Opinion
January 27, 1955.
Application was made for an order pursuant to section of the Civil Practice Act dealing with when and how court may compel delivery of possession of realty to purchaser. The Special Term, Christ, J., held that where, as between husband and wife as co-owners of realty, obligation to make payments required by mortgage was that of husband who had received proceeds of loan, and, though wife had privilege of curing husband's defaults, she was under no obligation to do so, and mortgage was foreclosed, and wife's brother purchased realty at foreclosure sale, and attorney for wife's brother exhibited referee's deed to husband and demanded possession of realty, and husband agreed to surrender possession at any time on a few days' notice without intervention of sheriff, and husband sat idly by for over six months without taking affirmative steps to right alleged wrong done to him as result of allegedly fraudulent conspiracy, grantees of wife's brother were entitled to have husband ejected from the realty.
Application granted.
Abraham W. Sereysky, New York City, for plaintiff.
Allinson Gerzof, Freeport, for defendants.
This is an application for an order pursuant to Section 985 of the Civil Practice Act requiring the Sheriff of Nassau County to eject every person holding the premises or any part thereof which were the subject matter of this foreclosure action adversely to the grantees of the purchaser thereof at the foreclosure sale, and to put such grantees into possession of the premises.
Gertrude Levene and Louis L. Levene are husband and wife. In 1950 the Levenes were engaged in a controversy over financial and property matters. At that time the wife was the record owner of certain real property on Babylon Turnpike opposite Grand Avenue at Freeport, New York in which premises the husband was then living. The wife was also the record owner of property located at 97 Lexington Avenue, Freeport, New York in which she was then living. The husband had made several claims to the ownership of both of these properties. In addition, the wife had inherited from her father a mortgage covering the Babylon Turnpike property occupied by the husband and she had also, for the accommodation of the husband, executed and delivered as co-maker and/or endorser, certain promissory notes held by two banks. The husband needed approximately $11,000 for use in his business and it was proposed to raise this money by means of a mortgage on the Babylon Turnpike property, title to which of record, as noted above, stood in the name of the wife alone.
On August 29, 1950 Mr. and Mrs. Levene entered into a written agreement for the purpose of compromising, adjusting and settling their financial controversies in the manner set forth in such agreement. Among other things, the parties to that agreement acknowledged that each of them had a half interest in the Babylon Turnpike property and that the wife was the sole owner of the other parcel at 97 Lexington Avenue. It was further agreed, with reference to the Babylon Turnpike property, that while the husband resided in the house and conducted his business from there he was to be entitled to all the rents, income and profits of the property and be free of any obligation to pay rent for the use and occupation thereof but would be obligated to pay all of the carrying charges, expenses and upkeep, repairs and maintenance of such premises. He was also given the right while so occupying the property to rent, on a monthly basis, such portions thereof as he deemed fit. The wife, for her part, agreed to execute to a financial institution, within thirty days from the date of the agreement, a bond in the principal sum of $11,200 to be secured by a first mortgage payable in twelve years at an interest rate of 5% per annum, which mortgage was to be a monthly principal amortizing mortgage, containing full prepayment rights at any time during the term of such mortgage. In connection with such mortgage it was agreed that the husband "shall pay all charges, expenses and claims of every kind in connection with said mortgage and also to make all payments provided for under said bond and mortgage, and in the event the husband shall fail to make such payments, the wife is hereby given the right to make such payments, and any such payments made by the wife shall be a charge against the husband's share of said property, with interest on such charges from the time of payment thereof by said wife at the rate of 5% per annum." The agreement further prescribed that the husband should pay the $11,200 mortgage as the payment thereunder became due and would have the right to prepay pursuant to the terms of the mortgage and the mortgage and its unpaid balance and any interest thereon was to be a charge against the husband's share of said property.
Subsequently, the bond and mortgage was executed and the proceeds of the loan obtained. However, there came a time when Mr. Levene failed to make the payments due under the bond and mortgage made by Mrs. Levene and in or about August 1952 the plaintiff in this action commenced foreclosure of the mortgage. Both Mr. and Mrs. Levene were served in that action and both of them defaulted in the action. Apparently, no attempt was made by Mrs. Levene to remedy the defaults of her husband who was the person primarily obligated for the mortgage indebtedness. The foreclosure action proceeded to judgment of foreclosure and sale on November 25, 1953. The referee's sale was held on March 1, 1954. At this public auction the husband appeared and bid on the property. However, he was outbid by one Ely Rosenthal, brother of Mrs. Levene, and Rosenthal's bid of $17,500 was accepted by the referee as the highest bid made. Thereafter, on April 14, 1954 the referee delivered a deed of the property to Mr. Rosenthal which deed was duly recorded on the same day.
