, 273), it was decided by the General Term of the Superior Court that sections 150 and 274 were not applicable to such a case, and that although a lessee was entitled to be relieved in equity against a forfeiture incurred by the non-payment of rent and taxes, such relief could be obtained only by an independent action, and not by answer in an action of ejectment brought to enforce the forfeiture.

It is not necessary now to pass definitely upon that question, for it appears in the present case that the plaintiff was not in a condition to claim this equitable relief until after issue had been joined in the ejectment suit. It was after that that he paid up the arrears of taxes and assessments. If he desired to seek relief in the ejectment suit, he would have been obliged to apply to the court for leave to interpose a supplemental answer, which would have been in the discretion of the court; and with the decision of the same court, in Garner v. Hannah, standing unreversed, and as the law of that court, he could not reasonably have expected such an application to be granted. Even construing sections 150 and 274 of the Code as rendering it obligatory on the defendant to set up, by answer, any equitable defence or counter-claim, or right to affirmative relief, which he may have, under the penalty of losing it, that consequence should follow only where he has the absolute right to set it up, and not where it is in the discretion of the court to grant or deny him the privilege of doing so. In such a case, he also should have his election to resort to a new action.

The second point and the authorities bearing upon it are so fully discussed in the opinions of the learned referee, Judge MITCHELL, on the first trial, and of VAN VORST, J., upon the second trial, that we think it superfluous to do more than state our conclusions, which are, that covenants to pay taxes and assessments are in the nature of covenants to pay money, and that forfeitures incurred by their breach may be relieved against upon the same principles. By the payment of the amount due at any time before sale or the expiration of the right to redeem, the landlord is placed in precisely the same position as if no default had occurred; and where there is no bad faith on the part of the tenant, mere delay in making the stipulated payments should not bar him from relief.

The cases in which relief has been denied are either where the lessee has willfully committed some affirmative act in violation of his covenant, or been guilty of some default, the precise damages for which cannot be ascertained by any rule. But where the covenant is simply for the payment of money, the forfeiture is regarded as a security merely for such payment, and equity will not allow it to be enforced after the party has obtained all that it was intended to secure to him. (Story Eq. Jur., §§ 1314, 1315, 1316, and cases cited.) In the present case the taxes and assessments have all been paid, the landlord is awarded his rent and interest, and the costs and counsel fees incurred in the litigation, together with a small amount for damages which he claims to have incidentally sustained. All that the tenant has been guilty of is delay in making the payments, which delay he has endeavored to excuse, but for which he has been severely punished by being compelled to pay all the expenses which it has occasioned. No new rights have intervened, nor has the position of the parties been changed by the delay. Under these circumstances, we think the court had power to relieve the plaintiff from the further consequence of a loss of the residue of his term, and the valuable buildings he had erected on the premises, and that it has properly exercised that power.

The judgment should be affirmed with costs.

All concur.

Judgment affirmed.