Case Name: Welsh v. Schoen et al.
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1891-01-16
Citations: 13 N.Y.S. 71
Docket Number: 
Parties: Welsh v. Schoen et al.
Judges: 
Reporter: West's New York Supplement
Volume: 13
Pages: 71–73

Head Matter:
Welsh v. Schoen et al.
(Supreme Court, General Term, First Department.
January 16, 1891.)
1. Foreclosure of Mortgage—Notice—Parties in Possession.
'At the time of foreclosing a mortgage, the person appearing by the record to be the owner of the property had conveyed it, and the grantee had again conveyed, and she and her grantee had joined in a lease of a building on the premises to a tenant, who went into possession before the complaint or notice of pendency of the action was filed in the foreclosure suit. Neither of the grantees nor the tenant was made a party to the action. Held, that Code Civil Proc. N. Y. § 1671, providing that a person whose conveyance or incumbrance is recorded after the filing of notice of pendency of such an action shall be bound by all the proceedings thereafter taken in it, to the same extent as if he was a party, did not apply to a purchaser or incumbrancer in possession.
2. Same—Notice to Mortgagee.
The possession of the tenant was notice to plaintiff of the title of the lessor and of the tenant.
3. Same—Delivery of Possession—Removal of Tenant.
The tenant could not be removed, and possession given to the purchaser at the sale in foreclosure, by any proceeding in the action.
4. Same—Rights of Purchaser.
Such purchaser was entitled to be relieved from his bid.
Appeal from special term, New York county.
Action by S. Charles Welsh, as trustee of Ethel Howard Tweedle, against Henry Schoen and others, to foreclose a mortgage of property known as “Ho. 2250 Second Avenue, ” in the city of New York. Plaintiff appeals from an order relieving Louis Ettlinggr, the purchaser of the premises at the foreclosure sale, from his purchase, and directing repayment to him of the sum of $1,180, paid upon the purchase price, with the interest thereon, together with exchange and auctioneer’s fees, expenses of examining the title, and referee’s fees, with the costs of the action.
Argued before Van Brunt, P. J., and Brady and Daniels, JJ.
James E. Carpenter, (tiratz Nathan, of counsel,) for appellant, John B, Talmage, for respondent.

Opinion:
Daniels, J;
This action was for the foreclosure of a mortgage upon the premises in question. It was commenced by the service of the summons, in February, 1890. The original notice of the pendency of the action was filed .with the complaint on the 8th of March following, and on the 14th of April, 1890, an amended notice was also filed. When the suit was commenced,"Leah Diamond appeared by the record to be the owner of the land incumbered by the mortgage; but she had in fact executed and delivered a deed of the property to Mary T. Stephens, on the 17th day of December, 1889, and she also executed a deed on the 13th day of January, 1890, to Charles Giesmeyer, which was delivered on or about the 15th of April of the same year, the grantor in this deed remaining during that interval of time in the possession of the premises and collecting the rent. The parties to the last deed joined in a lease to George A. Marz, on the 14th of February, 1890, by which they leased and demised to him the store and back rooms and three rooms of the second floor of the building on the land, for the term commencing on the day of the date of the lease, and continuing to the 1st of May, 1892, and he went into possession on the 1st of March, 1890, and has since remained in possession under this lease. Heither of these three persons was made a party to the action to foreclose the mortgage, and under the judgment in which the sale was made; and the court held that to be such a defect in the title as entitled the.purchaser to be relieved from his contract of purchase. The correctness of this decision has been denied under the language of section 1671 of the Code of Civil Procedure. That section has provided that a person whose conveyance or incumbrance is executed or recorded after the filing of the complaint, and the notice of the pendency of the action of foreclosure, shall be bound by all the proceedings in the action to the same extent as if he was a party to the action; but this effect has been given to the filing of the notice solely on the existence, and the omission to record the preceding conveyance or incumbrance. It includes only the class of case's where no more has been done than the making and delivery of the conveyance or incumbrance. To bring the case within this section the case must extend no further than the execution and delivery of the instruments mentioned. That is the language, as well as the plain significance, of it, as it has been employed in the section. Its object was to protect the party prosecuting his action against conveyances and incumbrances of which he ordinarily could have no knowledge or information, on account of their absence from the record; and it would violate this intention to extend the provision to a ease where the purchaser or incumbrancer had in fact become possessed of the premises, for that possession is notice, as complete as the recording of the instrument itself would be, to all persons dealing with or-proceeding against the property. It has been uniformly held to be the equivalent of notice resulting from the recording of the conveyance or incumbrances, and has been so, in effect, declared by the case of Phelan v. Brady, 119 N. Y. 587, 23 N. E. Rep. 1109. Through this possession the plaintiff became chargeable with notice of the title of Mary T. Stephens, and of the tenant in the occupancy of a considerable part of the property, under the lease of herself and her grantee to him; and he could not be removed, and possession given to the purchaser, by any proceeding in the action, because of the omission to join him as a defendant in the action. Hirsch v. Livingston, 3 Hun, 9. What the purchaser was entitled to demand under the terms of his purchase was a complete title to the property, together with an immediate right of possession. That he did not and could not obtain, and, for want of that, was entitled to be discharged from his purchase, and to be otherwise indemnified, as that has been directed by the order. The order should therefore be affirmed, with $10 costs and the disbursements. All concur.