21 N.Y.S. 71 | N.Y. Sup. Ct. | 1892
Lead Opinion
The action was brought by the appellant to procure a reformation of two chattel mortgages executed by him to the respondent Sturtevant, and also to reform a certain trust agreement executed by him to the respondents Cooper and Waddell simultaneously with the execution of the chattel mortgages. The plaintiff had, up to the time of the execution of the instruments in question, been engaged in conducting and carrying on an hotel business in the premises in the city of New York known as the “Sturtevant House,” and those instruments related to the business, furniture, and fixtures of said hotel. The plaintiff alleged in his complaint that the chattel mortgages should have contained a provision making them payable within one year, instead of on demand, and that there should be inserted in the trust agreement a provision that upon demand the property therein mentioned should be given back, and the management of the business turned over to him. ■He prayed that an injunction be granted restraining the respondent Sturtevant from selling the said property under the chattel mortgages, and Cooper and Waddell from conducting and carrying on said business, and that a receiver be appointed to take possession of the property and business, and manage and conduct the same during the pendency of the action. It was alleged in the complaint that the plaintiff at the time of the execution of the instruments referred to was ill and incapacitated from the transaction of business, and, that he did not know that the provisions in respect to which a reformation of the instruments was sought had been omitted therefrom, but that he supposed that such provisions had been inserted therein. The answer of the defendant Sturtevant denies the allegations of the plaintiff in respect to the mistake in the provisions of the chattel mortgages and the trust agreement, and as to the plaintiff’s incapacity from illness, and generally all the equities in the complaint. Subsequently, on the motion of the plaintiff, on the 30th day of December, 1891, the defendant Erhardt was appointed receiver of the furniture and chattels in said hotel, and of the lease thereof, and of the business carried on therein, with directions to conduct and carry on said business. The defendants Cooper and Waddell were also dl-. reeled to deliver to the receiver the property of the hotel then in their possession, and the defendants herein were enjoined and restrained, pending the action, from selling or disposing of the furniture and chat
“Fifth. Your petitioner respectfully shows to the court that he has received notice of a certain petition and motion of Jos. B. Janvrin, verified April 3, 1893, for an order requiring your petitioner, as the receiver of the furniture and chattels now in the Sturtevant House, to forthwith pay Jos. B. Janvrin, the petitioner, in the said petition, the amount of a certain mortgage set forth in said" petition, amounting to $5,000, and interest thereon since January 26, 1891, together with the costs of the said proceeding; or, in default thereof, that your petitioner deliver possession of all the furniture and chattels now in his possession or under his control, and referred to in and covered by the said mortgage, to the said petitioner, Janvrin; and that he, the said Janvrin, be allowed to take possession of all of said furniture and chattels, and foreclose the said mortgage according to the terms thereof. Sixth. That your petitioner, as such receiver, is wholly unable to make payment of the principal and interest of the said mortgage; and that, if the furniture, fixtures, and chattels described in and covered by the said mortgage shall be removed from the possession and control of your petitioner, your petitioner will be unable to continue to administer the trust in his hands', namely, the hotel business now conducted by the Sturtevant House.”
The defendant Sturtevant also presented his petition, dated May 4, 1892, in which he states in great detail the transactions between him and Matthews, and alleges that the appellant, as lessee, was in default for , nonpayment of Croton water rates or rents accruing in the years 1891 and 1892, and claims that under the covenant in the lease he is entitled to reenter upon the premises by reason of such default. He also alleges that the appellant has made default in payment of certain promissory notes mentioned in the chattel mortgages, and that, under the terms thereof, he is authorized and empowered to take possession of the .property covered by them, and desires to do so. He further averred that one Janvrin, claiming to be a creditor of the appellant for a debt secured by a chattel mortgage, executed prior to the mortgages to the petitioner, had by judicial proceedings attempted to remove the property covered by the mortgages held by the petitioner; that Janvrin had served notice of motion on the receiver for an order directing said receiver to forthwith pay the, amount of his mortgage, or, in default, deliver possession of the property to him; that, said motion' coming on' to be heard, it was directed that a copy of Janvrin’s petition and notice be served on all the parties to this suit; that this had been done, and that said application was pending and waiting a hearing. He further averred that he elects that it is for his best interest to take possession of the property covered by said two chattel mortgages mentioned in the complaint, and that, under and by virtue of the terms of said chattel mortgages, he is, upon such election,
We think that the order was right. Janvrin was confessedly entitled to be paid the amount due upon his mortgage, or to take possession of the property, and sell it, to obtain payment of his debt. The property was in possession of a receiver, who had been appointed by the court in another action, to which he was not a party. There was no money in the hands of the receiver, out of which Janvrin’s claim could be paid. Whether the mortgage to Sturtevant and the trust deed recited all the terms agreed upon between the parties or not, the fact is also conceded that Matthews was largely indebted to Sturtevant, and that the latter was vitally interested in preventing a sacrifice of the property upon a sale upder the Janvrin mortgage. Matthews does not claim, in his affidavit in opposition to the motion, that he is able to protect the property or to pay Janvrin’s debt. To deny the application of Sturtevant might lead to a sacrifice of the property, and result in irreparable injury, not. only to him, but to the plaintiff, if it should eventually be determined that he is entitled to relief at the hands of this court. The order below must be affirmed, with costs and disbursements.
