Sire v. Rosenquest

Ingraham, J. (dissenting):

I cannot concur with Mr. Justice Rumsey. The reply to the defendants’ counterclaim alleged that, prior to the time when the plaintiff became the owner of the premises, the former owner thereof, to wit, Edward F. James, made an application of the amount of money deposited with him under the terms of the original lease, to wit, $6,000 and interest, in payment of the rents which were due and unpaid to him by the original lessees of the premises and the assignors of these defendants, so that no money remained on deposit or within the hands of the said original owner, Edward F. James, as security and unapplied in the payment of rent at the time when the plaintiff became the owner of the premises. Upon the trial the amount of rent for the two months sued on was admitted, and it was conceded that the defendants had not paid it.. The plaintiff then attempted to prove by the original lessor the application of this $6,000 to rent, but that testimony was objected to on the ground that the lessees with whom it was claimed the transaction took place were both dead and that the evidence was incompetent under section 829 of the Code of Civil Procedure. That objection was sustained. The defendant then called Henry E. Dixey, who had subsequently become the partner of the lessees and to whom an interest in this lease had been assigned. He testified that he was present at an interview between J ames, the original lessor, and Miles & Barton, the original lessees; that this interview took place after he had acquired an interest in the lease ; that it was caused because of a request of James to Dixey to indorse some notes held by James made by Miles & Barton ; that Dixey asked Miles & Barton "whether he (Dixey) should indorse these notes held by James, “ or why they should present it to me,” and Miles & Barton said, “ It is nothing to you; it is our business; we will take care of it.” They said that this $4,000 note was for rent before Dixey became interested -in the lease. Dixey was. asked whether they said anything about the $6,000 deposited, to which Dixey replied: “ They said they had used it up for rent and gave him the notes.” Upon being further asked, he testified: “Well, I don’t know whether they used the six thousand dollars, but they must have used up four thousand of it; that is the reason I asked them why they should give him- the four thousand dollars.” The witness further testified : “ What was said was that there was six thousand dollars on deposit, but they had used this six thousand dollars, or a portion of it.' I don’t know how much for back rent, and when this note came up they said they would look out for that because it was a portion of the six thousand dollars. That is’ as clear as I can give it.” It seems to me that this, testimony was insufficient, to sustain a finding that there was any agreement between James and Miles & Barton that the $6,000 which James held in his hands under this covenant in the lease should be applied to the payment of this rent which had been due prior to the time that Dixey acquired an interest in the lease and which was represented by the $4,000 note. The fact that Miles '& Barton made a note for this sum of $4,000, by which they promised to pay that amount to James and which James requested Dixey to indorse, contradicted any inference that there was an- agreement between Miles & Barton and James by which this amount of rent which was due and which was represented by the note, should be paid out of' the $6,000 deposited in James’ hands by Miles & Barton upon the execution of the lease. If the parties had agreed that $4,000 of this $6,000 so deposited should be used, the -application of that sum would have paid the rent, and Miles & Barton would not have been responsible for -it. The fact that Miles & Barton gave to James the noté would show that they were still liable for the rent and that it had not been paid by the application of any portion of the $6,000. Under the terms of the lease this sum of money was to be held by the landlord as security for the payment of the rent, and such deposit, with interest, was to be repaid by the application thereof on account of the rent accruing during the last year of the said term. Any one purchasing this lease would be -entitled to rely upon this covenant, that the sum of money was in the hands of the lessor, applicable to the payment of the last year’s rent, in the absence of some express agreement by which this clause in the lease was abrogated, so that the deposit should be applied, not to the payment of the last year’s rent, but to the payment of the rent accruing at a previous period.

This testimony of Dixey’s was, it seems to me, entirely insufficient to prove any such agreement. There was no admission that there had been any agreement between the landlord and the tenant by which the terms of the lease should be modified, and no such agreement was made in Dixey’s presence. ■ Dixey’s understanding of what they meant after this lapse of time is hardly competent evidence of such an agreement; and, as before stated, the taking of a note of Miles & Barton’s by James, the landlord, would he inconsistent with any agreement that the $6,000 on deposit had been applied to the payment of that hack rent. The burden of proof was upon the plaintiff to show that this $6,000 had been applied in pursuance of an agreement between the landlord and tenant, modifying the lease in respect to the deposit and the application to be made of it, and I cannot find in Dixey’s testimony any admission of' such an agreement, or anything from which such an agreement might be inferred. All that is said is that the $4,000 note was a matter that affected Miles & Barton, and not Dixey, and that they (Miles & Barton) would take care of it. Dixey also testified, in a rather incoherent way, to some other reference to the $6,000, which he first said had been used up, and he subsequently said, as he understood it, that they had used up this $4,000 for rent; Dixey then stated, probably giving his own conclusion, that that was the $4,000 which-went on the $6,000. James at that time said that he wanted the $4,000, or wanted Dixey’s indorsement upon the note of $4,000. James did not say anything about the $6,000 in his hands; and, finally, when the court asked the witness to give the substance of what was said about the deposit, Dixey said : “ What was said was that there was six thousand dollars on deposit, but they had used this six thousand dollars, or a portion of it, I don’t know how much, 'for back rent; and when this note came up they said they would look out for that, because it was a portion of the six thousand dollars. That is as clear as I can give it.” This does not seem to, me to be any evidence that there was any agreement between James and Miles & Barton that the amount of this note was to be paid out of the $6,000 held on deposit by James, but, on the contrary, it would appear that James insisted upon either the payment of the $4,000 or the indorsement of the note by Dixey, so. that he would become liable upon it; thus negativing the claim that he had agreed that this rent, represented by the $4,000, was to be paid by an application of the $6,000 on deposit in his hands.

Judgment and order affirmed, with costs.