Opinion
April 16, 1952.
John J. Mangini, New York City, for defendant, for the motion.
Delafield Pucillo, Monroe (Augustus W. Bennett, Newburgh, of counsel), for plaintiff, opposed.
This is an action to foreclose a real estate mortgage and the complaint is in the usual form of one in such action except for paragraph numbered "Thirteenth" and two certain agreements referred to therein and annexed to the complaint; and except for that part of the prayer for judgment which demands that "any sale of the mortgaged premises shall be subject to the terms and conditions of the agreements" in question.
The mortgage was a purchase money mortgage, and the sole parties to this foreclosure action are the mortgagee and the mortgagor. Paragraph "Thirteenth" merely alleges that the parties entered into the said two agreements and refers to them and makes them a part of the complaint. The first agreement entered into was made simultaneous with the execution and delivery of the deed and purchase money mortgage and recites that it was made in part consideration of the conveyance of the property. The agreement provides that the grantee (the mortgagor) shall make available without charge to the grantor (the mortgagee) and his wife a certain room, as long as each shall live and with board for each during a certain season of each year. It is further provided that: "In the event of an actual sale of the property by the party of the second part (the grantee), such party or his successor in interest, shall have the right to terminate this agreement as to each of the parties, namely, Anthony Castelli (the grantor) and Caroline Castelli, his wife, who may be living at the time of such termination, by payment, to each survivor, of the sum of Fifteen Hundred ($1500.00) Dollars, and upon payment of such sum under this agreement to each of the parties, or to the survivor of them, as the case may be, then this agreement and all obligations hereunder shall cease and come to an end."
The second agreement annexed to the complaint is merely a reiteration of the first agreement, embodying its provisions practically verbatim, and was executed some time after the first agreement for the purpose of having the agreement acknowledged so that it might be recorded. The agreements therefore constitute in effect but a single agreement and are hereafter referred to as such. The agreement was not, however, recorded, because plaintiff claims that the County Clerk would not accept it as he was unable to fix the amount of mortgage tax payable.
The plaintiff now claims that the said agreement for lodging and board and for the payment of a sum on the sale of property in order to terminate the agreement should be held a lien against the property and the property sold under the mortgage subject to the agreement. The court, however, believes there is no sound basis for such contention. There is apparently no statement in the mortgage that it is subject to the agreement, and there are no words in the agreement itself indicating an intention to grant or convey any interest in the land or that the premises were to be held or transferred as security for the obligation of the contract. The general rule is: "A lien may be created only by contract, express or implied, with the owner of the property, or by some statute or fixed rule of law; it cannot be created by the court merely from a sense of justice." 53 C.J.S., Liens, § 2, page 833. Clearly the agreement does not create any legal interest in or lien upon the premises. See further, In the Matter of City of New York (Gov. Alfred E. Smith House), 193 Misc. 399, 83 N.Y.S.2d 689; Simon v. Burgess, 146 App.Div. 37, 130 N.Y.S. 642. The covenants therein for use of room with board during certain season of each year and for a payment to terminate the agreement are held personal in nature and not binding upon the real estate. And this court is further of the opinion that under the facts alleged, there is no basis for an equitable lien. "It may be pointed out that to find an equitable lien it is necessary that an intention to create such a charge clearly appear from the language and the attendant circumstances. Strict proof of such intention is required. As was said in the case of Di Niscia v. Olsey, 162 App.Div. 154, 155, 147 N.Y.S. 198: "The respondent would maintain this judgment on the theory of equitable lien. The difficulty in the way of affirmance is that proof of a breach of the contract only does not warrant this decree of the equity court. There should also appear proof that clearly established the intention that the premises would `be held, given or transferred as security for the obligation' of the contract." Pennsylvania Oil Products Refining Co. v. Willrock Producing Co., 267 N.Y. 427, 434, 196 N.E. 385, 387.
Equity will generally intercede to give effect to an agreement that a party shall have a lien, but there is no such agreement here. Also in a particular case compelling equities or a trust relationship may justify intervention of a court of equity to act where otherwise a party would have no adequate relief, but there are no compelling equities or trust relationship in the case at bar. Absent such compelling equities or trust relationship, the court may not act to create a lien where it does not affirmatively appear that any was intended.
In any event, if the plaintiff, by virtue of special circumstances, had a cause of action to establish an equitable lien based upon the agreement in question, such cause of action would be one separate from the cause of action to foreclose the mortgage. Such cause of action, if it existed, should be separately stated and numbered as such by virtue of the requirements of Rule 90 of the Rules of Civil Practice.
The motion is granted to strike from the complaint Paragraph "Thirteenth" and the agreements annexed to the complaint. No costs.