Wyckoff v. Scofield — 53 N.Y. Super. Ct. 237

Majority

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MARY EMMA WYCKOFF v. SETH W. SCOFIELD, ET AL. In re Petition of WILLIAM S. MADDOCK. WILLIAM S. MADDOCK, Appellant, D. J. NOYES, Receiver, the Plaintiff in the Action, and SMITH and SCOFIELD, Defendants therein, Respondents.

Headnote

Receiver in mortgage cases—As to liability of, as owner— Unsafe walls — Fire Department—Consolidation Act qf 1882.

A receiver of rents and profits appointed in a foreclosure action is not vested with the legal title of the premises, and is not the owner thereof—• A liability therefore which is cast by statute on the owner of a building, by reason of such ownership solely, does not rest upon him.

The petitioner under an authority of the Fire Department claimed to have been given under section 478 of the Consolidation Act of 1882, entered upon the mortgaged premises, and did work and furnished materials, which it was claimed were necessary to render safe the walls of the building. He then applied to the court to be paid the amount of his expenditures out of rents and profits in the receiver’s hands. Held, that his only remedy was that given by the act, viz.: An action against the owner of the building, who in this case was the mortgagor; and that the fund in court being for the benefit of the mortgagee could not be appropriated to meet a liability or pay a debt of the mortgagor. But if it appeared that there would be a surplus of rents after paying the mortgage, a different question would arise.

Before Sedgwick, Ch. J. and Ingraham, J.

Decided May 3, 1886.

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Appeal from order denying motion to direct the receiver of rents and profits appointed, in the above entitled action (which is an action to foreclose a. mortgage on certain real estate), to pay the claim of the petitioner for the amount expended by him in shoring up a wall of the house on the mortgaged premises.

The facts sufficiently appear in the opinion.

Lemuel Skidmore, attorney and of counsel for petitioner, appellant,

on the questions involved in the general term opinion, argued :—I. Upon general principles of equity the receiver is the hand of the court and his possession is the possession of the court (High Receivers, art. 134, p. 89 ; Foster v. Townsend, 68 N. Y. 206 ; Carey v. Long, 43 How. 498 ).

II. Had the receiver applied to the court for permission to take the necessary measures to support the wall the court would have ordered him to do so, or had the receiver done the work and paid for it, the. court would have sanctioned such payment. The receiver does not represent the interest of the plaintiff mortgagee alone, but of all the parties to the action (High Receivers, art. 650, p. 424 ; art. 180, p. 122 : Green v. Bostwick, 1 Sandf. Ch. 186 ).

III. The court, having taken possession of the property for the benefit of all parties concerned, is bound in good conscience to provide against its destruction, and this obligation would extend to compensation of the adjoining owner for moneys necessarily laid out upon it in a case of pressing emergency where there was no time to apply to the court for directions (Hoover v. Montclair R. R., 29 N. J. Eq. 4 ; Jerome v. McCarter, 4 Otto [U. S.] 738).

IV. The petitioner’s right to compensation is established by Laws of 1882, chap. 410, § 473 (N. Y. Consolidation Act). It is clearly'within- the intention and spirit of the statute that the person having the control and usufruct of a building should be required, in the interest of

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public safety, to support its foundations so as to prevent its tumbling into an adjacent excavation. The word “owner” in this section is a general word, and should be construed liberally in the interest of public safety. It has been held in similar statutes to embrace a tenant occupying premises (Woodward v. Billericay Highway Board, 11 L. R. Ch. Div. 214).

Y. It is clear that Scofield, the technical owner of the equity of redemption, was bound by the statute, and is hable to reimburse the petitioner. Such owner, therefore, being liable, the receiver, as representing his interest, should be ordered to satisfy this liability out of the rents and profits of the building, just as he would be ordered to pay taxes in order to prevent a sale or forfeiture (In re Blanc, 14 Hun, 8 ).

YI. The practice of allowing a receiver of rents and profits of mortgaged premises, upon application of the mortgagee in an action to foreclose the mortgage, is not founded upon statute, but upon general principles of equity (Astor v. Turner, 11 Paige, 436). In law, the rents and profits belong to the mortgagor until a sale of the premises. A practice founded in equity should be governed by equitable principles and modified to meet the justice of the case. It would be grossly inequitable to allow the mortgagee to appropriate the money actually expended on the premises to preserve them from destruction, and to leave the liability upon the owner of the equity of redemption (not being the mortgagee) to repay this money under the statute, when he had no control of and no real interest in the premises at the time the expenditure was made by petitioner.

