Anderman v. 1395 E. 52nd St. Realty Corp.

• Decision Date: 30 April 1969
• Citation: 303 N.Y.S.2d 474,60 Misc.2d 437
• Parties: Samuel ANDERMAN and Esther Anderman, Plaintiffs, v. 1395 E. 52ND STREET REALTY CORP., New York State Electric & Gas Corporation and People of the State of New York, Defendants.
• Court: New York Supreme Court

Page 474

303 N.Y.S.2d 474

60 Misc.2d 437

Samuel ANDERMAN and Esther Anderman, Plaintiffs, v. 1395 E. 52ND STREET REALTY CORP., New York State Electric &

Gas Corporation and People of the State of New

York, Defendants.

Supreme Court, Special Term, Sullivan County.

April 30, 1969.

Wiess & Costa, Monticello, for defendant New York State Electric & Gas Corporation.

Sakofsky & Sakofsky, South Fallsburg, for Sakofsky & Greenberg.

Louis J. Lefkowitz, Atty. Gen. of State of New York, Albany, for defendant People of the State of New York.

Henry Temes, Woodridge, for Anthony Lucyk, d/b/a Lucyk Const. Co.

G. Hilton Rosen, Monticello, for Rofam Associates, Inc.

MEMORANDUM

JOHN T. CASEY, Justice.

On June 9, 1964 realty owned by the defendant, 1395 E. 52nd Street Realty Corp. (hereinafter called the 1395 Corp.) was sold and a referee's deed delivered to the purchaser pursuant to a judgment of foreclosure and sale which was obtained by the plaintiff mortgagees. After payment of the statutory costs and expenses, a surplus of $5188.33 was deposited with the Treasurer of Sullivan County.

Five parties claim an interest in the surplus. A referee, appointed to determine the priority of these claims and the order of distribution, found the New York State Tax Commission, the New York Electric & Gas Co. and the Lucyk Construction Co., Inc. entitled to payment in that order. It was stipulated before the referee that the documents submitted by the various claimants would form the basis of his determination since the facts were undisputed.

All the parties agree that the claim of the New York State Tax Commission in the amount of $61.00 plus interest from March 15, 1965 at 3 1/4% Per annum is entitled to first priority as the referee determined and it is so found. Goldberg v. Feltmans' of Coney Island, Inc. et al., Sup., 144 N.Y.S.2d 250.

The New York State Electric & Gas Co. (hereinafter called the Electric Co.) is the vendee for fair consideration of an easement conveyed to it by the 1395 Corp. and recorded on July 3, 1963. At that time the plaintiffs' mortgage was a duly filed and recorded lien upon the realty and the easement was purchased with notice thereof, and became subordinate thereto. Consequently the easement was extinguished by the foreclosure sale. Rector, etc., of Christ Prot. Episc. Church v. Mack, 96 N.Y. 488; Naccash v. Hildansid Realty Co., 236 App.Div. 686, 257 N.Y.S. 750, app. dis. 262 N.Y. 588, 188 N.E. 76. The Electric Co. is, therefore, entitled to recover the value of the loss of its easement from the surplus money. Winthrop v. Welling, 2 App.Div. 229. Since the original purchase and the repurchase necessitated by the foreclosure was $1500.00, it is generally agreed that the amount is the fair value of the loss. Therefore, the claim of the Electric Co. in the amount of $1500.00 plus interest at 3 1/4% Per annum from July 15, 1964 is entitled to second priority as the referee so found.

The third claim (that of Lucyk Construction Co., Inc.) is founded upon a default judgment taken by Lucyk against 1395 Corp. and docketed on May 14, 1965, (subsequent to the sale and delivery of the referee's deed in the foreclosure action.) Lucyk claims priority as a mechanic's lienor because its judgment was for materials furnished or labor performed for the improvement of the realty prior to foreclosure. Admittedly, however, Lucyk failed to file any notice of lien as required by the Lien Law. (Lien Law §§ 3, 10) It may not, therefore, claim the status of a mechanic lienor. Billson Housing Corp. v. Harrison, 26 Misc.2d 675, 205 N.Y.S.2d 387; see Ingram & Greene, Inc. v. Wynne, 47 Misc.2d 200, 204, 262 N.Y.S.2d 663, 667. Recognizing this possibility Lucyk further urges that it should be regarded as the holder of an 'equitable' lien. Equitable liens arise only upon proof that money was expended for the improvement of the premises by a person in a confidential relationship to the owner; Petrukevich v. Maksimovich, 1 A.D.2d 786, 147 N.Y.S.2d 869; Marum v. Marum, 21 Misc.2d 474, 194 N.Y.S.2d 327; see Billson Housing Corp. v. Harrison, supra, or upon proof of an agreement that the premises would be held as security for the obligation. See Billson Housing Corp. v. Harrison, supra. Failing to show either a confidential relationship or an agreement that the premises would be held as security for the obligation, Lucyk's claim of 'equitable' lienor is untenable. Contrary to the referee's determination of third priority, Lucyk is merely a judgment creditor whose judgment was docketed after the delivery of the referee's deed in the foreclosure action. Judgments docketed prior to delivery of a referee's deed in a mortgage foreclosure are liens on realty that pass to surplus moneys and are payable in order of priorty of docketing; Warwick Savings Bank v. Long Island Chapter K. of C. Social Services, Inc., 253 App.Div. 276, 1 N.Y.S.2d 877, or as otherwise provided under Section 13 of the Lien Law. Cobleskill Savings & Loan Ass'n. v. Rickard, 15 A.D.2d 286, 223 N.Y.S.2d 246; Corbin Kellogg Agency v. Tasker, 248 App.Div. 58, 289 N.Y.S. 156; Betcher v. Rademacher, 35 Misc.2d 693, 230 N.Y.S.2d 535. Judgments docketed After delivery of referee's deed in foreclosure proceedings, however, are not liens which pass to surplus moneys since there is no lien in existence at the time of the foreclosure sale which can be transferred to the fund. Goldberg v. Feltmans' of Coney Island, Inc. et al., Sup., 144 N.Y.S.2d 250, supra; Nutt v. Cuming, 155 N.Y. 309, 49 N.E. 880. Claims to surplus moneys and judgments docketed after delivery of the referee's deed are entitled only to distribution in proportion to the size of the...