Rupersam Realty Corp. v. Larpeg Realty Corp.

Davis, J. The plaintiff’s assignor purchased of defendant village of Mamaroneck a tax lien on certain property therein, and the hen was transferred to it under the provisions of section 133 of the Village Law (added by Laws of 1934, chap. 17). It was stated in the transfer that the owner “ is entitled to all the privileges and benefits of Said act.” No other statute wsis referred to. So on its face this tax hen was subject only to all taxes and assessments still unpaid and to all taxes and assessments which may have become a hen subsequent to the hen of the taxes or assessments for which the tax hen was sold. The action is to foreclose the lien so transferred. It appears that at the time there were water rates or “ water rents ” on the particular premises which were unpaid. The plaintiff alleged in its second amended complaint that these water rents were subordinate to its hen, and sought to cut them off by foreclosure. The answers of defendants village and joint water works in effect alleged that these water rents constituted a hen equal or superior to the hen of the plaintiff. The plaintiff made motions for summary judgment. The motions were denied and the second amended complaint dismissed as to these defendants. From the order and judgment entered thereon plaintiff appeals. The provisions of section 133 of the Village Law provide, in brief, that the “ right and lien so sold shall be called 1 tax lien,’ ” and that “such tax hen so sold shall be subject to all taxes and assessments.” The question is whether the charges for water consumed by an occupant of the premises constitute a tax and assessment. Ordinarily when water rents are incurred by a consumer such rents are not classified as taxes or assessments. (Silkman v. Water Commissioners, 152 N. Y. 327; New York University v. American Book Co., 197 id. 294; Loring v. Commissioner of Public Works, 264 Mass. 460, 465; 163 N. E. 82; Hamilton on Special Assessments, § 261; 3 Dillon on Mun. Corp. [5th ed.] § 1323.) Methods not available for the collection of other taxes are usually provided for the collection of water rates. Such rates may become, by statute, a hen on the property and remedies provided for its enforcement, but when the plaintiff took this transfer no statute fixed the hen as a tax hen equal or superior to that of the hen for unpaid general [697] tax. When such a lien is created it exists only by virtue of the statute (Sayer v. City of New York, 208 N. Y. 159,163); and where its nature is undefined or limited by the, statute it will not be extended by judicial construction. (67 C. J. p. 1273, and cases cited.) It may be noted that by chapter 885 of the Laws of 1937, an amendment was made to subdivision 6 of section 20 of chapter 654 of the Laws of 1927 (added by Laws of 1928, chap. 426) to make it more definite that these rates were a hen on real property and were to be known as water rents and declared to be “ prior and superior to every other lien or claim except the lien of an existing tax.” Of course, that statute is inapplicable to the present case, for the claims of the plaintiff: became vested before the statute was enacted. It does illustrate the fact that it was found necessary to make the statute somewhat more definite and specific in its application to these water rents, but it still left the liens of such water rents subordinate to the “ Hen of an existing tax.” It is argued by respondents that in the 1927 statute (Chap. 654) the powers of corporations like these defendants were further defined by reference to section 229 of the ViUage Law. That section provided, as to water rents, in part: “ Such rents shah be a Hen on the real property upon which the water is used, and such Hen is prior and superior to every other Hen or claim, except the Hen of an existing tax;” and provided remedies for the enforcement of the Hen. Obviously the plaintiff’s claim is a Hen for an existing and unpaid tax, and it is not apparent how the defendants can claim any equaHty or superiority of the water rents Hen over that of plaintiff. The defendants have followed no remedy prescribed by statute for the enforcement of the Hen for water rents, and their practice in transferring tax Hens like the one to plaintiff’s assignor, referring only to the provisions of section 133 of the Village Law, indicates that they never construed these other statutes as limiting the tax Hen so .transferred. Further, said defendants have not set up in their answers, or otherwise, any facts indicating that by their acts or by force of law the water rents have become such Hens on the property that they are entitled to any superiority. Even though some of the water rents may have antedated the tax Hen, there is no evidence that any procedure was followed to establish them as prior existing claims on the property. Ordinarily the general tax levied for 1he purpose of maintaining the functions of government will naturally have superiority over any other Hens. On a sale, if protective bids are made so that a surplus arises, all junior Hens of every nature, including these which are apparently of that class, and the Hens of [698] mortgages, judgments, and the like, may be paid out of such surplus. The order and judgment should be reversed on the law, with ten dollars costs and disbursements, and the plaintiff’s motions for summary judgment granted. If the respondents are advised that they can set up additional facts, leave should be given to serve amended answers within ten days after the entry of the order. Lazansky, P. J., and Hagarty, J., concur; Johnston and Taylor, JJ., dissent and vote to affirm, being of the opinion that the lien for water rents is prior and superior to plaintiff’s lien. Order and judgment reversed on the law, with ten dollars costs and disbursements, and plaintiff’s motions for summary judgment granted, with leave to respondents to serve amended answers within ten days from the entry of the order hereon, if so advised.