Gates v. De La Mare

• Decision Date: 01 May 1894
• Citation: 37 N.E. 121,142 N.Y. 307
• Parties: GATES et al. v. DE LA MARE.
• Court: New York Court of Appeals Court of Appeals

142 N.Y. 307

37 N.E. 121

GATES et al.

v.DE LA MARE.

Court of Appeals of New York.

May 1, 1894.

Appeal from supreme court, general term, first department.

Action by Ephraim C. Gates and others against James C. De La Mare (substituted as defendant in place of the city of New York, upon the city paying the amount of the award into court) to recover the amount of an award of damages by the commissioners of estimate and assessments in favor of Frank Denninger, occasioned by the taking of his property for a city street. From a judgment of the general term (20 N. Y. Supp. 837) affirming an interlocutory judgment overruling a demurrer to the answer, plaintiffs appeal. Reversed.

Appeal from the affirmance by the general term of the first department of an interlocutory judgment entered in favor of the defendant, overruling a demurrer to his answer. The question presented upon this appeal arises upon the following facts: September 16, 1887, one Denninger, being the owner of certain lands in the city of New York, on that day executed, together with his wife, to the Harlem Savings Bank, a mortgage thereon for $5,000. Afterwards, proceedings were instituted in behalf of the mayor, aldermen, and commonalty of the city of New York for the purpose of acquiring title to lands required for Melrose avenue, which was laid out through the lands of Denninger. On June 7, 1888, commissioners of estimate and assessment were appointed in the proceedings. On November 16, 1888, Denninger entered into an agreement in writing with the defendant, an attorney of the court, whereby he authorized him to take proceedings to have any awards which might be made to Denninger for the part of his property to be taken for the avenue increased, and any assessment upon any of his property reduced, and agreed that in case the defendant should succeed ‘in obtaining any increase of such awards, or reduction of such assessments, to pay him (defendant) one-quarter of the amount of such increase or reduction.’ The commissioners made their preliminary report, of which notice was given February 14, 1890, in which they awarded to Denninger, for the part of his land to be taken for the avenue, the sum of $8,100. The defendant thereupon appeared before the commissioners, and, as the result of his efforts, the award was increased $3,484 over that originally made. The final report of the commissioners was dated October 1, 1890, and was confirmed by order of the court May 1, 1891. Meanwhile, on February 4, 1891, after the date of the final report, but before its confirmation, an action was commenced against Denninger and others for the foreclosure of the mortgage to the Harlem Savings Bank. The city of New York was not made a party to the foreclosure action. March 28, 1891, judgment of foreclosure and sale was entered. April 21, 1891, the mortgaged premises were sold at public sale, pursuant to the judgment, to one Jacob L. Toch. The amount bid does not appear. The sum ascertained by the judgment to be due on the mortgage was $5,461.73. May 25, 1891, the referee appointed in the foreclosure judgment to make the sale executed to the purchaser a deed in which was recited the prior judgment and proceedings, and which purported to convey to Toch the whole premises embraced in the mortgage to the Harlem Savings Bank. The city has paid into court the amount of the award made to Denninger. The defendant claims a lien on the award, under his agreement with Denninger of November 16, 1888, to the extent of $871, with interest, that being one-fourth of the increase of the final award over the original award made by the commissioners. The plaintiffs, who have succeeded to the rights of Jacob L. Toch, the purchaser on the foreclosure sale, claim that by his purchase, and the conveyance made pursuant thereto, the title to the whole award became vested in him, free from any lien in favor of the defendant.

George W. Stephens, for appellants.

James C. De La Mare, in pro. per.

ANDREWS, C. J. (after stating the facts).

The mortgage to the Harlem Savings Bank was a paramount lien on the mortgaged property. The title of Denninger was subject to the mortgage, and any rights in the land which he might subsequently create would be subordinate to the mortgage. The power of sale upon default in the payment of the mortgage was an essential element of the mortgage security, and could not be taken away or impaired by any act or contract of the mortgagor. The lien of mortgage attaches, not only to the land in the condition in which it was at the execution of the mortgage, but to everything which becomes by annexation a part of the realty during the existence of the mortgage. Improvements made upon the land, and buildings or structures erected thereon, by the owner, are immediately covered by the lien of the mortgage, as effectually as though they had existed when the mortgage was executed. The statute authorizes liens in favor of mechanics and material men who have furnished labor or materials in the erection of buildings under a contract with the owner of lands. But liens so acquired cannot displace the lien of a prior mortgage, although the mortgage security has been strengthened by the new erections, nor, indeed, even though they furnished the principal element of value which made the mortgage collectible. We refer, of course, to cases where the mortgagee was not a party to the transaction, and had not consented to subordinate his remedy to the claims of other creditors. The agreement between Denninger and the defendant was made in November, 1888,-more than a year after the mortgage had been made to the savings bank. The bank was not a party to the agreement, nor, so far as appears, did it have any notice of its existence until after the sale on...