premises being occupied by Liesenfeld's tenants, who had a lease on the place. The exchange of property was not effected. The plaintiff thereupon brought this action to recover from the defendants his commission of 3 per cent. on the $8,000, defendants' contract selling price. Defendants denied liability.

It appeared upon the trial that, four months before plaintiff's conversation with defendants, he had had 103 Thompson street for sale or exchange for Liesenfeld under an arrangement whereby Liesenfeld was to pay plaintiff $300. It also appeared upon the trial that on November 22, 1922, Liesenfeld had leased 103 Thompson street for two years; that this lease had been written by plaintiff, who had knowledge of its terms; that the lease was in force at the time of the trial, and two or three assignments thereof had been approved by Liesenfeld. From the fact that defendants asked plaintiff for a soft drink place that was for sale, that the plaintiff stated that he had such a place for sale, and that the plaintiff prepared the written contract providing possession April 20, 1923, it must be assumed that the defendants employed plaintiff either as broker or middleman to procure a soft drink place for their possession April 20, 1923. The plaintiff, knowing that Liesenfeld's 103 Thompson street was under lease for two years, was called upon to reveal that fact to the defendants, if it was to be claimed that the making of the two contracts between the defendants and Liesenfeld was a performance of the contract between defendants and the plaintiff, entitling plaintiff to his commission. The first suggestion in the record that the defendants had any knowledge of the existence of a lease of 103 Thompson street is the occasion, on April 20, 1923, when defendants declined to convey for that reason, among others.

[1] Ordinarily a broker, who brings to his customer a purchaser who is ready, able, and willing to make the purchase at the seller's price, has earned his commission. Ordinarily a broker has earned his commission when the seller and purchaser enter into a contract to sell and purchase. If from a refusal to consummate the contract on the part of the purchaser, for any reason in no way attributable to the broker, the sale falls through, nevertheless the broker is entitled to his commission, for the simple reason that he has performed his contract. Gilder v. Davis, 137 N. Y. 504, 33 N. E. 599, 20 L. R. A. 398.

[2] The plaintiff alleges that he was employed by defendants as their agent to sell or exchange 23 Sunnyside, and agreed to pay him 3 per cent. commission on any amount procured by him and accepted by the defendants for the sale or exchange. He has proved that he procured for the defendants, in exchange for 23 Sunnyside, 103 Thompson street, possession of which was denied them for 17 months, which they refused to accept for that reason, among others. Plaintiff has also proved that he knew that defendants would not be entitled to possession at the time he made his contract of employment, and that he did not mention that vital and essential fact. The fact that the written contract between defendants and Liesenfeld provides that possession was to be given April 20, 1923, is proof that defendants would not have made those contracts, had they then known that their possession of 103 Thompson street was to be postponed for 17 months. The

(202 N.Y.S.)

consummation of the contracts to exchange was prevented by the concealment by the plaintiff of the existence of the lease on 103 Thompson street at the time they were made, or else the defendants were induced to make the contracts by such concealment. The reason why the contracts were not consummated being attributable to the plaintiff, he has not performed his undertaking-has not earned his commission. The judgment appealed from is reversed, and a new trial ordered in the City Court, with costs of this appeal to the appellant.

(207 App. Div. 304)

ARMSTRONG v. SHAPIRO et al.

(Supreme Court, Appellate Division, First Department. December 14, 1923.) Courts 183-County Court cannot decree specific performance of option for new lease.

Where an option, executed after a lease, gave tenant the right to have a new formal lease executed at the expiration of the term at a different rent, the County Court, in summary proceedings against the tenant as holdover, did not have jurisdiction to dismiss landlord's petition on the merits on the ground that tenant had exercised his option, which in effect decreed specific performance of the option, since the County Court has no such equitable jurisdiction.

Appeal from Bronx County Court.

Action by John L. Armstrong, landlord, against David Shapiro, tenant, and others. From a final order of the County Court (119 Misc. Rep. 522, 196 N. Y. Supp. 630), in a summary proceeding dismissing landlord's petition on the merits, tenant appeals. Reversed, and final order directed, awarding petitioner delivery of possession of the property.

Argued before CLARKE, P. J., and DOWLING, FINCH, McAVOY, and MARTIN, JJ.

Frederick N. Van Zandt, of New York City, for appellant.

Bernard S. Deutsch, of New York City (Ernest P. Seelman, of New York City, on the brief), for respondent.

