292 N.Y. 286 | NY | 1944
Our inquiry goes to the sufficiency of the complaint in this action.
From that pleading it appears that the plaintiff-appellant is the receiver of rents in an action to foreclose a certificated mortgage upon premises known as No. 405 East Broadway in the City of Long Beach. Against the mortgaged premises was an outstanding tax lien owned by the defendant City which lien, with accrued penalties, amounted to $3,347.60. In an effort to avoid the accrual of additional penalties the plaintiff arranged to take advantage of statutes which authorize the city, upon resolution of its council, to cancel penalties and interest on unpaid taxes levied on real property prior to April 1, 1940, provided such taxes are paid within one year. (L. 1934, ch.
"Second. Should the party of the first part fail to pay any installment and/or interest upon the due date thereof, and if such default shall continue for a period of ten days, then and in that event, this agreement shall cease, terminate and come to an end without notice, and all the rights and benefits accruing hereunder to the party of the first part shall be extinguished,and all moneys paid under this agreement shall be applied onaccount of and in reduction of the aforesaid tax lien togetherwith all interest, penalties and charges as hereinafter setforth.
"In the event of the failure of the party of the first part to comply with the terms and conditions of this agreement, then and in that event the making of this agreement shall not be deemed to in any way impair any of the rights and powers of the City of Long Beach or the Treasurer thereof contained in any general or special act including the Charter or Local Laws; but such rights and powers shall remain in full force and effect and the City Treasurer of the City of Long Beach shall enforce the collection of such tax lien together with the full amount of interest, penalty and other lawful charges in accordance with the provisions of such laws, crediting to the party of the firstpart any and all sums paid hereunder, * * *." (Italics supplied.)
In accord with this agreement the plaintiff paid to the City eight installments aggregating $2,687.91. He failed to pay the last two installments. As a result of such default the City in August, 1938, sold the tax lien at its face value plus interest and advertising costs, amounting in all to $3,496.60. In making such sale the City did not credit the sum of $2,687.91, being the total amount of the eight installments previously paid by the plaintiff in reduction of the tax lien. Subsequently, and after the City had refused the plaintiff's demand that it return to him $2,687.91, the plaintiff instituted the present action for restitution of that sum. Thereafter the County Court of Nassau County denied a motion by the defendant to dismiss the complaint *290 under rule 106, subdivision 5, of the Rules of Civil Practice. The Appellate Division reversed on the law the order of the County Court, two justices dissenting, and directed that the complaint be dismissed.
The default by the plaintiff, after making eight installment payments, afforded the City a legal basis for a sale of the tax lien but only "* * * for the unpaid balance of such taxes together with any interest or penalties thereon and any other charges allowed by law." (L. 1935, ch.
If we accredit the allegations of the complaint, as we must do in our review of the order before us, we must treat as a fact the plaintiff's allegation that the defendant City and its treasurer wrongfully failed to use the installment payments made by the plaintiff for the purpose of reducing the amount of the City's lien. Indeed, the City in its brief filed as respondent upon this appeal concedes that — "In making such sale * * * the treasurer inadvertently sold the property for the full amount of the taxes without crediting the installments paid thereon by the plaintiff."
Our problem would be different if the installment payments made by the plaintiff had been used by the City for the purpose contemplated by the contract and the statute — viz., the reduction of the City's tax lien. In such a case restitution may be denied. (Redmond et al., v. Mayor, etc., of New York,
We are mindful of the rule that one who breaches an executory contract may not recover the amount paid thereunder. (Lawrence
v. Miller,
The judgment of the Appellate Division should be reversed and the order of the County Court affirmed, with costs in this court and in the Appellate Division.
LEHMAN, Ch. J., LOUGHRAN, RIPPEY, CONWAY, DESMOND and THACHER, JJ., concur.
*292Judgment accordingly.