Belmont v. Elias Ponvert

63 N.Y. 547, 1876 N.Y. LEXIS 8

• Court: New York Court of Appeals
• Decided: January 18, 1876
• Status: Published

Opinion

Rapallo, J.

By this action the plaintiff seeks, among other things, to compel the defendant Ponvert to apply the rents collected by him to the payment of the liens mentioned jn the agreement between the plaintiff and Ponvert and Shelton, dated December 13, 1819. This relief was refused by the court below, on the ground that these rents did not fall within the terms “ future proceeds ” of the real estate mentioned in the agreement, and that those terms covered only the proceeds of a final distribution by sale of the property in question'.

It is to be observed that the agreement is not, in terms, restricted to the proceeds of a sale. The words are, “ future proceeds of said property.” In speaking of chattels the term “ proceeds ” would, in general, be understood as referring to the proceeds of a sale, for, ordinarily, no other proceeds are derived from property of that description; and in" speaking of the proceeds of lands the term proceeds may be used in such a connection as clearly to indicate that the proceeds of a sale only are intended. But it would, in our judgment, be going too far to say that the term “future proceeds,” when applied to lands, has such an exact and inflexible meaning that it necessarily excludes rents and profits. Where parties contract in reference to interests in lands, an immediate sale of which is not contemplated, and they agree upon the disposition to be made of the future proceeds of the land, 'without making specific mention of rents and profits, we 'think the words future proceeds are sufficiently comprehensive to include rents and profits, unless, from the context or otherwise, the intention of the parties appears to have been different.

In the present case there could be no final disposition of the land by sale until the question of Tylee’s title was determined, and that was to be the subject of a serious litigation. The parties to the agreement had no title to the land, but simply liens upon it, and these depended wholly upon the title of Tylee. If they failed in the Dempsey litigation to establish the title of Tylee, all their supposed liens were valueless. They, therefore, combined together to sustain Tylee’s title at their joint expense. No provision was made in the agreement for any sale of the property; the time and manner of sale were uncertain. It was, probably, contemplated that, in case they succeeded in - establishing the title of Tylee, a sale would ultimately be made by virtue of some of these liens, or of a title perfected under some of them, and the parties agreed that neither of these liens should be used by either of the parties to the prejudice of the other, nor otherwise than for the purpose of perfecting the title to the said premises for the purpose of carrying out the agreement and cutting off other liens and incumbrances.

The general intent of the agreement appeai-s to have been that all the parties thereto should contribute to the defence of the title of Tylee, upon which the rights of all of the parties depended. . That if this title were sustained, whatever might be realized from Tylee’s interest in the property should be applied, in the first place, to the payment of the liens described in the agreement, and that if any surplus should remain after the satisfaction of these liens, such surplus should go to Ghastelain and Ponvert and Shelton. That the liens held by the parties to the agreement should be used for their common benefit for the purpose of perfecting the title and carrying out the objects of the agreement, and that neither of the parties should use his liens to the prejudice of any of the other parties.

The title was finally perfected under the sale upon execution on the Brouwer and Neilson judgment, and became vested in the defendant Ponvert. Upon the successful termination of the Dempsey suit, Ponvert, by virtue of the title thus acquired, obtained the payment to himself of the rents now in controversy.

These rents were the fruits of the litigation with Jane Dempsey as clearly as would be the proceeds of a sale of the land. It is not disputed that the title which Ponvert obtained to the land was held by him for the benefit of the parties to the agreement, at whose expense the litigation had been car ried on ; and it is difficult to see any ground upon which, these rents, obtained as an incident to that title, should take-any different course from the proceeds of sale. Upon a careful examination of the agreement, we find nothing in it, or in the facts of the case, showing that such a result was contemplated or intended. On the contrary, not only was Tylee’s title established at the joint expense of the parties,, but it was by means of that provision of the agreement by which the plaintiff, impliedly, bound himself to forbear the exercise of his right to redeem from the sale under the Brouwer and Ueilson execution, that Pon vert was enabled to obtain the title under which he collected these rents. But for this provision, the plaintiff might have placed himself in the same position which Ponvort obtained. The time.to redeem was to expire on the 15th of December, 1849; on. the thirteenth the agreement was made under which the-plaintiff forbore to exercise his right of redemption, thus - enabling Pon vert to obtain title under the sheriff’s deed-. And this the plaintiff did on the strength of the stipulation. that such forbearance should not prejudice his right to the payment of his judgments out of the future proceeds of the property, and that neither of the liens (including the certificate of sale under the Brouwer and Ueilson judgment) should be used by either of the parties to the prejudice of the other, nor otherwise than for the purpose of perfecting the title to the premises for the purpose of carrying out the. agreement. In the face of this stipulation, it cannot be successfully contended that Ponvert had the right to use the Brouwer and Ueilson judgment, and the sale thereunder, for the purpose of securing to himself all the rents and profits of the property which have accrued since the making of the agreement of December 13, 1849. The rents of the property during that long period might exceed the sum which the fee would produce on a. sale. The interest on the liens has been accumulating during the same period, and these rents may be required for the purpose of satisfying them. It would be a very strange construction of the agreement to hold that, under it, either of the parties whose lien happened to be used for the purpose of perfecting the title, acquired the right, from that circumstance, to appropriate to his own use all the rents and profits which should accrue until a sale could be compelled.

In the petition presented by Ponvert to the court for the payment to him of the rents in the hands of the receiver which he had recovered since December 31, 1849, he set forth, as appears from the twenty-seventh finding, the title derived by him under the sheriff’s sale, and declared that he had obtained such legal title on behalf of himself and other judgment creditors entitled to redeem from such sheriff’s sale. It seems a necessary consequence that, for the rents which he collected by virtue of such title, he should be accountable to the parties for whose benefit he obtained and held the title.

We think that the defendant Ponvert is clearly accountable for the rents collected by him from the receiver, and also for the subsequent rents up to the time when a sale shall be had, or so much of them as may be required, in addition to the proceeds of sale, for the purpose of satisfying the liens mentioned in the agreement of December 13, 1849, and that the judgment should be modified accordingly.

We concur in the conclusions of the court below that the payment by the plaintiff of his proportion of the expenses of the Dempsey litigation was not a condition precedent to the vesting of his right to the benefits secured to him by the agreement of December 13, 1849. It would have been entirely proper to have had all controversies respecting those expenses settled in this action had the defendant so elected. Exit, for the reasons assigned by the court beloxv, we think it properly declined to dispose of the subject of those expenses in this action.

The jxxdgment, as modified in respect to the rents, should be affirmed.

All concur.

Judgment accordingly.