Misc.] Municipal Court of New York, December, 1921. J. Sidney Bernstein, Abraham Leichter and Samuel Hellinger, for various landlords. Olcott, Bonynge, McManus & Ernst, Nordlinger & Riegelman, Clifford S. Bostwick, Lawrence E. Sherwood, Burger & Burger, Herman Bowsky and Seelav, Cohen & Brandt, for various tenants. DAVIES, J. These non-payment proceedings were brought to dispossess apartment tenants who had paid fixed rents under leases expiring September 30, 1921, of not less than one year's duration, and who now for the month of October, 1921, there being no contractual renewal, seek to interpose the defense of " able and unjust rent under oppressive agreements." unreason The landlords, relying upon chapter 434 of the Laws of 1921, move to strike out these defenses, and this court is called upon to decide whether said chapter has any application herein. The appellate decisions construing the housing laws of April, 1920, and September, 1920, had determined that any tenant under an agreement made after April 1, 1920, had a right at any time during the life of the laws, to interpose the statutory defense, and the court's duty was to fix the fair and reasonable rental. If the rent claimed was no greater than that paid within the preceding twelve months then the burden of proving the said defense was placed upon the tenant, otherwise upon the landlord. The 1921 legislature amended the housing laws in one respect by declaring that a judicial determination as to the fair and reasonable rental became binding as to successive rental periods until a change occurred in the situation of the premises; and in another respect by the enactment of chapter 434 with reference to said defense, the relevant part of which reads: Municipal Court of New York, December, 1921. [Vol. 117. "But such defense shall not be allowed if it appear that the defendant pursuant to the terms of such agreement has paid after the commencement of the term and after this section as amended takes effect three successive monthly installments of rent, which accrued after such agreement." As the counsel for the landlord here contends, the legislature intended to place some limitation upon the rent payment period during which the tenant must exercise his right to obtain a review of the reasonableness of the agreement. By its repeated use of the word " "it agreement" it clearly appears, however, that this limitation was intended to apply only during the life of the agreement in question. The landlord's contention is that Occupancy after the termination date of the lease herein, to wit, September 30, 1921, is that of a common-law holdover under implied agreement, and therefore bound by this chapter 434. Our Appellate Term (First Department) has, however, in Hall Realty Co. v. Moos, 115 Misc. Rep. 506 (Opinion by Guy, J.) stated that "Before the enactment of recent legislation the landlord would have had the option of treating the tenants either as trespassers or as tenants under a new hiring upon the same terms as the previous leases. By chapter 944, Laws of 1920, this right of the landlord has been suspended and a new form of tenancy created under which a tenant is permitted to remain in possession without permission of the landlord, and the landlord may bring an action to recover a fair and reasonable rent for the premises while in possession of the tenant. See Rogan v. Weiss, 115 Misc. Rep. 193. This action was therefore brought in proper form, and the contention of the defendants appellants that they must be treated either as trespassers, in which Misc.] Supreme Court, December, 1921. event the complaint should have been dismissed, or as tenants for a new hiring under the terms of their old leases, is erroneous." From this it will be seen that this tenant is not now holding by agreement but as a tenant under an emergency statute and chapter 434 of the Laws of 1921 has no application to him. The landlord's motion to strike out the statutory. defenses is therefore denied and the proceedings will be continued in accordance with the provisions of the housing laws. Motion denied. MARY ISABELLE NEILSON, Plaintiff, v. ELLA REALTY CO., INC., et al., Defendants. (Supreme Court, Bronx Special Term, December, 1921.) Mortgages-insurance covenant by mortgagor to keep premises insured for benefit of mortgagee is personal and does not run with the land - purchaser of real property not assuming payment of outstanding mortgage not bound by covenant in mortgage to insure statutory short form of mortgages held not to unsettle the accepted rule of covenants Real Prop. Law, § 254 (4). A covenant by a mortgagor to keep the premises insured for the benefit of the mortgagee is entirely personal in its character, does not affect the land or run with it, and is collateral and incidental to the remaining covenants in the mortgage. A real estate mortgage for $28,000 contained a clause to the effect that the mortgagor would keep the buildings on the premises insured against loss by fire for the benefit of the