Cent. Hanover Bank & Trust Co. v. Elsner (In re Hess' Will)

• Decision Date: 23 November 1937
• Citation: 11 N.E.2d 561,276 N.Y. 121
• Court: New York Court of Appeals Court of Appeals
• Parties: CENTRAL HANOVER BANK & TRUST CO. v. ELSNER et al. In re HESS' WILL.

276 N.Y. 121

11 N.E.2d 561

CENTRAL HANOVER BANK & TRUST CO.

v.ELSNER et al.

In re HESS' WILL.

Court of Appeals of New York.

Nov. 23, 1937.

Action by the Central Hanover Bank & Trust Company (successor by merger to the Central Union Trust Company of New York), as trustee of trusts created by the last will and testament of Selmar Hess, deceased, for the benefit of Gertrude R. H. Elkus and another, against Clara Eisner, James J. Conway, guardian ad litem for Pearl Weiss, also known as Pauline Weiss, and others, to foreclose a mortgage. From an order of the Appellate Division (249 App.Div. 843, 294 N.Y.S. 344), unanimously affirming an order of the Special Term denying a motion to confirm a referee's report as to the market value of the mortgaged property and fixing the value thereof, plaintiff appeals by permission of the Court of Appeals.

Orders reversed, and matter remitted to the Special Term for further hearing. Appeal from supreme Court, Appellate Division, Second department.

Henry A. Ingraham, of New York City, for appellant.

Max H. Zabronsky, of New York City, for respondents.

HUBBS, Judge.

In this action to foreclose a mortgage, a motion was made for a deficiency judgment. Conflicting affidavits were presented as to the value of the property and it was referred to an official referee ‘to take testimony as to the fair market value of the premises and report the same to this court, together with his opinion.’

The referee reported that, in his opinion, the fair market value of the property was $9,800. A motion having been made at Special Term to confirm the referee's report, the justice presiding viewed the premises, and wrote an opinion in which he referred to the fact that the referee based his findings largely on the selling price in 1934 of two parcels on the same block, that no facts as to these sales were brought out and stated that slight inquiry revealed that one was a resale by the former holder of the property who bid it in at foreclosure. He also referred to condemnation proceedings in 1931 affecting property within a few hundred feet of the premises under consideration and to the fact that the plaintiff trustee extended the mortgage being foreclosed in 1930 and again in 1934. He then stated that after reading all the papers submitted and viewing the property the court found that it could not agree with the learned referee. The motion to confirm the referee's report was denied and the court fixed the value of the premises at $12,000.

Section 1083-a of the Civil Practice Act provides that on a motion for leave to enter a deficiency judgment in a mortgage foreclosure action the court ‘shall determine, upon affidavit or otherwise as it shall direct, the fair and reasonable market value of the mortgaged premises as of the date such premises were bid in at auction or such nearest earlier date as there shall have been any market value thereof and shall make an order directing the entry of a deficiency judgment.’

The statute places upon the court the responsibility of determining the market value. In this instance the court, faced with a conflict in the affidavits submitted, referred it to an official referee to take testimony and report with an opinion as to fiar market value. Nothing in the statute makes binding upon the court the opinion of an official referee and nothing in the statute limits the court to a consideration of the testimony produced before an official referee. Such testimony becomes an added element of proof to be considered by the court. If there is in the record, including the affidavits and the testimony, evidence sufficient to make a question of fact, the decision of the...