Case ID: ny-super-ct_55/html/0110-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLIAM C. HERRING, as Trustee, &c., v. MARY C. BERRIAN, et al.
    
      Defect in title—Outstanding tax lease—Effect of referee's report declaring tax sale void—Effect of instrument executed by tax lessee securing purchaser from molestation.
    
    A purchaser at a partition sale is entitled to be relieved from his purchase, where it appears that there is an outstanding tax lease of the premises, though it also appears that in an action against certain of the defendants in the partition suit, brought by the owner of the tax lease, who was not a party to said partition suit, and which action was not continued to judgment, a referee’s report was made and filed, holding such tax sale void.
    Such an objection is not cured by the execution of an instrument by the tax lessee securing said purchaser from molestation of his title by said lessee, the latter expressly reserving therein Ms right to sue the Mayor, &o., for return to him of the amount paid for taxes.
    Before Sedgwick, Ch. J., Freedman and Truax, JJ.
    
      Decided June 23, 1887.
    Appeal from order relieving purchaser on sale in partition, on ground of defect of title.
    The facts appear in the following opinions of the court below:
    “ O’Gorman, J.—The main objection to the- title is that the land was sold for non-payment of taxes and a lease delivered to the purchaser, which lease is still outstanding.
    “In answer to this objection the plaintiff contends that the sale of the land for unpaid taxes was irregular and void, and that it was so held by the referee in an action brought by the holder of the tax lease against the defendant in this action. That action, however, was never continued to judgment, 'and seems to have been ■discontinued, and the report of the referee therein is in nowise an adjudication or estoppel that can be effectual in the action now at bar, and is not evidence in this -action.
    “The rule of law as to judicial sales is, that the pur■chaser should have a marketable title free from all reasonable doubt. The purchaser buys on the assumption' that there are no undischarged defects in the title, and he pays and the seller receives a consideration in view of that implied condition. A title open to reasonable doubt is not a marketable title. A court cannot make it so by passing on objections dependent on a disputed question of fact, or a doubtful question of law, in the absence of the parties in whom the outstanding right is vested. Fleming v. Burnham, 100 N. Y. 8, et seq.
    
    “ A purchaser should not be left, on receiving a deed, to a hazard of a contest with other parties, which may seriously affect the value of the property if he desires to sell. Jordan v. Poillon, 77 N. Y. 521.
    “ The existence in the case at bar of ■ an outstanding tax lease is a cloud on the title. The title is open to reasonable doubt and is not a marketable title.
    “ Another obj ection is that since the commencement of this action and before the sale therein by the referee, the title of plaintiff as trustee ceased by the death of the cestui que trust, and all the interest remaining in the plaintiff in the land in question was a naked power to sell. I do not so interpret the deed under which plaintiff held in trust. I am not of opinion that the trust vested in the plaintiff, wholly ceased on the death of Cornelius J. Herring. It still continued, I think, for the purpose of sale of the land and distribution of the proceeds among children. Morse v. Morse, 85 N. Y. 57. Besides, even if after the death of Cornelius, the trust in plaintiff had ceased, he yet, as one of the persons entitled to share in the final distribution of the proceeds of the sale of the land, had, I think, a personal interest in the property and right to possession entitling - him. to sue as plaintiff in this action. This défect, however, if it be a defect, may no doubt be cured by amicable arrangement among the parties in interest in this action, if, as I am informed, they desire to render the sale to the present purchaser effective. ■ Cromwell v.. Hull, 97 JSÍ. Y. 209.
    “The other objections depend on alleged irregularities which need not now be considered.
    “The first objection I think is fatal.”
    “ O’Gorman, J.—Since writing my opinion filed on May 5, 1887, my attention has been directed to a paper executed by Mr. Levenson, the holder of the tax lease, and filed, and I am requested to consider its effects on the rights of Mr. Gutman, the purchaser, to be re- - lieved -from his purchase.
    “ I see no reason to' alter the conclusion at which I had heretofore arrived.
    “ This paper called an indenture, executed by the tax lessee, while it may secure the purchaser from molesta- • tionof his title by the tax lessee, expressly reserves to the latter the right to sue the Mayor, &c., of Ñew York for re- - turn to him of the amount paid for taxes. Whether he will succeed in this action, and on what ground his success may depend, are equally uncertain. Tiffs recovery, if he do recover, may depend wholly on the irregularity or illegality of the sale, in which case a question might arise whether a further sale of the premises for the unpaid tax would not be proper. What the result would be if the assessment itself was held to have been irregular or illegal is a question as to which I give no opinion now. But the paper executed by the holder of the tax' lease, leaves that lease still an' existing cloud on the title, against which the purchaser may be called on to-protect himself, through the ordeal, of litigation, to.which he should not be exposed;.
    “ A title endangered is not a marketable title.
    
