Prior to the enactment of section 233 the relationship of the landlord and tenant with respect to the deposit of security under a lease was held to be that of debtor and creditor in the absence of a provision or stipulation that the deposit of the security should be held intact or should constitute a trust fund (Malco Trading Corp. v. Mendelson-Silverman, Inc., 240 App. Div. 322; Rambach v. Heights Theatres, 239 App. Div. 203; Jahmes Co. v. Propper, 238 App. Div. 326; Levinson v. Shapiro, 238 App. Div. 158).
It seems clear, therefore, that plaintiff may only recover, in conversion, by virtue of the provisions of section 233 creating the deposit of the security a trust fund and creating the recipient thereof a trustee, prohibiting the mingling of such deposit with the funds of the recipient and declaring absolutely void any waiver of the provisions of said law.
Defendants assert that section 233 has application only to deposits of security made under leases relating to real property situated in this State, and that it has no application to a deposit of security made under a lease relating to real property located outside the State.
Upon the motion to dismiss the original complaint the view was expressed that section 233 was only applicable to deposits of security made under leases relating to real property located in this State and that the act had no extra-territorial effect.