Samuel J. Noyes, attorney, and of counsel for receiver, respondent,

on the questions involved in the opinion of the general term, among other things argued: —Section 473 of chapter 410 of Laws of 1882, gives to a person doing the work, “under and by direction of” the fire department, the right to bring an action against the

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owner for the cost of the work done “ in the same manner as if he had been employed to do the said work by the owner,” &c., and it gives no specific lien on the premises. If the owner had employed this petitioner to do the work, he would have had the right to bring an action to enforce the ordinary lien of a mechanic, and nothing further. He might have sued the owner in a simple action of assumpsit, or he might have filed a mechanic’s lien. But if he has the right to the ordinary mechanic’s lien, his right is subordinate to all prior liens and incumbrances. His rights are subordinate to the lien of the plaintiff’s mortgage; and the funds in the hands of the receiver are there only for the benefit and protection of the mortgage. The utmost stretch of the equity powers of the court in such a case would possibly extend to the right to apply, in a proper case, for a portion of the surplus moneys. But we regard the rights of the petitioner as of a strictly legal character, and not equitable. He has chosen to pursue his supposed legal remedy. The petitioner has, therefore, mistaken his remedy.

By the Court.

Irrespective of the statute, it is very clear that the petitioner would have no claim as against either the receiver or the owner of the mortgaged premises, to recover the amount paid for shoring up the wall of the house on the said premises. Petitioner was not bound to protect the buildings adjoining the land on which he was building, and, as long as he has committed no trespass upon the adjoining property, he was not liable for any injury caused thereto. If the owner or those interested in the building preferred to let it fall rather than to take the necessary steps to protect it, the petitioner could not compel them to do anything to their own property by doing it himself and then suing to recover what he had expended.' If he, under such circumstances, did any work on the property of others, he was a mere volunteer, and in the absence of an express or implied contract, the owner of the prop

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erty on which the work was done would not be liable to pay for such work.

The petitioner, however, claims that he is entitled to be paid for the expenses incurred by him in protecting the building adjoining the property on which he was building, by virtue of section 413 of the statute known as the Consolidation Act of 1882. That section provides that if the person or persons whose duty it shall be, under existing laws, to preserve or protect the wall of a building from injury, shall neglect or fail so to do after notice from the fire department, the department may enter upon the premises and take such steps as in its judgment may be necessary to make the same secure and safe at the expense of the persons owning the building, and any person doing said work or any part thereof under and by direction of the said department may bring and maintain an action against the owner or owners of said wall or building for any work done upon, or material furnished, in the same manner as if he had been employed to do the work by the said owner or owners of said premises.

From the evidence taken before the referee, it would appear that the parties proceeded under this section. A notice was given to do the work by posting it on the buildings and serving it on the receiver on July 28, 1884, and on August 2, 1884, the agent of the petitioner was authorized, under the provisions of this section, to do the work necessary to make the walls described in the notice safe and secure, and prevent the same from becoming unsafe or dangerous, and under that authority the petitioner did the work and furnished the materials, to recover for which this proceeding is brought.

It is very clear, however, that this section would not authorize this proceeding. The statute creates the liability, and the remedy must be confined to that given by the statute, that is, an action against the owner. The receiver is not the owner ; he is simply an officer of the court to collect the rents and profits of the mortgaged premises, for the protection of the mortgagee, in case the

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property should be found insufficient to pay the amount due on the mortgage, and until the decree of foreclosure and sale under it, the legal title is still in the mortgagor and he is still the owner.- The mortgagee is not the owner, and it does not appear that he will purchase the property at the sale, under the decree, or that he will ever become the owner of the property.

It cannot be said, therefore, that because the owner would be liable in an action as if he had made an agreement to pay for the work done, that a fund for the benefit of the mortgagee should be liable to pay such debt of the owner, yet the only liability that the statute imposes is that the owner shall be liable to the persons doing the work, as if he had made a contract with such person to do such work. No lien on the property is created by the statute, and there is no obligation on the mortgagee to pay. If it appeared that there would be any balance of the money in the hands of the receiver after paying the mortgage, a different question would arise.

It is not claimed by the appellant that there is any other provision of the statute that would entitle him to the relief asked, and for the reason stated, we think the order should be affirmed, with $10 costs and disbursements.

Sedgwick, Ch.J., concurred.