
    Anna Lutz, Appellant, v. Joseph Goldfine, Respondent.
    (Supreme Court, Appellate Term,
    May, 1911.)
    Landlord and tenant — Rent and advances — Actions — Defenses.
    Modification and merger of contracts — Modification of written by oral contract — Performance of modified contract.
    Where a lease contains an agreement by the landlord to make certain repairs and have the same completed by a certain date and the tenant takes possession of the demised premises and occupies them, the breach of the landlord’s agreement to repair does not constitute a defense to an action for rent, though the tenant may counterclaim his damages or maintain a separate action to recover them.
    And where, in such a ease, after the execution of the lease under seal, it is agreed by parol that the tenant shall not pay rent until the repairs are made and the entire premises are delivered to him, such an agreement is valid only so far as the same has been executed hut is inoperative so far as it is executory.
    Appeal by the plaintiff from a judgment of the Municipal Court of the city of blew York; borough of Manhattan, fourth district, rendered in favor of the defendant, and also from an order denying plaintiff’s motion for a new trial. '
    Baldwin, Wadhams, Bacon & Fisher. (Wallace bT. Vreeland, of counsel), for appellant.
    S. Goodehnan, for respondent.
   Seabury, J.

This action was brought to recover rent reserved under a written lease between the parties. The denials contained in the answer did not put in issue the material allegations contained in the complaint. The answer, however, alleged new matter as a defense and coiinterclaim. The defendant withdrew the counterclaim and elected .to stand, upon the new matter pleaded as his sole defense to the action. The defense alleged is that, simultaneously with the execution of the written lease and as a part of the consideration for said lease, the plaintiff agreed to make certain repairs and alterations in said premises; that the repairs and alterations in premises 365 First avenue would be completed and the premises would be ready for occupancy on May 1, 19101; that the repairs 'and alterations in premises 367 First avenue would be completed and the premises would he ready for 'Occupancy on June 1, 1910; that the plaintiff has failed and refused to make the repairs and 'alterations agreed upon and has failed and refused to give the defendant the entire possession of the premises leased.

The evidence discloses that the defendant took possession of a part of the premises leased. The pnly evidence in the record to sustain the agreement alleged in the defense is the lease itself. Under the lease the landlord covenants to make repairs and alterations and to have the premises ready for occupancy at a time certain, and the tenant covenants to pay a sum certain at fixed periods as rent. Both' covenants are absolute and independent. Drago v. Mead, 30 App. Div. 258. As the tenant entered into possession of part of the premises, the landlord’s breach of his covenant to repair and make alterations and to have the entire premises ready -for occupancy at a time certain is no defense to this action.

In O’Brien v. Smith, 13 N. Y. Supp. 408, 409; affd., 129 N. Y. 620, it was said: “ The rule is well stated by Judge McAdam in his work on Landlord and Tenant (2d Edition, p. 142) as follows: (1) That if the tenant, by any wrongful act or neglect of the landlord, cannot get possession of the whole subject of the demise, he is not bound to accept a part thereof, and may, by declining to take part, plead the landlord’s wrongful 'act or neglect in defense of any action the landlord might bring to recover the rent. (2) If, however, the tenant accept part, he enters under the demise, and is liable on his covenant for the whole rent, unless the covenant to pay is made dependent on receiving possession of the whole. (3) The tenant’s remedy is to recover his damages arising from the failure to receive full possession, either by way of counterclaim to the original action for rent, or by way of an independent action.’ This doctrine is supported by the authorities.”

The breach of the landlord’s covenant to repair and make alterations is, likewise, no defense to this action. The tenant’s remedy is to recover his damages by way of counterclaim to this action or by way of an independent action. Lewis v. Ritoff, 51 Misc. Rep. 605; Kelsey v. Ward, 38 N. Y. 83; Thomson-Houston Electric Co. v. Durant Land Improvement Co., 144 id. 34, 47, 48; Myers v. Burns, 35 id. 269; Cook v. Soule, 56 id. 420; Reiner v. Jones, 38 App. Div. 441; Drago v. Mead, 30 id. 258.

In the application of these rules, the “ practical result is that the landlord, on the one hand, receives as rent all the tenant agreed to pay, while the tenant, on the other hand, recovers as damages a sum sufficient to make good his loss. In this way the obligations of the parties are fully satisfied by compensation fixed upon legal principles.” McAdam, Landl. & Ten. (4th ed.) 372.

The respondent contends, however, that he took possession of a part of the premises under a subsequent parol agreement which modified the terms of the sealed lease to the extent that he was1 to pay no rent until the repairs and alterations were made and the entire premises were delivered to him. This agreement was not pleaded, and it was error for the court to receive evidence of it over the objection and exception of the appellant. If this agreement had been pleaded, it would have been a good defense to this action if it had been executed.

In McKenzie v. Harrison, 120 N. Y. 260, 263, it is said:

We shall not question the rule that a contract or covenant under seal cannot be modified by a parol unexecuted contract. (Coe v. Hobby, supra; Smith v. Kerr, 33 Hun, 567, 57l; 108 N. Y. 31.) Neither shall we question the views of the court below to the effect that the alleged oral agreement in this case to reduce the rent $1,000 per year was void and inoperative in so far as it remained unexecuted. The lessors had the right to repudiate it at any time and demand the' full amount of rent provided for by the lease; but in so far as the oral agreement had become executed, as to the payments which had fallen due and had been paid and accepted in full as per the oral agreement, we think the rule invoked has no application. The reason of the rule was founded .upon public policy. It was not regarded as safe or prudent to permit the contract of parties which had been carefully reduced to writing and executed under seal to be modified or changed by the testimony of witnesses as to the parol statements or agreements of parties. Hence the rule that testimony of parol agreements shall not be competent as evidence to impeach, vary or modify written agreements or covenants under seal. But the parties may waive this rule and carry out and perform the 'agreements under seal as changed or modified by the parol agreement, thus executing both agreements, and where this has been done and the parties have settled with a full knowledge of the facts and in the absence of fraud, there is.no power to revoke or remedy reserved to either party.”

Upon a new trial, under an amended answer, the defense urged, by the respondent may be proved, provided the agreement alleged was executed, or damages may be recouped by way of counterclaim; but, upon the record before us, it is clear that the judgment must be reversed.

Judgment reversed and a new trial ordered, with costs to the appellant to .abide the event.

Lehman and Gerard, JJ., concur.

Judgment reversed.  