DOWLING, J. A written agreement of lease, dated January 11, 1917, was entered into between Mary Armstrong and John L. Armstrong, as executors of and trustees under the last will and testament of John Armstrong, deceased, and David Shapiro, by the terms of which the premises known as No. 4203 Third avenue, in the borough of the Bronx, city of New York, were rented to Shapiro for the term of five years, commencing on the 1st day of April, 1917, and ending upon the 31st day of March, 1922, upon the terms, covenants, and conditions specifically set forth therein. Shapiro took possession of the demised premises under the lease.

Thereafter, on February 24, 1917, said Mary Armstrong and John L. Armstrong, as said executors and trustees, executed and delivered to said David Shapiro an instrument which granted said Shapiro an optional right to a further lease of said premises for five years from

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes 202 N.Y.S.-20

April 1, 1922, at the yearly rent of $1,740, upon the same terms and conditions in other respects as contained in the lease then in force, but upon the express conditions precedent "that David Shapiro, or his legal representatives, faithfully perform and carry out all the covenants and conditions on his or their part to be performed, contained in a certain lease, made, executed and delivered by us, to said David Shapiro for five (5) years from April 1, 1917, to April 1, 1922, covering the premises known and designated as No. 4203 Third avenue," and further providing:

"If the said David Shapiro or his legal representatives shall elect to exercise this option, they shall serve a written notice to this effect on the undersigned, not later than January 1, 1922, and a formal lease for such further period shall be prepared and executed by all the parties thereto on or before February 1, 1922; otherwise, this option shall become null and void and of no effect."

The written agreement of lease covering the premises in question contains, among others, the following covenants to be performed by the tenant:

(a) "Nor let or underlet the whole or any part of the said premises" (this clause was stricken out in the duplicate original lease offered in evidence by the tenant); (b) "nor permit the same to be occupied or used for any business deemed extrahazardous on account of fire or otherwise;" (c) "nor suffer or permit their use for any business or purpose which would cause an increase in the rate of fire insurance on said building;" (d) "shall and will make and keep said premises including the roof in good order and repair both ordinary and extraordinary during the term;" (e) "to use said rented premises for the glass business and for dwelling purposes or lofts and agrees that he will not let or sublet the store or any part of said premises for the liquor business, moving picture or show business, or for the sale of paints.

Having entered into the occupation of said premises under said agreement, Shapiro continued in possession on and after the 31st day of March, 1922, and at the time of the trial of this proceeding, September 11, 1922, was still in occupation thereof. On September 19, 1921, David Shapiro entered into an agreement in writing with Isaac Lipton, by the terms of which he undertook as landlord of said premises to let the same unto Isaac Lipton for a term of five years commencing on the 1st day of April, 1922, and terminating on the 31st day of March, 1927, "for the sale of paints and painter's supplies and for dwelling purposes of lofts, but shall not use the said building or premises for the sale of liquors or for moving picture or show business or for factory purposes necessitating the use of heavy machinery," at an annual rental of $3,000, payable in equal monthly installments.

After entering into the agreement to lease, Shapiro sent the following letter to the landlords:

"Oct. 5, 1921.

"Mary Armstrong and John L. Armstrong, as Executors, etc., % Mrs. M. Armstrong, 383 Selye Terrace, Rochester, N. Y.-Dear Sir and Madam: Pursuant to the terms of our lease and the agreement supplemental thereto, I beg to advise you that I do hereby exercise and elect to exercise my option for a further lease of premises No. 4203 Third Avenue, the Bronx, for a period of five years from April 1, 1922, the date of the expiration of my present lease, at the yearly rent of $1,740, payable monthly in advance, upon the same terms

(202 N.Y.S.)

and conditions in other respects as contained in the present lease, and I am prepared to execute a formal lease for such further period at once. Please attend to this matter and oblige,

"Very truly yours,

To this the landlords replied as follows:

D. Shapiro."

"Oct. 11, 1921.

"Mr. D. Shapiro, New York City--Dear Sir: Your registered letter received and contents noted. We are taking same under advisement and am writing Mr. Woodall, and if we find same has been kept in good repairs and according to agreements we will go ahead with same.

"Yours truly,

J. L. Armstrong."

After Shapiro took possession of the premises, he let or underlet part of said premises from time to time to various persons between the 1st day of April, 1917, and the 31st day of March, 1922, without the written consent of the petitioners, including sublettings to one or more of his sons, who conducted a separate business in part of said premises under the name and style of D. Shapiro Sons; also during the term of said written agreement of lease, and particularly during the year 1917, and part of the year 1918, the said David Shapiro let or underlet a part of said premises to a tenant for the purpose of conducting, and who did conduct, a liquor business therein during said period; further, since the year 1918, David Shapiro has conducted in a part of said premises a business for the sale of paints, in connection. with which paint was purchased and kept in and sold from said premises until March, 1922.