Concurrence Opinion
While concurring with the opinion of Mr. Justice LAWRENCE in so far as it affirms the order of the court appealed from, which allowed the defendant Sturtevant to proceed with the foreclosure of the mortgages, we cannot concur in his conclusion to affirm that part of the order which embodied a judgment in an action of forfeiture. The question as to whether the covenants of the lease by which the plaintiff, Matthews, held the premises in question was one which he had a right to have tried in a regular action, so that his rights and those of the defendant Sturtevant could be determined therein. This court
O’BRIEN, J., concurs.
APPEAL PROM ORDER CONFIRMING REFEREE’S REPORT.
Prior to the 10th of March, 1886, the appellant Sturtevant and one John J. Sturtevant were copartners in the hotel business in the city of New York, and, as such firm, were the owners of the property known as the “Sturtevant House,” which premises, in March or April, 1886, they leased to the plaintiff, Matthews, and one Pearson. The lease contained a covenant that the lessees would pay the Croton water rents imposed upon the demised premises, and that, if default should be made in any covenant, the lessors might re-enter. Matthews and Pearson entered upon said property, and conducted the hotel business therein after the execution of said lease, and continued the occupation thereof until March, 1891, when the business connection between Matthews and Pearson was dissolved by the withdrawal of Pearson, and thereafter Matthews continued to carry on such business in said premises until the time hereinafter mentioned. In July, 1889, John D. Sturtevant died, leaving the appellant his surviving partner. Prior to October, 1891, Matthews made and executed a chattel mortgage upon the furniture, etc. , contained in said hotel to one Janvrin, to secure the sum of $5,000; and in October, 1891, said Matthews also executed to the appellant, as surviving partner of the firm of A. P. & J. D. Sturtevant, two chattel mortgages upon the same goods and chattels, which mortgages contained a provision that, in case of default, the party of the second part might enter any dwelling house and other premises, and such other place or places as said goods might be placed, and take
“Memorandum oí stipulation between Albert P. Sturtevant and Joel B. Erhardt, the receiver in the above-entitled action. • Whereas, a motion made in this action by the defendant Sturtevant for an order that the said receiver permit said Sturtevant to re-enter under the lease mentioned in the complaint, and to take possession of the furniture covered by the chattel mortgages mentioned in the complaint, has been granted upon condition that the defendant Sturtevant make an*77 arrangement with said receiver satisfactory to said receiver for the protection of said receiver against any liability for his acts in the performance of his duties as such receiver; and whereas, said receiver has incurred indebtedness for supplies and operating expenses of the business and other expenses of his receivership, and has in his possession as such receiver certain property, including supplies, which would necessarily be disposed of at a great loss for any other purpose than for use in the operation of the said business: It is hereby agreed: First, that if said Sturtevant will take from the said receiver all supplies which the said receiver has on hand in the hotel known as the ‘Sturtevant House,’ and mentioned in the complaint, and pay said receiver full cost price thereof, and as of the time when said premises are taken possession of by said Sturtevant; second, that at th'e time of such taking possession there shall remain any assets of said receivership, and any unpaid debts or expenses of said receivership, after the application thereto of all moneys then in said receiver's hands, and all moneys paid to said receiver by said Sturtevant under the foregoing provisions.—then the said Sturtevant agrees, upon any sale of the then remaining assets of the said receivership, to bid therefor a sum which shall be at least sufficient to pay all the remaining debts and expenses of such receivership, together with the expenses of such sale; third, that, in any event, in case any lawful obligation of said receiver, incurred in the performance of his duties as such, shall remain unpaid after the application of all the property in said receiver’s hands applicable thereto, said Sturtevant shall indemnify and save harmless the said receiver from and against all liability thereupon. ”
In June, 1892, the receiver gave notice that on his petition, account, and schedules he would apply for a reference to pass his accounts and for his discharge, and for other relief; and thereupon an order of reference was made, directing the receiver to ascertain and report to the court what, if any, property or assets vested in said receiver in this action remained undisposed of. The referee thereupon proceeded with the reference, and reported that the only propcerty or assets vested in said receiver which remained undisposed of is the cash on hand with which said receiver is chargeable, and the amount due upon the obligation of the appellant Sturtevant to said receiver under the stipulation. The appellant filed exceptions to said report, to the effect “that the referee should have reported that the right, title, and equity of plaintiff, Matthews, in the furniture and chattels described in the mortgages and trust deed mentioned in the complaint ought to be charged with the payment of the receiver’s debts, expenses, and compensation, and sold for that purpose.” And also “that the referee should have reported that defendant Sturtevant is under no liability upon the stipulation with the receiver, referred to in the report, except contingently for any deficit there may be after a sale of plaintiff’s (Matthews’) right, title, and equity in the said furniture and chattels, and the application of the proceeds of such sale to the payment of the debts, expenses, and compensation of the receiver.” Also to so much “of said report as states, in effect, that the only property or assets vested in said receiver which remain undisposed of is the cash on hand, and the amount due upon the obligation of defendant Sturtevant upon his stipulation with the receiver.” And also to so much of the report as states that the receiver is entitled to commissions upon the amount of the obligation of the appellant Sturtevant above mentioned. The other exceptions are substantially embraced in those which have been mentioned. These exceptions being overruled by the court, and an order entered confirming the report, this appeal is taken from that order.
O’BRIEN, J., concurs.
LAWRENCE, J. I think that the order should be wholly affirmed for the reasons stated in my opinion on the appeal, taken by Matthews.