Cowen v. Arnold — 35 N.Y. St. Rep. 134

Majority

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Newman Cowen et al., App’lts, v. Christina Arnold et al., Resp’ts.

(Supreme Court, General Term, First Department,

Filed December 29, 1890.)

Headnote

1. Foreclosure—Apportionment oe rents collected by receiver.

A purchaser under a sale in foreclosure is entitled to the rents from the day of the delivery of the deed, and where a receiver of the rents and profits had been appointed pendente lite and rent, payable in advance, was in his hands, Held, that suchrent must be apportioned, and that such receiver was entitled only to so much thereof as had actually accrued when the deed was delivered.

3. Same.

Upon an application by the purchaser for such an apportionment it seems that the owner of the equity of redemption may be entitled to be heard'

Appeal from order of Justice Patterson, denying the motion of the purchasers at a sale under foreclosure in this action' to apportion the October rents for 1889 to the purchasers, from the 4th of October, the day of the delivery of the referee’s deeds.

Lewis Sanders, for app’lts; Charles H. Lovett, for resp’ts.

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

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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 4, and the expenses incurred after the 4th of October, during that month, amounting to twenty-nine dollars, 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 seventy-seven dollars and one cent, 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 Finlc has no interest whatever in the fund that is left, for reasons which will appear. The rent was payable, as already suggested, in advance. but the only rent the receiver could take was for the first, second and third days of October, the delivery of the deed making him functus officio thereafter and entitling the plaintiffs to the rent accruing subsequent^. 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., 433 ; 3 N. Y. State Rep., 659. 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 ; The Mayor v. Ketchum, 67 How. Pr., 161 ; Cheney v. Woodruff, 45 N. Y., 98 .

These cases, 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. FTone 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 respondent’s

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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 re-heard at the special term, when, if necessary, the owner of the equity of redemption can be brought in.

Van Brunt, P. J., and Daniels, J., concur in result.