35 A.D. 462 | N.Y. App. Div. | 1898
Lead Opinion
Lesster was not a necessary party in the suit brought to foreclose the plaintiff’s mortgage (Emigrant Industrial Savings Bank v. Goldman, 75 N. Y. 127), and his presence as a co-defendant has made much confusion, and has presented difficulties with which the several judges below have been obliged to contend in the course of this litigation. As a co-defendant he endeavored to have his rights determined in plaintiff’s suit instead of resorting to independent action. The receiver having been appointed without notice to him, and having collected the rents, Lesster, down to the time of the accounting, sought to compel payment of his claim by several summary applications.
Lesster has been at a disadvantage because of a confusion which seems to have arisen in the minds of the judges below, as well as. of the plaintiff’s attorney, resulting from a failure to apprehend the decision of this court upon the former appeal. On the previous appeal we were not called upon to decide, and did not decide, the merits of the conflicting claims to the fund as between the plaintiff and Lesster. The question before us was the proper form of an order directing a receiver in foreclosure proceedings, and we held that the provision in that order which directed payment to the plain- ■* tiff should be stricken out, and the rents collected should remain in the hands of the receiver. The question of the respective rights to-the fund not being before us, that determination was left open for such further application as either party might be advised to take in order to present the matter for decision.
The respondent strenuously insists that the failure of Lesster to appeal from the several orders denying his request for payment out of the rents collected by the receiver is fatal to his right to have the question presented on this appeal; but in none of Lesster’s previous applications had the merits been passed upon or his rights determined, and it was only upon the motions made subsequent to the confirmation of the referee’s report that such merits were determined and his claim denied. From the order thereupon entered this appeal was taken.
We are thus brought to a consideration of the title acquired by Lesster under his assignment of rents and the rights acquired by the plaintiff by virtue of the appointment of the receiver. The validity of Lesster’s assignment is not questioned, and it purports to assign and transfer “ the sum of two hundred dollars of the rents collected for each month until the said sum of twelve hundred and eighty-four dollars, with interest, has been fully paid.” Such payment, it appears, was being made without objection, and the debt thereby had been reduced to $773.98, when the receiver appointed on foreclosure of the plaintiff’s mortgage, without notice to Lesstqr, took possession of the premises and collected all rents.
We think that Lesster’s right to the rents is'plainly superior to the plaintiff’s. It is immaterial whether or not the plaintiff’s mortgage was executed prior to Lesster’s assignment. Even if that were so, it did not give the plaintiff a lien upon the rents. He obtained no right thereto until the appointment of the receiver (Ranney v. Peyser, 83 N. Y. 1), and this was long after the execution of the assignment.
The plaintiff relies upon the rule that a prior mortgagee obtains no fight to the rents of the premises as against the receiver for a junior mortgagee. (Ranney v. Peyser, supra.) There can be no
It is said that the assignment is a secondary security, to be resorted to only in case the proceeds of sale of the mortgaged premises should prove insufficient, and that there is no proof on this head. There is nothing in the assignment to warrant such a construction. It purports to be an absolute, primary security for the debt, and was so treated prior to the appointment of the receiver. The description of it in the appellant’s affidavits as a “further security” is perfectly compatible with this construction. It was a “ further ” security, but not a “ secondary ” one.
Finally, there is a denial in the plaintiff’s affidavits as to the amount due the appellant. This denial is upon information and belief, and the sources of information and grounds of belief are not given. It can have no weight as against the appellant’s positive affidavit as to what is still due him.
We think that the order should be reversed and the motion made . by Lesster for the payment of $773.38 from the funds in the hands of the receiver should be granted, with $10 costs in the court below, and with costs of this appeal.
Barrett and Rumsev, JJ., concurred; Ingraham, J., dissented.
I agree with Justice O’Brien. The view taken by the plaintiff of the assignment of the rents to Lesster is erroneous. That assignment ivas not within the Recording Act. It in no. wise affected the title to the land nor was it a lien or incumbrance thereon. ¡Neither the plaintiff nor Lesster acquired any right to the rents under their mortgages. The rents belonged to the mortgagor as incident to his ownership of the land. They were in fact personalty. He could at any time.before he was divested of his title dispose of these rents as lie pleased. And he did so dispose of them to Lesster by the assignment in question. It was under this assignment, and not under his mortgage, treated independently, that Lesster became entitled to these rents. As the person thus entitled, under the assignment, Lesster was neither a necessary nor a proper
I agree, therefore, to the reversal of the order and to a direction to the receiver, as indicated by Mr. Justice O’Brien.
Dissenting Opinion
I think this motion was properly denied. The defendant Lesster was a proper party defendant to this action, which was to foreclose a junior mortgage upon certain real property. At the time of the commencement of the action to foreclose Lesster was collecting the rents of the property under an agreement not recorded, which in effect assigned the rents to Lesster and authorized him to retain thereof $200 per month, to be received on account of a prior mortgage held by him upon the property.. Lesster was not a proper party as holder of a prior mortgage, but was a proper qiarty as being entitled to receive a portion of the rents under his unrecorded agreement with the mortgagor and under which he was collecting the rents of the property. That agreement was unrecorded, and unless the plaintiff had actual knowladge of its existence upon the record of his mortgage, under the Recording Act, his mortgage took priority over Lesster’s agreement, and that agreement was subject to it. When the action was brought, Lesster, being in possession of the property, was, as before stated, a proper party. Upon the motion of the plaintiff the court appointed a receiver of the mortgaged premises pending final judgment in this action. That order contained a provision that the receiver should pay the rents collected to the plaintiff. Lesster moved to vacate that order appointing a receiver, it having been made without notice to him, and upon that motion being denied appealed to this court where the order appointing the receiver was affirmed ; but the provision directing the pay
For this reason I think the order appealed from should be affirmed.
Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.