Mitchell v. Bartlett

| N.Y. Sup. Ct. | Nov 2, 1868

By the Court, Ingraham, J.

The question submitted to us in this case is whether a purchaser at a foreclosure sale is entitled to the rents of the mortgaged premises which accrue between the sale and the delivery of the deed, where such purchaser does not complete his purchase at the time designated in the terms of sale.

It is very clear that he is not entitled to any interest which accrues before the time fixed for the delivery of the deed. The sale is not perfect, and the deed is not to be delivered before that day. He is not required to pay interest, and he has therefore no claim to the profits.

In the present case the plaintiff, who was the purchaser, refused to complete his purchase, and the premises were resold. The second purchaser also refused, and the premises were resold a third time, and were bought by a person acting for the plaintiff, when the sale was completed by the plaintiff under his first purchase.

I see nothing in this case to entitle him to the rents. He violated his contract, and the property was resold. This terminated his right ■ to the property. The second resale had the same effect, and the only authority there was on the part of the referee to convey to the plaintiff was under the last sale, .at which the premises were purchased by Rigny, acting for the plaintiff. To hold that the purchaser, under these circumstances, was entitled to the .rents accruing before he received his deed, would be doing injustice to the owners. True, the purchaser was compelled to pay interest, but that was a punishment for his breach of contract, and did not compensate the owner for the expense of resales and the delay arising from the purchaser’s neglect.

Hor do I consider the deed, in such a case, to relate back to the day of sale, so as to entitle the purchaser to the rents. He certainly would not be entitled to rent falling due before the time of delivery of the deed, and if so this doctrine of relation to the time of purchase does not apply.

If the mortgagor had been the occupant of the mortgaged premises at the time of sale, he could have remained there without the payment of rent until the deed was delivered, and the purchaser could not in any way have collected rent from the tenant after the deed was delivered. There was no relation of landlord and tenant subsisting at any time, and on obtaining the deed, his only course was to take possession of the premises. The case of Fuller v. Van Geesen, (4 Hill, 171,) and McLaren v. The Hartford Fire Ins. Co. (5 N. Y. Rep. 151,) do not apply to the question of the right to rents. The first case merely held that the confirmation of the sale by order of the court related back to the date of a deed previously delivered, and overreached the claim of a mere intruder.

The second case involved the right to insurance made by the mortgagee after the sale. The risk was to be borne by the purchaser.

The chancellor decided, in Astor v. Turner and Skidmore, (11 Paige, 436,) that such relation back to the day of sale did not apply to rents coming due between the sale and the giving of the deed, and the same principle would apply when the purchaser by his own act and in violation of his contract delays the completion of the purchase.

[New York General Term, November 2, 1868.

. In Clason v. Corley, (5 Sandf. 447,) this question was fully examined, and it was held that the purchaser was not entitled to any rents that accrued before the sale, and that even where the purchaser had tendered the purchase money and done all in his power to complete the sale, before the rent became due. In this case the mortgagor recovered from the tenant, who had purchased under the foreclosure, rent which came due between the time fixed for completing the purchase and the actual delivery of the deed.

The referee erred in giving the plaintiff the rents which accrued before the delivery of the deed.

Judgment reversed and new trial ordered, costs to abide the event.

Geo. G. Barnard, Ingraham and Gardozo, Justices.]