The trial court has found as a fact that the aforementioned subletting of premises by Shapiro was with the knowledge, consent, and acquiescence of the petitioners, and that rent was accepted by them after knowledge of such facts, and after knowledge of the fact that Shapiro had entered into said written agreement of lease with Isaac Lipton, and that prior to February 1, 1922, Shapiro had made substantial repairs and had not breached his covenant with respect thereto. The landlords never executed a new lease to Shapiro, who remained in possession, whereupon the former brought summary proceedings against the latter as a holdover.

The answer of the tenant set up as a separate defense the making of the lease in writing on January 11, 1917, and the making of the option agreement by the landlords on February 24, 1917,

"whereby the said landlords granted unto this defendant an option for a further lease of said premises for an additional term of five years from April 1, 1922, at the yearly rent or sum of $1,740, payable monthly in advance upon the same terms and conditions in other respects as contained in the said lease hereinbefore referred to."

It then set up the provision in said option agreement whereby"in the event that the said tenant or his representatives shall elect to exercise this option, they shall serve a written notice to such effect on the landlords by registered mail not later than January 1, 1922."

It then avers that, pursuant to the agreement,

"this tenant did, on or about the 5th day of October, 1921, notify the landlords in writing that he, the said tenant, elected to exercise the said option for

a further period of five years from April 1, 1922, in accordance with the terms and provisions of said option agreement, and further notified the said landlords that he was prepared to execute a formal lease for such further period at once.

"Fifth. That by reason of the foregoing the term of this tenant has not yet expired.

"Wherefore tenant demands judgment, dismissing the petition of the landlords, with costs."

It thus becomes apparent that the defense asserted was a purely equitable one, and that the landlords were entitled to possession of the premises, as against the tenant as a holdover, unless such a defense was sustainable. The learned trial court recognized this, and as part of his decision made the following finding:

"(13) That the tenant is now in possession of the said premises, and has been in said possession since April 1, 1922, by right of the said option agreement executed on the 24th day of February, 1917, and by virtue of said option agreement, was entitled and is entitled to a lease from the said landlord for a period of five years from April 1, 1922, and as a conclusion of law, that the petition of the landlord for a judgment and final order herein, must be dismissed upon the merits, and that the tenant, by reason of the facts aforesaid, should have judgment in his favor upon the merits upon the defense interposed by him that he has the right to the possession of said premises from and after April 1, 1922, by virtue of the option agreement of February 24, 1917, and by virtue of his right thereunder, to a new lease from February 1, 1922, to and including March 31, 1927."

So that the learned trial court in effect decreed specific performance of the option agreement for a new lease. That this cannot be done in a summary proceeding was decided by this court in Simon v. Schmitt, 137 App. Div. 625, 626, 122 N. Y. Supp. 421, 423, wherein Mr. Justice Miller said:

"On the 6th day of April, 1909, the respondent began an action in the Supreme Court against the petitioner to compel specific performance of the covenant above quoted. After the expiration of the term provided for by the lease, this proceeding was instituted to remove the respondent on the ground that he was holding over after the expiration of his term without the permission of the landlord. As a defense, the respondent claimed to be entitled to specific performance of the said covenant for a new lease, and the final order of the Municipal Court provides that the respondent is 'entitled to the appointment of appraisers as provided for in the said lease mentioned in the petition, and to a renewal of said lease if he accepts the result of the appraisal,' and that he is entitled to retain possession until specific performance shall be decreed. It is a somewhat startling proposition that the Municipal Court can adjudicate a party's right to specific performance of a contract. If the Municipal Court had jurisdiction to pass upon the equitable defense interposed in this case, its judgment, even without the provision above quoted, would be conclusive, and the court having jurisdiction to decree specific performance would have to direct the entry of a decree upon proof of the judgment. It is true that section 2244 of the Code of Civil Procedure provides that the answer to a petition in summary proceedings may set forth 'a statement of any new matter constituting a legal or equitable defense or counterclaim.' But that section must be read in connection with article 6, section 18, of the Constitution, which provides: "The Legislature shall not hereafter confer upon any inferior or local court of its creation any equity jurisdiction or any greater jurisdiction in other respects than is conferred upon County Courts by or under this article.' It is said that the trial of the questions of fact and law upon which the right to specific performance depends, and the adjudication of such right is not the exercise of equitable jurisdicton so long as a