Mercantile Exchange Leasing Corp. v. Astor-Broadway Holding Corp. , 3 A.D.2d 833 ( 1957 )

The deposit, which is the subject of the second cause of action of the complaint, falls within the category of money “ deposited or advanced on a contract for the use or rental of real property as security for performance of the contract” and defendant was obliged, upon receipt of the deposit to hold it in accordance with the mandate of section 233 of the Real Property Law. The commingling of the money deposited with its own funds was a conversion entitling plaintiff to recover the amount of the deposit. Plaintiff’s motion for partial summary judgment on the second cause of action should have been granted, and the action severed as to such partial summary judgment. We cannot agree, however, with plaintiff’s argument that establishing its right to recover the deposit under the second cause of action defeats defendant’s claim of breach of contract on plaintiff’s part in failing to perform its obligations under paragraph 40 of the lease. Defendant may amend its answer to plead a counterclaim for the alleged violation on plaintiff’s part of paragraph 40 of the lease, with respect to promotion of the premises. Order unanimously modified in accordance with the memorandum above and the action severed, with costs to the appellant. Settle order on notice. Concur ■—Peck, P. J., Breitel, Prank, Valente and McNally, JJ. [4 Misc 2d 135.]