Rhoades v. Card — 44 N.Y.S. 621

Majority

p. 621

RHOADES et al. v. CARD et al.

(Supreme Court, Appellate Division, First Department.

April 9, 1897.)

Headnote

Covenants—Restrictions against Nuisances—Enforcement by Covenantor.

A mortgagor may, as against a subsequent grantee of the mortgaged premises, have the foreclosure sale made subject to restrictions against nuisances imposed after the execution of the mortgage, but before the sale.

Appeal from special term, New York county.

Action by John Harsen Rhoades and others as executors of and trustees under the will "of Benjamin F. Wheelwright, deceased, against Margaretta Card and others, to foreclose a mortgage. From an order directing that the premises be sold subject to a certain restriction, defendant Regester, as assignee for benefit of creditors of Jackson Brandt, appeals. Affirmed.

In November, 1890, Margaretta Card executed and delivered a bond secured by a mortgage upon premises on the north side of Seventieth street, near West End avenue. At that time she was also the owner of premises on the south side of Seventy-First street, immediately adjoining in the rear. In December, 1892, she conveyed the Seventy-First street premises to one Hirsch, with whom she entered into an agreement to restrict both pieces of property by making

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them subject to what is commonly called the “general restrictions against nuisances.” All subsequent conveyances of the mortgaged premises were made subject to these restrictions, until they vested in the defendant Kegester, who is now the holder of the record title. On the application herein for judgment in foreclosure, the defendant Card moved for an order directing that the judgment provide that the premises be sold subject to the restrictions; stipulating as a condition for such relief that she would bid the amount due the plaintiffs, principal and interest, on the bond and mortgage, and the costs and expenses of foreclosure. This was opposed by Begester, who stipulated to bid, if the restrictions were omitted, $2,500 in excess of the amount due the plaintiffs. The motion was granted, and it is from the order thereupon entered that this appeal is taken.

Argued before VAN- BRUNT, P. J., and BARRETT, RUMSEY, O’BRIEN, and INGRAHAM, JJ.

R. L. Harrison, for appellant.

Thomas S. Ormiston, for respondent.

The plaintiffs do not care whether the premises are sold with or without the restrictions, because in either event they are protected by the stipulations, which insure their getting the full amount of their lien, together with the expenses incident to collection. The controversy is therefore confined between Mrs. Card and Regester. The former’s interest is to have the restrictions remain, because her covenant was that there should not be erected upon the Seventieth street property any buildings but private dwellings for a period of 20 years, and a violation of such covenant, even without her fault, might subject her to damages. On the other hand, Regester insists that, as the covenant was entered into subsequent to the mortgage, he has the right to have the property sold in accordance with its terms and conditions, and that a sale subject to the restrictions would diminish the market value of the property 25 per cent. It is conceded that Regester bought the property subject to the restrictions, and there is no reason why he should get the enhanced price which the property would bring freed from the restrictions, at the expense of Mrs. Card. Regester’s .assignor, having purchased the premises subject to the restrictions, and paid for them accordingly, is, in effect, asking the court to make a better bargain for him than he did for himself. The order does not change the position of Regester, but its reversal might seriously affect Mrs. Card. The rule which upon such facts should control is stated in Rector, etc., of Christ Church v. Mack, 93 N. Y. 488 . It there appeared, as here, that subsequent to a mortgage a restriction had been imposed upon the property. At the request of a subsequent purchaser, the mortgagee foreclosed; and, no one seeking to preserve the restriction, the defendant Mack, at the sale, became the purchaser of the premises unincumbered thereby. The plaintiff then brought an action for an injunction to restrain a violation of the restriction; and after refusing the relief the court said:

“The plaintiff should not have waited until the sale. When brought into court as a defendant, and certain to be bound by the decree, it should have sought to modify the decree; and showing the peril of its easement, and offering to bid the full amount of the mortgage debt and costs upon a sale subject to the servitude, it should have asked that the sale should be so made. The

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mortgagee could not object, since bis debt would be paid in full, and be bad’no greater right; and Mrs. Mack [the party seeking the removal of the restriction] could have asserted no equity to have the sale so made as to free her from the easement.”

It is true that these views, as affecting the question in that case,. were obiter dicta; but, regarded merely as a suggestion of the practice to be followed and of the view to be taken upon the precise question here presented, they commend themselves to our judgment, and. we adopt them, as equitable and just.

The order should be affirmed, with $10 costs and disbursements^ All concur.

Cases cited

Rector of Christ Protestant Episcopal Church v. Mack 93 N. Y. 488 N.Y. 1883-10-23 p. 622