Welsh v. Schoen — 36 N.Y. St. Rep. 538

Majority

p. 538

S. Charles Welsh, Trustee, App’lt, v. Henry Schoen et al. Louis Ettlinger, Purchaser, Resp’t.

(Supreme Court, General Term, First Department,

Filed January 16, 1891.)

Headnote

1. Foreclosure—Notice oe pendency—Code Civ. Pro., § 1671.

The provisions of § 1671 of the Code do not include a case where the purchaser or incumbrancer has, in fact, become possessed of the premises.

2. Same—Purchaser.

Where the persons so in possession are not made parties to the action, a complete title with an immediate right of possession cannot be given to the purchaser at the sale, and hence he is entitled to be relieved from his purchase.

Appeal by the plaintiff from an order relieving the respondent, Louis Ettlinger, from his purchase of premises known as No. 2250 Second avenue, and directing the 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, the expenses of searching and examining the title and for referee’s fees, with the costs of the motion.

Grata Nathan, for app’lt; John B. Talmage, for resp’t.

This action was for the foreclosure of a mortgage upon the premises in question. It was commenced by the service

p. 539

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 encumbered 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 Griesmeyer, 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 Gfeorge 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. Neither of these three persons were 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 § 1671 of the Code of Civil Pro. 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 cases 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. It 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 case 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 ■conveyances or incumbrances. And has been so in effect declared by the case of Phelan v. Brady, 119 N. Y., 587 ; 30 N. Y. State Rep., 256.

Through this possession the plaintiff become chargeable with

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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, 8 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 ten dollars costs and the disbursements.

Van Brunt, P. J., and Brady, J., concur.