Barwin Realty Co. v. Union Stove Works

Burr, J.: This 'action is brought for the foreclosure of a mortgage made by one Philip Leizerkowitz to the Barwin Realty Company, on September 18, 1908. The defendant, The Union Stove Works; answered, setting up as an affirmative defense that on October 9,. 1908, it sold to the Philip Realty and Construction Company, at that time owner of the mortgaged premises, certain stoves and ranges, upon the agreement that the title thereto should remain in the Union Stove Works until the purchase price thereof was. fully paid.. The answer further alleges the due-filing of the agreement of sale, as required by section 112 et seq. of the Lien Law then in force (Gen. Laws, chap. 49 [Laws of 1897, chap. 418], as amd. by Laws of 1904, chap. 698), and the omission of the Philip Realty and Construction Company to pay the purchase price of the stoves and ranges, part of which were set up and installed in the mortgaged premiseSi It further alleges that it is the owner of [321] and entitled to the possession of such stoves and ranges, has a lien thereon for the purchase price thereof, and is an improper party defendant. This we deem equivalent to a denial of the allegation in the complaint that the interest or lien, if any, of the Union Stove Works has accrued subsequent to the lien of the said mortgage or is subject or subordinate thereto. In addition, the record contains the following stipulation: “ And it is further stipulated that the following question of law arising in this case be submitted on appeal: Whether the lien arising from plaintiff’s mortgage covers the stoves and ranges installed by defendant, The Union Stove Works, it being agreed that the building on the premises foreclosed herein is a, tenement house, that the stoves and ranges were for the permanent equipment thereof and for heating and cooking in said tenement house, and that the mortgagee was not a party tó said conditional bill of sale or to any agreement with reference to such stoves and ranges, and that the said stoves and ranges, as alleged in said answer and complaint, were attached to the building and were delivered upon a conditional sale agreement between Philip Realty & Construction Company and The Union Stove Works upon the express condition that the title should vest, in The Union Stove Works until fully paid for, and that the said stoves and ranges were delivered to and attached to said building subsequent to the making of the said mortgage, and that a copy of the said conditional agreement was subsequently thereto duly filed at and before the delivery of the said stoves and ranges, and while the Philip Realty & Construction Company who purchased said premises subject to said mortgage and .subsequent to the making of the same, was the owner of said premises.” Prom an order striking out the answer of said defendant as frivolous this appeal is taken. The form of the order is improper. A sham answer may be stricken out (Code Civ. Proc. § 538), but when an answer is frivolous the remedy is to apply to the court for judgment thereon (Code Civ. Proc. § 537). Irrespective, however, of any question of form, in view of the stipulation, we have considered the merits of the appeal and think that the order was improperly granted. It may be true that, if- the mortgagor or his [322] successor in interest had acquired title to the stoves and ranges, as between them and the mortgagee, they might be deemed part of the realty under the circumstances here disclosed. But, between the vendor of such articles and the owner of the realty, they continued to be personal and the property of the vendor. If, subsequently to the installing of. these stoves and ranges, the owner of the property had conveyed the same by a full covenant deed, including a covenant of seizin, and the grantee had been compelled to pay for the fixtures in order to prevent the material men from taking them from the building, an action would lie for breach of such covenant. (Herzog v. Marx, 202 N. Y. 1.) And this upon . the ground that, while these fixtures were real estate so far as the description in the deed was concerned, they were personal property as to the Vendor thereof. If a subsequent conveyance would not have passed title to these stoves and ranges, it necessarily follows that a prior mortgage would not. This case presents a different question from that, which might arise if the mortgage had been made in installments, and an installment had been advanced after the • stoves- and ranges, had been placed upon the mortgaged premises, and without notice of the conditional sale. In such event the owner of the chattels might have no claim as against the -mortgagee. (East New York Refrigerator & Woodworking Co. v. Halpern, 140 App. Div. 201.) The case of Mechanics & Traders' Bank v. Bergen Heights Realty Corporation (137 App. Div. 45) is clearly distinguishable from this case. In that case the title to the personal property passed to the owner of the real property, because, although the sale from the owners thereof to the contractor who was erecting the houses was a conditional sale, no notice of this was given to the owner, so that the conditional vendor’s rights were lost as to him. The title having passed to the owner of the property, inured to the benefit of his mortgagee. The language of the opinion in that case, that “ The lien of a mortgage covers all that was realty when the mortgage was accepted as security, and all accessions to the realty, éxcept when by a valid agreement to which the mortgagee was a party the character of chattels is impressed upon the accessions, ” was [323] correct in connection with the facts in. that case, and was based upon the opinion of the Court of Appeals in McFadden v. Allen (134 N. Y. 489). In the latter .case there was no question of chattels attached -to the realty upon a valid agreement that they should retain their character as personal property. The agreement there was, that the plaintiff in that action, who was the son of the mortgagor, should take possession of the property, have the use of it, and on certain conditions, have a deed thereof. As the court said, he became the equitable owner of the property, and on fulfilling the conditions, could have compelled a conveyance of the legal title by his father, the mortgagor. It was under such circumstances that the court, speaking of .additions to the property, said: “His position was that of a beneficial owner, subject to the mortgage, and all improvements which he made upon the property were subject to the rules of law applicable to mortgagors and mortgagees.” . The order of the County Court of Kings county should be reversed, with ten dollars costs and disbursements, and the motion denied, With ten dollars costs. Jerks, P. J., and Woodward, J., concurred; Hirschberg and Rich, JJ., dissented. Order of the County Court of Kings county reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.