Kassin v. M. L. Building Corporation

*378 Pound, J. The plaintiff foreclosed a mortgage covering thirty-four lots, situate on Crown street in the borough of Brooklyn, city of New York. The appellant, Morris Schwartz, was the owner and holder of a mortgage, second and subordinate to that held by the plaintiff, upon thirty-three of the lots covered by the plaintiff’s mortgage. The respondent, Fanny Brandfon, was the owner of the thirty-fourth lot, the lot not covered by the mortgage held by Schwartz. A judgment of foreclosure and sale was entered which directed the sale of the premises described in the complaint, or so much thereof as may be sufficient to discharge the mortgage debt, the expenses of sale, etc., and the premises were sold one lot at a time. Thirty-three of the lots having been sold, Brandfon’s attorney, who was present at the sale, discovered that the amount for which they had been sold was sufficient to pay the mortgage debt, the expenses of the sale, etc., as required by the judgment of foreclosure and sale. He protested orally and in writing to the referee against the sale of the respondent’s lot. The referee, not being certain that the amount realized was sufficient to cover all the items which he would be required to pay, sold it. The respondent *379 through her attorney thereupon purchased it for the sum of $10,650. Subsequently the referee ascertained, and it is undisputed, that the amount realized from the sale, before the lot of the respondent was sold, was sufficient to pay the mortgage debt, the expenses of the sale, and all the other items required to be paid by him under the judgment herein. On closing title to the lot owned and purchased by Mrs. Brandfon, her attorney protested against paying the balance of the purchase price and taking a deed, but the plaintiff’s attorney insisted upon the terms of the safe being carried out. Thereupon, under protest, the balance was paid, the deed accepted and recorded. The report of sale has not yet been filed. The respondent then moved for an order directing the referee to repay to her the amount paid by her, $10,650, less $429.56 paid by the referee for taxes, arrears of taxes, assessments, water rates, accrued interest, penalties thereon and for stamps on the deed affecting her lot. This motion was denied at Special Term. The Appellate Division reversed and granted the motion. The only question before this court is whether the Brandfon lot should have been sold by the referee. This motion may be regarded as analogous to a motion to be relieved from a bid and purchase under a judicial sale and, therefore, a final order. (Merges v. Ringler, 158 N. Y. 701.) Although the Brandfon lot was not subject to the Schwartz mortgage it was conveyed subject to the blanket mortgage. It is not questioned that the deed provided that the sum of $7,500 thereof affected it. This amount was a part of the purchase price which it should pay. It was, therefore, as between the plaintiff in the foreclosure action and Brandfon, primarily charged with the payment of the blanket mortgage at least to that extent. If she succeeds in getting back the consideration paid at the referee’s sale, she will have her property without paying $7,500, part of the purchase price, which *380 would, be inequitable. (Wood v. Harper, 9 App. Div. 229.) Whether she should pay more will depend on facts later to be established. The giving of a mortgage is an' alienation pro tanto, i. e., to the amount of the mortgage. (Zabriskie v. Salter, 80 N. Y. 555, 558.) The Schwartz mortgage is to that extent only an alienation of the lots covered thereby prior to the Brandfon deed. (Kellogg v. Rand, 11 Paige, 59, 64.) The equitable doctrine, which is invoked by Brandfon, that when premises subject to a mortgage are conveyed in parts at different times the parcels are to be primarily charged with the payment of the mortgage debt in the inverse order of alienation, is subject to qualifications when the equities require it. The question remains as to the proper disposition of thé surplus remaining after paying her share of the mortgage debt and expenses of the sale. The Schwartz mortgage covered other lands than the premises involved, in the foreclosure. Their value does not appear. The equities of Brandfon are thus presumptively enhanced to some extent but that fact is not material on this motion. There is no presumption that such equities are enhanced to the full amount of the purchase price of the Brandfon lot. The only question here is whether or not the sale of the Brandfon lot should be set aside as contrary to the judgment of foreclosure. The equities of the parties may be settled on surplus moneys proceedings where the fund may be marshalled according to the equities which do not fully appear in this proceeding, but respondent may not be relieved from the sale of her lot. The order of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division. Hiscock, Ch. J., Cardozo, McLaughlin, Crane, Andrews and Lehman, JJ., concur. Ordered accordingly.