Opinion
Decided January 31st, 1936.
Defendant, a tenant in common of the premises in question, purchased the tax title, served notice on the other owners and made demand for rent from the tenants. Having collected the rent for a period, he surrendered possession of the premises to the purchaser at the foreclosure sale thereof who had paid him the principal and interest due for redemption from the tax sale. Held, that complainant having recovered judgment against the corporation owning an undivided one-half interest in the premises and having issued execution on the company's interest in the money now in defendant's hands, complainant is entitled to one-half the net rents collected by defendant, the company not resisting complainant's claim.
Appeal of Milton Lubash.
On appeal from a decree of the court of chancery advised by Vice-Chancellor Fielder, who filed the following opinion:
"The bill of complaint has been amended by striking out the name of John J. Lenahan as trustee for Sol Lubash and by substituting the name of Herbert Scott as such trustee and Scott has entered his appearance to complainant's suit.
"The premises 883-885 Bergenline avenue, Union City, were owned by Del-Jersey Realty Company, Harry Tepper and Sol Lubash as tenants in common; the Del-Jersey Realty Company owned an undivided one-half interest and the other tenants in common an undivided one-quarter interest each. Sol Lubash was adjudicated a bankrupt and Herbert Scott his trustee in bankruptcy. The premises were sold for taxes January 24th, 1930, to Milton Lubash, who went into possession and collected rent therefrom to and including July 16th, 1931, when the premises were sold under foreclosure of a mortgage thereon and the purchaser at foreclosure thereupon redeemed from the tax sale by paying Milton Lubash the full amount of principal and interest due him and he surrendered his possession. He had collected $8,305 gross rent from which he claims expenditures of $1,647 for maintenance and upkeep and has a balance of $6,658 in hand, to which he has no personal claim.
"The complainant, Arena, recovered judgment in the Hudson common pleas May 28th, 1930, against Del-Jersey Realty Company and others for $5,892.48, on which he issued execution to the sheriff, who levied on Del-Jersey Realty Company's interest in the money in Lubash's hands. A rule to show cause on Lubash for the payment of said money on account of complainant's judgment was discharged by the common pleas court because Lubash denied owing a debt to Del-Jersey Realty Company and thereupon complainant filed his bill in this cause wherein he seeks an account from Lubash for the rent collected by him and prays that he be held accountable therefor to Del-Jersey Realty Company and the other alleged tenants in common of the premises and that the amount due Del-Jersey Realty Company be ordered paid by him to complainant on account of complainant's judgment.
"The Del-Jersey Realty Company filed no answer and a decree pro confesso was entered against it. The defendant Harry Tepper does not set up in his answer a defense to complainant's prayer for relief but says if Lubash is accountable for said rent money to complainant, he is also accountable to him (Tepper) for one-quarter share thereof. The defendant Herbert Scott as trustee has entered an appearance wherein he merely submits to the jurisdiction of the court and consents to abide by the court's decree. The defendant Milton Lubash resists complainant's prayer for relief on the novel ground that under the Tax Sale act he was not entitled to enter into possession of the premises and collect rent therefrom and that having wrongfully collected such rent, if he is responsible to any one therefor, he is accountable to the tenants and not to the owners of the premises. It seems to be his idea that he can rest supine and retain money not his unless the tenants demand return of the rent paid by them and if he complies with their demand, the owners must look to the tenants for payment of rent and complainant must attempt to collect his judgment from the tenants who wrongfully paid Lubash. If Lubash had no right to collect the rent, then under his theory, he must refund to the tenants all he collected from them and he had no right to make expenditures of $1,647 therefrom and if he collected the rent wrongfully, perhaps he should be held liable to the owners for the gross rent collected.
"When Lubash purchased the tax title, he served notice thereof on the owners and included therein a demand on the tenants for rent and he seized possession rightfully or wrongfully. After the amount due him on his tax sale had been satisfied by the new owner of the property, he held no claim on the rent in his hands collected by him either of right or through his own wrong and he should have paid it over to the old owners of whom, the proofs show, the Del-Jersey Realty Company was one and having failed to do so he is accountable for one-half of the net rents, or $3,329, to that corporation and complainant, under his judgment, is entitled to stand in place of Del-Jersey Realty Company and collect that sum from Lubash to apply on his judgment. There will be a decree accordingly. It is to be noted that Del-Jersey Realty Company does not resist complainant's claim. Since the defendants Harry Tepper and Herbert Scott trustee have not counter-claimed for any relief against Milton Lubash, no relief can be granted them."
Messrs. Lichtenstein, Schwartz Friedenberg, for the appellant.
Mr. Alfred A. Modarelli, for the respondents.
The decree appealed from will be affirmed, for the reasons expressed in the opinion delivered by Vice-Chancellor Fielder in the court of chancery. For affirmance — THE CHIEF-JUSTICE, LLOYD, CASE, BODINE, DONGES, HEHER, PERSKIE, HETFIELD, DEAR, WELLS, WOLFSKEIL, RAFFERTY, JJ. 12.
For reversal — None.