Opinion
January 7, 1916.
Joel J. Squier [ George E. Draper and Lamar Hardy with him on the brief], for the appellants.
Horace W. Palmer [ Charles A. Taussig and Benjamin B. Avery with him on the brief], for the respondents.
In a proceeding to acquire title to land for a street an award to unknown owners was made. Later assessments for benefits were made for a larger amount. The comptroller paid the award with interest to the chamberlain. Later the court confirmed a report of a referee that a part of the award was due the Schoonmakers, the petitioners, to discharge a deficiency judgment entered upon the foreclosure of a mortgage on the land taken and not taken, and that the remainder of the award should be paid the Edgar Improvement Company, a second mortgagee. Later, the chamberlain prepared warrants for the several sums, but refused to deliver them by reason of the unpaid assessment. Then the Schoonmakers and Edgar Improvement Company severally indorsed the warrants to the collector of assessments, and the petitioners offered to pay a balance due. But thereupon a difference arose as to the amount of the balance. The respondents contend that the whole award may be set off against the assessment as of the date when the assessment became due and payable and hence interest-bearing. The city, as I understand, insists that no part of the award may be offset save as of the date when it was tendered. The Greater New York charter, section 1007, provides: "Whenever an estimate and assessment for loss and damage, and for benefit and advantage shall be made by the commissioners of estimate and assessment relative to the same person or persons, no interest shall be demanded from such person or persons upon the amount assessed for the benefit and advantage, except on the excess of the amount he is to pay over and above the amount he is to receive for or in consequence of any intervening time between the period fixed for the receipt of the amount of benefit and advantage and the payments of the amount of loss and damage." (Laws of 1901, chap. 466, § 1007.) The appellants contend that the right to set off awards against assessments under section 1007 of the charter ceases upon the payment of the awards into court, pursuant to section 1002 of the charter. That contention is not consistent with the refusal of the chamberlain to pay the award until the assessment shall be satisfied. It is true that section 1002 of the charter provides that payment to the chamberlain "shall be as valid and effectual, in all respects, as if made to the said owners, proprietors, parties, and persons, respectively, themselves, according to their just rights, as if they had been known and had all been present, of full age, and compos mentis." That may be so for some purposes, and under some conditions, but not absolutely so where there is an assessment for the payment of which the award is bound. In such case the chamberlain may detain the awards with the full power which he exercised in the present instance until the payment of the assessment. I am not informed in what way, if any, the city can compel the application of the award to the payment of the assessment, and unless the person liable to pay the assessment, in the present instance the Schoonmakers, own all the award, I do not perceive how they can apply it all to the payment of the assessment. I will later advert to that. The owner of the award may, or may not, use it to pay the assessment. But may he wait as he pleases without exercising his choice to use the award or his interest therein towards the payment of the assessment, and then insist that it became offset as of the time when the assessment became due? There is an evident unfairness in giving such scope to the owner of the award. But the statute is broad enough to permit it, and if injustice result, the correction should be made by the Legislature. If, however, the statute permits the owner of the award to choose his time for using the award to pay the assessment, and he finally decides to apply it as of the time the assessment became due, it should be applied with such interest as it had earned to that date. It is an impossible conception that the statute intended that the award, itself become an offset at a given date, should for the purpose of drawing interest be deemed existent. But the principal question presented here is whether the interest of the Edgar Improvement Company in the award can be used. That depends upon the inquiry whether the award and assessment are "relative to the same person or persons." When the award was made there were three persons related to it, the owner of the equity of redemption, and, so far as shown, the two mortgagees, Schoonmakers and Edgar Improvement Company. The assessment entered August 13, 1913, related to the land and whoever owned it. But the Schoonmakers at that date owned the land, for they bought on the foreclosure sale on July 9, 1913. Their deficiency judgment was entered on March 6, 1914. An assessment entered on August thirteenth could relate only to the purchaser, the Schoonmakers. Hence, the award was related to the owner and two mortgagees when it was made, and the assessment was related alone to the purchaser, the new owners of the fee, inasmuch as it did not exist when the award was made. Therefore, the Edgar Improvement Company was never related to the award and the assessment. But the Schoonmakers were related to the award and also to the assessment laid on the land after they bought it; they were entitled to a deficiency judgment payable out of the award, and I do not regard it as important that the judgment was not entered until after the assessment was entered. They may insist that their interest in the award be set off against the assessment as of the due date of the assessment, but I perceive no reason for permitting them to use the Edgar Improvement Company's interest in the award for a similar credit to pay an assessment to which that company was a stranger. Of course, the Schoonmakers could apply the Edgar Company's interest in the award with its consent, but the real test is, could they do it at any time as of the date when the assessment was laid. They could not (1) because they did not own it; (2) because the Edgar Company were not related to the award and assessment at any time. Indeed, it may be added that the Edgar Company never had any advantage in paying their own money to discharge the assessment, and it would have been a mere sacrifice of their interest in the award to do so. In Matter of Schott ( 159 App. Div. 824) the mortgagees purchased upon foreclosure and the assessment was later entered, for which it was said the purchasers were alone liable. They were allowed to offset the award to the extent of the deficiency judgment. I find no principle or authority that prevents the purchasers, Schoonmakers, offsetting their interest in the award as of the due date of the assessment, or permitting them to tack to their own share of the award that of the Edgar Improvement Company, total strangers to the assessment, for the obvious purpose of reducing the excess assessment on which interest must be paid.
The order should be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.
JENKS, P.J., CARR, MILLS and RICH, JJ., concurred.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.