100 A.D.2d 609 | N.Y. App. Div. | 1984
In a consolidated action to recover damages for conversion and to foreclose a mortgage, Harriet Flyer, as custodian for Mark Flyer and Steven Flyer, Herman Ginsberg, Martha Gelb, and Tamara Ginsberg appeal, as limited by their brief, from so much of a judgment and order (one paper) of the Supreme Court, Kings County (McKennan, J., at trial; Tenney, J., on the judgment and order), entered January 26, 1983, as is in favor of Viñeta Hatton and against them in the aggregate sum of $11,735.45, and as dismissed the complaint of Flyer, Gelb and Tamara Ginsberg seeking to foreclose a mortgage. H Judgment and order affirmed, insofar as appealed from, with costs. 11 Viñeta Hatton is the owner of a certain multifamily dwelling in Kings County, purchased from Quad Realty Corp. (hereinafter Quad) in 1975. Pursuant to the terms of the contract of sale, she took title subject to a $40,000 mortgage on the premises made by Quad to Julja Equities, Inc. (hereinafter Julja) shortly before contract closing. The contract further required Hatton, at the mortgagee’s option, to deposit each month with the mortgagee one twelfth of the estimated annual real estate taxes, water and sewer charges, and fire insurance premiums with regard to the premises. At the closing, Mitchell Kaufman, a principal of both Quad and Julja, was designated as the person to whom Hatton was to make the monthly mortgage payments and the payments for water and taxes, sewer charges and insurance premiums. Various shares in the mortgage were then assigned by Julja to several persons, among whom are the appellants, with Julja retaining a small interest. U Hatton made the required monthly payments for several years until she learned that despite her deposit of the requisite funds with Kaufman, the real estate taxes on the property had not been paid. She subsequently entered into an agreement with the City of New York to repay the tax arrearage, and was informally given a moratorium on her mortgage payments while she was complying with this agreement. Some two years later, however, when the appellants requested that plaintiff honor her obligation to them, plaintiff refused to make any further payments. H Hatton then commenced an action to recover damages for the conversion of the fund for payment of the taxes, water and sewer charges and insurance premiums, naming Kaufman, the mortgagor, the mortgagee and all of the assignees as defendants. The mortgagee and its assignees subsequently brought an action to foreclose the mortgage. The two actions were thereafter consolidated. Trial Term held defendants in the conversion action jointly liable, and dismissed the foreclosure action. Appellants do not contest the liability of Kaufman, Quad or Julja, none of whom have appeared in the action, but they do contend that they should not be held responsible for Kaufman’s acts, and that, therefore, the foreclosure action should not have been dismissed. H “Agency is a fiduciary