Belter v. Lyon — 2 N.Y. St. Rep. 505

Majority

p. 505

Louisa Belter, as executrix, Resp’t, v. Hannah Lyon et al., App’lts.

(Court of Appeals,

Filed June 8, 1886.)

Headnote

Mortgage—Foreclosure—Sale—Right reserved to mortgagor to REPURCHASE.

A letter written by the attorney who represented both parties in an endeavor to perfect title by foreclosure, indicated as an arrangement made, that the sale was to take place in due and lawful form, and to be an effective and real sale, with the proviso that if plaintiff purchased, she should go into possession, but that at any time within one year after “taking title” she should reconvey to defendant upon being repaid her debt, interest and expenditures named. Held, that plaintiff, having purchased at the sale, was entitled to a deed from the referee, and was not liable to account as mortgagee in possession, and that an order requiring the delivery of such deed, and denying motion for account, was properly granted.

Appeal from an order of the general term of the court of common pleas for the city and county of New York, affirming an order of the special term of said court granting a motion by the plaintiff that the referee in the foreclosure proceedings herein be ordered to deliver to plaintiff a deed of the premises which are the subject-matter of the action, and denying a motion of defendant, Hannah Lyon, that the plaintiff account for the rents of the said premises, and surrender the premises on payment of the balance due, or that the premises be sold. The premises were sold at a public sale to plaintiff’s son, who assigned his bid to her. Defendant, who was present at the sale, claimed that it was not made in good faith, but with a secret understanding that the sale should be made to perfect the title, and if plaintiff or her agent had to purchase, the sale was to be ineffective and inoperative. This plaintiff denied. The facts relating to the letter written by the attorney who represented both parties are stated in the opinion.

W. J. Marvin, for app’lt.; W. B. Hornblower, for resp’t.

Whether the foreclosure sale at which the plaintiff’s son was the highest bidder proceeded, by agreement of the parties, upon the basis of a right of purchase secured to the mortgagor, or was meant to be ineffective

p. 506

and inoperative if the plaintiff, or some one representing her, became the highest bidder, because of the defective title, and the consequent danger of a sacrifice, is a question of fact about which the parties widely disagree, and the, affidavits presented are extremely contradictory. A letter, however, written by the attorney who represented both parties in the endeavor to perfect the title, and sent to the defendant, seemed to the general term the most reliable evidence of the agreement actually made, and the only prudent basis on which to solve the dispute. In that conclusion we are disposed to concur. The letter indicates, as the real arrangement made, that the sale was to take place-in due and lawful form, and be an effective and real sale, and not a sham; that if the plaintiff, or any one for her, became purchaser, she should go into possession as such; but. that at any time within one year “after taking title” she should reconvey to the defendant upon being paid the mortgage debt and interest, and subsequent expenditures, named.

Upon any construction of this letter, the plaintiff is entitled to a deed from the referee, and is not liable to account, as mortgagee in possession, since she is in as purchaser. The order made requiring the delivery of the referee’s deed, and denying the motion for an account, was therefore correct, and must be affirmed.

But this determination leaves open the question of the rights of Mrs. Lyon under the contract for repurchase. She is at liberty to seek-to enforce it; and the inquiries, whether, upon a correct construction of the agreement, she will be in time or too late, the extent and nature of the contract, and its validity and obligations, are left open to be determined in' such action or proceeding as may be instituted for that purpose.

The order should be affirmed, with costs.

All concur. _