Armand's Engineering, Inc. v. Town & Country Club, Inc.

• Decision Date: 30 July 1974
• Docket Number: No. 73-81-A,73-81-A
• Citation: Armand's Engineering, Inc. v. Town & Country Club, Inc., 324 A.2d 334, 113 R.I. 515 (R.I. 1974)
• Parties: ARMAND'S ENGINEERING, INC. v. TOWN AND COUNTRY CLUB, INC.
• Court: Rhode Island Supreme Court

Page 334

324 A.2d 334

113 R.I. 515

ARMAND'S ENGINEERING, INC. v. TOWN AND COUNTRY CLUB, INC.

No. 73-81-A.

Supreme Court of Rhode Island.

July 30, 1974.

[113 R.I. 521] Donald R. Lembo, Don G. Sinesi, North Providence, for plaintiff-appellee.

Feiner & Winsten, Providence, for appellants Sheldon L. Gerber and Abbott Katzman, the assignees of the third mortgagee, Providence Electric Co., Inc.

OPINION

DORIS, Justice.

The respondent corporation, Town and Country Club, Inc., operator of a swimming club in the town of Smithfield, ceased operations and abandoned the premises on which the business was located in the fall of 1969. At the time, there were three outstanding mortgages of record on the real estate of the respondent. When the respondent abandoned the premises, Sheldon L. Gerber and Abbott Katzman, the assignees of the third mortgagee, Providence Electric Co. Inc., hereinafter referred to as appellants, entered upon and took possession of the premises and commenced foreclosure proceedings under the terms of the third mortgage by scheduling a foreclosure sale for April 29, 1970.

Armand's Engineering, Inc., a creditor of respondent corporation, petitioned the Superior Court for the appointment of a receiver for respondent corporation. Temporary coreceivers were appointed and suits by creditors were enjoined. The appellants continued the foreclosure sale scheduled for April 29, 1970 until May 20, 1970, and petitioned the Superior Court for leave to continue foreclosure proceedings under the terms of the third mortgage. On May 19, 1970, in Superior Court, the temporary coreceivers were appointed permanent coreceivers, appellants' petition to proceed with the foreclosure sale was granted, and the sale, subject to prior recorded mortgages, was set for May 20, 1970. The appellants were also ordered to report the results of the sale to the coreceivers. The order provided that any excess remaining from the sale after the payment of the mortgage and the expenses of the sale was to be distributed in accordance with an agreement to be reached by the coreceivers and counsel for appellants or, in the event no agreement was reached, distribution was to be as ordered by the court after hearing.

On May 20, 1970, at the foreclosure sale appellants were the successful bidders. The amount bid was $18,000, whereas the amount due under the mortgage, including principal and interest, was $11,359.84, thereby creating a surplus or excess. At this point in time, the record discloses that appellants were also the assignees of the two prior outstanding mortgages. The appellants' counsel and the coreceivers were unable to agree as to the disposition of the surplus funds remaining from the foreclosure sale. A hearing was held in Superior Court to determine the disposition of the surplus funds. The Superior Court justice rendered a decision wherein he found that the property was sold subject to the two prior outstanding mortgages and that the surplus funds could not be held to satisfy one of the prior mortgages.

Subsequently, in accordance with said decision, an order was entered on September 12, 1972, directing the disbursement of the surplus funds in the amount of $3,485.16, plus interest, to the coreceivers of respondent corporation, Town and Country Club, Inc.

On September 20, 1972, appellants filed a motion to vacate the order of September 12, 1972, which motion was heard and denied on October 25, 1972, by a different Superior Court justice. An order was entered on October 27, 1972, wherein the order of September 12, 1972, was modified insofar as it related to the date by which the surplus funds were to be turned over to the coreceivers. On October 28, 1972, appellants filed their appeal to this court from the order entered October 27, 1972. It is that appeal which is now before us.

Before we proceed to consider the main issue raised on appeal, we must dispose of the coreceivers' contention that the only matter properly before us is appellants' appeal from the denial by the Superior Court of a motion to vacate the order of September 12, 1972, wherein the surplus funds were ordered turned over to the correceivers.

The coreceivers argue that since appellants' appeal was filed 46 days after the order of September 12, 1972, which mandated the disbursement of funds to the coreceivers, the appeal was beyond the 20-day limit allowed for appeal under the Rules of the Supreme Court of Rhode Island, and the issue of the validity of the disbursements order of September 12, 1972, is not properly before this court. They further contend that the motion to vacate should be construed as being filed under Super.R.Civ.P. 60. The appellants maintain that the motion to vacate the order of September 12, 1972, should be construed as being filed under the provisions of Rule 4(a), which states in relevant part:

'The running of the time for filing a notice of appeal is terminated * * * upon a timely motion * * * (3) granting or denying a motion under Rule 59 to alter or amend the judgment * * *.'

They further argue that the motion to vacate the order should be treated as being filed under Rule 59(e), rather than Rule 60(b) as contended by the coreceivers, and rely on the comment in 1 Kent, R.I.Civ.Prac. § 59.10 at 447 to buttress this argument:

'Rule 59(e) enables a party to move to alter or amend the judgment not later than 10 days after its entry. A motion to vacate a judgment is proper under this subdivision. Such a motion made within 10 days after entry of judgment should be treated as made under this subdivision rather than under Rule 60(b). The difference is important, for a motion under Rule 59(e) suspends the finality of the judgment and the time for claiming an appeal, while Rule 60(b) motion does neither.'

We agree that the motion to vacate should be construed as being filed under Rule 59(e) and thereby treated as a motion to amend or alter a judgment even though labeled as a motion to vacate. The appeal filed on October 28, 1972, following the denial by the Superior Court of the motion to vacate, is therefore within the time limit...