In re the General Assignment of Creditors of Ideal Reliable Sundries, Inc.

49 A.D.2d 852, 374 N.Y.S.2d 10, 1975 N.Y. App. Div. LEXIS 11016

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: October 21, 1975
• Status: Published

Opinion

Order, Supreme Court, New York County, entered on July 9,1974, granting the motion by the assignee for the benefit of creditors for a turn-over of moneys paid by the assignor, expunging respondent landlord’s claim as a general creditor and denying respondent’s cross motion for leave to file an amended proof of claim nunc pro tunc, unanimously modified on the law to the extent of denying the assignee’s application to expunge respondent’s claim for $7,684.05 and, as so modified, the order is otherwise affirmed, without costs and without disbursements. Respondent landlord admittedly was entrusted with $21,250, which it deposited in a regular commingled account. On this record we conclude, as did Special Term, that said sum constituted a security deposit, the commingling of which constituted conversion. (General Obligations Law, § 7-103.) However, respondent’s claim as a general creditor, in the sum of $7,684.05, should not have been expunged. A covenant to pay rent is independent from a covenant by the landlord to return a security deposit. Concur—Kupferman, J. P., Murphy, Lupiano, Tilzer and Capozzoli, JJ.