We dissent and would affirm the judgment directed by Special Term.
Plaintiff entered into a written contract to purchase 1,540 shares of a co-operative apartment building for $154,000 and paid a deposit of $15,400 toward the purchase price. She deliberately and intentionally defaulted on the closing date, having given notice that she so intended. She did not then, nor does she now, advance any reason or excuse for her breach other than her view that the purchasé might have proven inexpedient in the light of the current business situation. She sues for the return of the deposit.
The question is whether she forfeits the deposit by virtue of the breach or is only liable for whatever damages the seller can establish. The first underlying factor in the resolution of that question is whether the sale should be considered as one of personalty or realty. If the latter, there is really no question at all because it is the established law of this jurisdiction that a prospective buyer of realty who breaches his contract of purchase forfeits all rights to any deposit made on account of the purchase (Lawrence v. Miller, 86 N. Y. 131; Cohen v. Kranz, 12 N Y 2d 242). Concepts of what is realty and what personalty are not static and are no exception to the proposition that the law accommodates to new developments as they occur. Co-operative apartments made their appearance long after classic distinctions between realty and personalty were formulated, and the guidelines to classification should be established by the inherent nature of the property right rather than mere superficial resemblances to other forms. This is no new idea. For instance, while a lease for 99 years is still a lease, it is nevertheless realty, because, despite the form, in actuality the leaseholder has all the attributes of ownership.
Applying the principle to the co-operative shares, it is at once apparent that the dominant characteristic of such shares is the right to a proprietary lease, which is the essential and particularizing aspect of such shares (Penthouse Props. v. 1158 Fifth Ave., 256 App. Div. 685, 692) distinguishing them from the ordinary evidences of corporate stock ownership. While the owner does not acquire a fee in the apartment, he does possess so many of the rights and obligations peculiar to fee ownership that the status is for practical purposes indistinguishable. To name a few of these which have received statutory or decisional recognition: The shareholder has been authorized to bring summary eviction proceedings to obtain possession (Curtis v. Le May, 186 Misc. 853). The Statute of Frauds applicable to real estate *174transactions applies to sales of co-operative stock (Frank v. Rubin, 59 Misc 2d 796). The stock has been treated as realty in determining the priority of judgment and tax liens (Matter of Lacaille, 44 Misc 2d 370). Federal and New York State income tax laws give the same privileges to co-operative share owners as they do to fee owners in many respects (see U. S. Code, tit. 26, § 121, subd. [d], par. [3]; §§ 216,1034, and New York Tax Law, § 360, subd. 12). In addition, alienability, liability for maintenance and repairs, as well as the privileges of making interior alterations, give a popular recognition to the status of realty quite in accord with the decisional law which treats this type of property as realty.
However, even if the shares be regarded as personalty under the common law of this State, the deposit is not recoverable (Kaplan v. Scheiner, 1 A D 2d 329; Waldman v. Greenberg, 265 App. Div. 827). It is claimed that this has been superseded by statute, article 2 of the Uniform Commercial Code. That article has no application. It refers to ‘ ‘ goods ’ ’, which by definition (§ 2-105) excludes “ investment securities and things in action.” If this sale is regarded as a sale of the stock, it is excluded as a sale of an investment security; if it be regarded as a sale of the proprietary lease, with the stock being only incidental, it is excluded as the lease is plainly a thing in action. The article having no application, the common-law rule continues.
The order and judgment should be affirmed.
Markewich, J. P., and Nunez, J., concur with Murphy, J.; Steuer, J., dissents in an opinion in which Eager, J., concurs.
Order, Supreme Court, New York County, entered on October 6, 1970, reversed, on the law, defendant’s motion denied, and plaintiff’s cross motion for summary judgment granted, and the judgment of said court entered thereon on October 30, 1970 is reversed, on the law, and vacated. The matter is remanded to the trial court for a hearing with respect to damages, if any. Appellant shall recover of respondent $50 costs and disbursements of this appeal.