At the time of the foreclosure sale, Mr. Levene was still in possession of the premises. On April 23, 1954 the attorney for Mr. Rosenthal visited the Babylon Turnpike premises, exhibited the referee's deed to Mr. Levene and demanded of him possession of the premises. It is claimed by the attorney who exhibited the deed, and nowhere denied by Mr. Levene, that the latter told the attorney that it would not be necessary to embarrass him by having the sheriff evict him and that he would deliver possession at any time on a few days notice. Mr. Levene continued in possession of the premises and is still there and has paid no rent or other money for use and occupancy of the premises.
In or about November 1954, with the knowledge of Mr. Levene, Mr. Rosenthal contracted to sell the premises to Robert E. Baumann and Roslyn G. Baumann. Under date of November 15, 1954 Mr. Levene sent a registered letter to Mr. Baumann which read as follows:
"This is to confirm my conversation with you the other day in which I pointed out that I am a fifty percent (50%) owner in the property you are purchasing on the north east side of Babylon Turnpike opposite Grand Avenue in the Town of Hempstead.
"Therefore, I wish to advise you that I want to participate in any transfer and closing of title that takes place."
On December 16, 1954 Mr. Rosenthal closed title on his sale to Mr. and Mrs. Baumann and delivered a deed conveying title to the subject premises. However, a few hours earlier on that day, Mr. Levene caused to be filed in the Office of the Clerk of the County of Nassau a notice of pendency of action accompanied by a complaint verified by him on December 15, 1954. The action in which this notice of pendency was filed is one in which Mr. Levene is plaintiff and his wife and Mr. Rosenthal are defendants. The gravamen of the complaint is a claim that Mrs. Levene and her brother Ely Rosenthal conspired to divest Mr. Levene of his rights in the Babylon Turnpike property and to acquire title to the same for the benefit of Mrs. Levene and that the purchase of the property on the foreclosure sale by Ely Rosenthal was in furtherance of that conspiracy and part of a scheme and device devised by Mrs. Levene and her brother to deprive the plaintiff of his undivided half interest in the premises. The complaint seeks a judgment impressing a constructive trust upon the property for the benefit of the plaintiff and his wife and requiring Ely Rosenthal to execute and deliver a conveyance of the premises in favor of Mr. and Mrs. Levene. The notice of pendency of action and the verified complaint were filed before the commencement of the action and so far as appears from the papers before the court there has been no service of process upon either Mrs. Levene or Mr. Rosenthal.
The granting of a writ of assistance lies in the discretion of the court and consideration must be given to the relative equities of the particular situation. There are certain matters which are clear beyond any doubt in the situation here presented. This is not a case in which a co-owner has deliberately defaulted upon a mortgage in order to create a situation which would lead to the wiping out of the other co-owner's interest in the property. Here, as between the co-owners, the obligation to make the payments required by the mortgage was undeniably that of Mr. Levene. While it is true that Mrs. Levene under the terms of the agreement with her husband had the privilege, if she chose to exercise it, of curing her husband's defaults, she was under no obligation to do so. Thus, the events which brought on the foreclosure of the mortgage were those arising by reason of Mr. Levene's default.
In considering the equities of this situation significance must be attached to Mr. Levene's conduct since April, 1954 when the referee's deed was first exhibited to him and a demand for possession made. There is no denial on his part that the deed was exhibited to him; that the demand for possession was made; or that he stated that he would surrender possession at any time on a few days notice without the intervention of the sheriff. It seems improbable that one who charges that the title acquired by the foreclosure purchaser was the culmination of a fraudulent conspiracy to deprive him of an undivided one-half interest in the mortgaged premises would sit idly by for over six months without taking affirmative steps to right the wrong done to him. Yet the fact is that at no time between April 1954 and November 1954 did Mr. Levene make any move to upset the foreclosure sale which he alleges is tainted by reason of a fraudulent conspiracy between his wife and her brother. Under the circumstances which are disclosed on this application the court is of the opinion that discretion should be exercised in favor of the grantees of the purchaser at the foreclosure sale and the application is accordingly granted.
Submit order.