¶1The court below had jurisdiction to entertain the counterclaim interposed herein. (Monarch Associates v. Bork Mfg. Co., 195 Misc. 395, and cases there cited.) However, the record here presented does not sustain the trial court’s finding in favor of the undertenant Rubymar Corporation upon its counterclaim which is based on the alleged failure of the landlords to retain the security deposit under the lease separate from their own funds as required by section 233 of the Real Property Law. Under all the circumstances disclosed by the record, there should be a new trial.
¶2The final order, insofar as appealed from, and judgment should be unanimously reversed upon the law, and new trial granted, with $30 costs to landlords to abide the event.
¶3Fenxelly, Walsh and Beldock, JJ., concur.
¶4Final order and judgment reversed, etc.