      
      “I have not alluded to other objections made on behalf of the purchaser to the completeness of this paper executed by Mr. Levenson, as relieving the title of its imperfection.
    “ I adhere to the opinion heretofore expressed by me, that Gutman the purchaser at a judicial sale, had the right to a marketable title, and that the title offered to him was not such.”
    
      G. H. Brewster, for the plaintiff:
    The release of Mr. Levenson, the owner and holder of the tax lease to Mr. Gutman,' the purchaser, is a complete bar to any action that can be brought by the holder of said lease or by his legal representatives or assigns.
    These taxes have been paid to the city on the sale of the premises by the city. There is no power or authority for the city to make a new assessment for the taxes for those years, or to make another sale for those taxes. The assessment and the proceedings for the sale were irregular and void, and were so found by the referee, in the action brought by Mr. Levenson to recover the possession of the premises under said tax lease, and by section 1228 of the new Code that report stands as the decision of the court. If Mr. Levenson should recover a judgment against the city for the moneys he has paid for his lease, the city can collect the amount in a future tax levy on the whole city, in the same manner as other judgments against it. Franklin v. Pearsall, 53 Super. Ct. 271.
    
      Ten Eyck & Remington, for defendant Berrian.
    
      Ferdinand Kurzman, for the purchaser:
    I. A purchaser of land at a judicial sale is entitled to a marketable title. A title open to a reasonable doubt is not a marketable one, and the court cannot make it such by passing upon an objection depending upon a disputed question of fact, or a doubtful question of law, in the absence of the party in whom the outstanding right is vested. Fleming v. Burnham, 100 N. Y. 1; Argall v. Raynor, 20 Hun, 267; Jordon v. Poillon, 77 N. Y. 518.
    The tax sale and the lease given in pursuance of such sale, if the proceedings were regular, and in all respects in conformity with the law, vested the premises in the purchaser, or his assigns, for the term mentioned in the said lease. It is claimed that this sale and the lease are void. This raises questions both of law and fact, and brings the case clearly within the above decisions. 1. The party, whoever he may be, claiming under this lease, is not before this court, and will not be bound by any decision the court may make. 2. If it should be held that the proceedings did not conform to the law, and that, therefore, the sale and lease are void, then the tax remains unpaid and is a lien upon the premises with interest from its date. As the case now stands, the purchaser cannot pay these taxes, and deduct the amount from the purchase money. The city could not and would not take the money as long as the lease is uncancelled, nor could the referee permit such a deduction. 3. The referee’s report in the action of ejectment of Levenson v. Herring will not help matters. The city is not bound by the referee’s report, not having been made a party in the action. The affidavits fail to show that judgment was ever entered in that action, and Levenson, or whoever claims under that tax lease, may discontinue that action or commence a new one, or, this being an action of ejectment, Mr. Levenson, even after entry of judgment, may have a new trial in that action at his option. The costs may have been paid and the action discontinued; at any rate no judgment appears to have been entered, and the three years for a new trial given by statute in actions of this character, do not begin to run until after the entry of judgment. In fact the referee’s report is of no legal effect at all as regards this motion.
    
      II. The appellant attaches undue importance to the release of Mr. Levenson. By it Mr. Levenson stipulates that if Mr. Gutman will take title, he, Levenson, will not take any proceedings to recover the possession of the premises under the tax lease, or to recover any damages for withholding possession of the premises, or any part thereof, or any sum for the use or occupation thereof. He, however, still reserves his rights thereunder, to recover the tax from the city. Should he succeed in the action against the city, he would recover from the city the tax of $2,690.48, on the ground that the sale of the premises to Ambrose K. Ely, Levenson’s assignor, for one hundred years for the non-payment of ■said tax, was illegal, as it is not likely Levenson could maintain a suit to invalidate the tax levy. This would leave the tax a lien upon the property, as the judgment, in the suit of Levenson, could only invalidate the tax sale, and the result would be that there would be upon the premises the unpaid tax of $2,690.48, with interest from 1869 to 1870, and the title to Mr. Gutman would, therefore, still be objectionable. The court certainly will not force an innocent purchaser at a judicial sale, to take the property with this heavy tax lien upon it. If Mr. Levenson had executed to Mr. Gutman an absolute assignment of the tax lease, the case might possibly be ■different, but the release in question is not sufficient to ■clear the title. .
   Per Curiam.

The order should be affirmed, with ■costs and disbursements on the opinions delivered by the learned judge at special term.