Case ID: nys_12/html/0601-01.html
Source: Caselaw Access Project
Author: {"author": "Brady, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Cowen et al. v. Arnold et al.
    
    
      (Supreme Court, General Term, First Department.
    
    December 29, 1890.)
    Foreclosure of Mortgages—Rights of Purchasers—Apportionment of Rents.
    Rents of mortgaged premises, payable in advance, and collected in advance by a receiver appointed in an action to foreclose the mortgage, for a period extending beyond the date of delivery of the deed to the purchasers at the foreclosure sale, may be apportioned to such purchasers.
    Appeal from special term, New York county.
    Action by Hewman Cowen and another against Christina Arnold and others for foreclosure of a mortgage. Plaintiffs, having purchased the mortgaged property at the sale under foreclosure, appeal from an order denying a motion by them that rents of the premises for the month of October, 1889,-collected in advance by the receiver in the action, be apportioned to plaintiffs from October 4,1889, the date of delivery of the referee’s deeds. For dismissal of the appeal of George Finch, one of the defendants, see 11 N. Y. Supp. 95.
    Argued before Van Brunt, P. J., and Brady and Daniels, JJ.
    
      Lewis Sanders, for appellants. Charles H. Lovett, for respondents.
   Brady, J.

It appears that in this action a receiver of the rents and profits was appointed on the 29th of March last, and collected the rents, which were payable in advance. The plaintiffs, as purchasers, received their deed on the 4th of October, 1889, and made application that the receiver pay the plaintiffs’ attorney expenses of the agent, his commissions for collecting the October rents and for disbursements in the care of the premises prior to October 4th, and the expenses incurred after the 4th of October during that month, amounting to $29, and also to apportion the rent for October to the plaintiffs. The plaintiffs were the assignees of the agent, Zittel, for value, of his claims just mentioned. The application for the payment of the agent’s expenses and commissions, amounting to $77.01, with interest, was granted, and the amount directed to be paid, but the application to apportion the October rents was denied. A supposed difficulty which presents itself in the consideration of this appeal arises from the fact that it is alleged by the receiver that the owner of the equity of redemption had not been served with notice of the motion, and this point is taken. It is quite clear that, so far as this appeal is concerned, the defendant Fink has no interest xvhatever in the fund that is left, for reasons which will appear.. The rent was payable, as already suggested, in ad Alance; but the only rent the receiver could take was for the 1st, 2d, and 3d days of October, the delivery of the deed making him functus officio thereafter, and entitling the plaintiffs to the rent accruing subsequently. ■ Where the purchaser is ready and willing to perform, and the delay is on the part of the vendors, the purchaser is entitled to the rents and profits from the time when, according to the terms of the contract, possession should have been.delivered, or, if the vendor .has remained in ..possession, he is chargeable with the value of the use and occupation from the same period. Bostwick v. Beach, 103 N. Y. 423, 9 N. E. Rep. 41. The receiver’s appointment was subject to the sale of the premises, the purchase of them under it, and the delivery of the deed and possession of the premises. Beyond the time when the purchase was completed his official relations to the parties did not exist, and he could not collect on the 1st of October the rent for the use of the premises from the 4th of October, although payable in advance, when the purchaser became entitled to the possession of the premises. The learned counsel for the respondent suggests that, in the absence of a statute or an express agreement to that effect, rent can never be apportioned in respect to time; citing the following authorities: Zule v. Zule, 24 Wend. 76; Mayor v. Ketohum, 67 How. Pr. 161; Cheney v. Woodruff, 45 N. Y. 98. These eases, with the exception of Cheney v. Woodruff, relate to actions brought against tenants, and that case is decisive of the inability of a purchaser at a foreclosure sale to recover the rent accruing between the time of the purchase and the delivery of his deed. Hone of these cases, therefore, has any application to the question in hand.' All that the owner of the equity of redemption is entitled to, in lands mortgaged after the sale under the mortgage, are the rents which become due down to the period when the purchaser under the decree of sale becomes entitled to the possession of the land. Clason v. Corley, 5 Sandf. 447. If the rule contended for, perhaps not seriously, by the respondents’ counsel, were to prevail, namely, that any rental of premises sold under foreclosure which accrued by being payable in advance the day before the delivery of the deed would belong to the owner of the equity of redemption, then the purchaser would be deprived of the beneficial enjoyment of the premises for such period as the rent covered, whether it was three months, six months, or a year. This proposition, of course, is wholly untenable. The order appealed from must be reversed, and the motion ordered reheard at the special term, when, if necessary, the owner of the equity of redemption can be brought in.

Daniels, J. I agree to result.

Van Brunt, P. J., concurs.