mortgagee and that the receipt of any such insurance money might be retained and applied by the mortgagee toward the payment of the mortgage debt or might be paid over either wholly or in part to the mortgagor, her executors, administrators, successors or assigns, to enable her to repair the buildings or erect new ones in their place, or for any other purpose or object satisfactory to the mortgagee, without affecting the lien of the Supreme Court, December, 1921. [Vol. 117. mortgage for the full amount secured thereby before such damage by fire or such payment over took place. After the assignment of the mortgage to plaintiff she conveyed the premises subject to mortgages aggregating $38,125, with accrued interest, and subject also to certain taxes and water rents. The grantee conveyed the premises "subject to existing encumbrances" to the defendant company, which was the owner of the premises until the sale thereof under a judgment entered in an action to foreclose the $28,000 mortgage, which sale resulted in the entry of a deficiency judgment of $6,000 in favor of the plaintiff, who was the purchaser at the sale, against the mortgagor who has since relieved herself of liability therefor through the intervention of bankruptcy proceedings. At all times during defendant's ownership of the premises it paid the premiums on three certain policies of fire insurance, each for three years, and permitting other insurance without notice until required, obtained for and delivered to it by W. who at all such times was its agent. Two of said policies, each for $10,000, loss if any payable to the mortgagee as interest may appear, and containing pro-rating clauses with other insurance on the premises, were delivered by defendant to the attorneys for plaintiff herein, at or about their date of issue. The third policy for $7,500 for three years contained no mortgage clause, the loss if any was not in terms made payable to the mortgagee, and the defendant company retained it. When all this insurance was effected and at all times down to and at the time when the buildings were destroyed by fire, the cash value thereof was $27,500. The total amount received by plaintiff upon the two policies delivered to her through her attorneys was $13,190.90, which payment and an assignment of a share in the bond and mortgage were made without the knowledge or consent of the defendant company or of W. In an action to impress a lien in favor of plaintiff upon the sum of $4,363.63 claimed to have been collected by W. on the $7,500 policy and turned over by him to the defendant company, held, that the defendant company not having assumed the payment of the mortgage and not having covenanted with either the mortgagee or plaintiff to keep the premises insured for their benefit, the rule that where a mortgagor has covenanted to take out insurance for the benefit of the mortgagee and then takes out insurance in his own name, the same will be impressed with an equitable lien in favor of the mortgagee in case of loss, did not apply. Misc.] Supreme Court, December, 1921. Although the defendant company was not bound to insure, upon its failure so to do plaintiff might procure such insurance from year to year, adding premiums to the mortgage debt. The stipulation as to the facts containing no admission on the part of either of the defendants, the executors of W. having been substituted as defendants in his place and stead, of any obligation by the defendant company to insure for the benefit of the mortgagee, the inference was not justified that the defendant company assumed the obligation to carry out the terms of the mortgage. In effecting the insurance, paying the premiums and delivering the two policies to plaintiff's attorneys, the defendant company complied with the insurance clause of the mortgage, but such compliance did not, in the circumstances, create a personal obligation to insure. Sheehan v. Spring Valley, etc., Corp., 194 App. Div. 119, followed. The statutory short form of mortgages (Real Prop. Law, 254(3), as amended by chap. 682 of the Laws of 1917) now section 254 (4) of the Real Property Law, the clear purport of which is to protect a mortgagee in every way possible, was not intended to overturn and unsettle a rule of covenants accepted in New York since 1882 and reaffirmed in Reid v. McCrum, 91 N. Y. 412, and upon the authority of that decision it was not the duty of the defendant company, under the mortgage, to take out insurance for the benefit of plaintiff, and the policy for $7,500 issued in favor of defendant did not inure to the benefit of plaintiff as the holder of the mortgage in question. Judgment directed in favor of all the defendants, upon the merits. ACTION to impress a lien in favor of the plaintiff as the holder of a mortgage upon certain proceeds of insurance on a building destroyed by fire. Scott, Gerard & Bowers (Spotswood D. Bowers, George A. Lewis and Stewart W. Bowers, of counsel), for plaintiff. Reuben Brown, for defendant Ella Realty Co., Inc. |