Case ID: ny-st-rep_19/html/0052-01.html
Source: Caselaw Access Project
Author: {"author": "O’Brien, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Burchell v. Osborne et al.
    
    
      (Supreme Court, Chambers, New York County,
    
    
      Filed November 9, 1888.
    
    1. Priority of liens.
    Where a fund is such that legal specific liens can he obtained upon it, such liens are entitled to payment in preference to mere equitable liens.
    3. Reference—Practice—Requests to find. ,,
    The proper practice on a reference is to present requests to find to the referee, and exceptions can then be taken to the referee’s refusal to find.
   O’Brien, J.

In the briefs submitted by the counsel who filed exceptions to the referee’s report, all of the latter have seemingly been abandoned except the substantial one of the referee’s decision as to the mode of distribution of the •surplus. It is proper, however, to state that as to the fees of the referee the original stipulations, together with his •affidavit, would seemingly justify the charge made of $600.

The exception that the referee erred in failing to find certain facts or conclusions of law is not well taken. The proper practice would have been to present requests to find, and exceptions could then have been taken to the referee’s refusal so to find. I do not think, however, that the Brainsrd Quarry Company, or the defendant Steers, have been prejudiced by any failure to so present requests ; as the exception taken to the referee’s conclusion as to the mode of distribution presents the real question upon the motion to confirm the report.

The decree herein provided for a sale of the property in the inverse order of alienation, and also directed a sale of only so much of the premises mortgaged to plaintiff as would pay plaintiff and the prior mortgagee. No appeal was taken from the decree, and so far as it determined the rights of the parties it is conclusive upon this motion.

It seems to me, therefore, that the court has, by the decree, determined the question here presented as between the parties, and while it has not in so many words provided for the distribution of the surplus as found by the referee, it in fact substantially determined the priority of the liens. Even were this not so, however, I am inclined to the view that the referee’s conclusion is correct. If sufficient money had been realized to pay the two mortgages before the eighth lot had been sold, the referee would have been compelled to close the sale, and the mortgages on the eighth lot would have then remained liens on that lot, and all the mortgages on the prior lots would have been wiped out. The effect, moreover, of a contrary construction of the priority of liens would destroy the distinction between a general lien and a specific lien, besides impairing the force and effect of the recording act.

As to the mortgages on the other lots, the most that could be claimed for them is that they secured an equitable claim upon the surplus. As I understand the rule, however, where a fund is such that legal specific liens can be obtained upon it, such liens are entitled to payment in preference to mere equitable claims.

My conclusion, therefore, is that the exceptions should be overruled and the report confirmed.

As to the claim for an allowance presented on behalf of the counsel for the moving creditor, in view of the fact that this is to be taken out of the amount that would come to another creditor, while something should be allowed, the amount should be small.

It is accordingly ordered that in addition to the costs he should have an allowance of $100.