Clarkson v. Skidmore

2 Lans. 238

• Court: New York Supreme Court
• Decided: November 15, 1869
• Status: Published

Opinion

Sutherland, J.

It cannot be said, I think, that the Eevised Statutes changed or abolished the common law meaning of the term real estate, when used as expressing, or with reference to, the nature and quality of the estate in land, as distinguished from estates in land for years, that is chattels real. (See 1 Revised Statutes, 722, §§ 1 to 6, both inclusive; 1 id., 750, § 10 ; 1 id., 754, 755, § 27.) Section 36 of chapter 3, of part 2d, relating to the proof and recording of conveyances of real estate, declares that the term real estate shall be construed “ as embracing all chattels real, except leases, for a term not exceeding three years,” as used in that chapter. That chapter (chap. 3) does not relate at all, to the nature, quantity, or divisions of estates in land, except with reference to the proofs and recording of conveyances of estates in lands. Therefore, in speaking of the nature and quantity of the estate or interest, which Phillips, the lessee, had in the demised premises at the time of the foreclosure and sale, it may not be technically proper or accurate to call Ms estate or interest real estate. But what of it?

By the common law, and by the Revised Statutes, he had an estate (though not real), in the land for the unexpired term of years, called at common law, and by the Revised Statutes, a chattel ■ real. Equity regards the substance of things, not names, and I cannot see, of what-possible materiality it is in .this ease, whether this estate is called or should he called real estate or a chattel real.. It was an estate in the lands. It entitled him, as between himself and his lessor, to its use and occupation, rents and "profits, during the unexpired term, upon or under the terms of the lease. It was destroyed or diverted by the foreclosure sale and conveyance, under a mortgage made by the lessor, before its creation. The conveyance to the purchaser, carried the fee absolute including the estate of the lessee. The moneys bid and paid for the premises, were bid and paid for a fee absolute, all the estate which could he had or held in the premises, including the unexpired term or estate for years of the lessee. I .cannot see, why so much of the surplus moneys, as was paid 'for the lessee’s estate, or as arose from the sale of it, should not be regarded in equity as representing, or as taking the place of his estate, and go to. indemnify his mortgagees of the term, and him.

The holder of a judgment in a court of record against- tho lessee, would have had a claim on such part or portion of tho surplus moneys, for such judgment would have been a lien on the lessee’s term or estate. (2 Rev. Stat., 359, § 3.) The mortgagees of the lessee have a claim on such part or portion of the surplus moneys, for their mortgages gave them liens on' the lessee’s term or estate. It would be strange, indeed, if the lessee’s mortgagees have a claim on such part or portion of the surplus, because their mortgages gave them liens, on the lessee’s unexpired term and estate, that the lessee, the owner of the unexpired term and estate itself, subject to the mortgages, should' not be entitled in equity as between him and the executor.of the lessor to what might be left of that part or portion of the surplus after paying his mortgagees of the term, considering the fall and express covenant of the lessor for quiet enjoyment, and especially considering that an action at law on this covenant would give the lessee a very inadequate indemnity for the loss of his unexpired term indirectly by the very act of the lessor.

But the lessee and Remsen, his principal mortgagee of the term, were parties to the foreclosure action, and I think are bound "by the price for which the premises were bid off and conveyed. Therefore, in ascertaining what part or amount of the surplus moneys should be regarded as having been bid and paid for the unexpired term of the lease, I think §119,750 the amount which the premises brought at the mortgage sale should be taken as the value of the premises, or of a fee absolute in them, including the un expired term of the lease. I cannot doubt that upon such assumption the value of, or how much of the surplus should be regarded as having been paid for the lessee’s unexpired term, subject to the annual rent, liability to pay taxes, &c., I may say, subject to the terms of the lease, can be ascertained with reasonable accuracy. The opinions of witnesses as to the value of the lessee’s unexpired term should not he resorted to, if such value can be ascertained by calculation on the assumption above stated with reasonable certainty.

In my opinion, after taking from the $85,046.91, the amount of the surplus paid into court, the costs and expenses of this proceeding as to such surplus, including the costs of all parties to this appeal oil this appeal and such reasonable and proper allowances for counsel, as the court shall have the power and feel authorized to make, and the ascertained value of the widow’s right of dower, and the-ascertained value of the lessee’s unexpired term, less the $750 rent m arrear, if anything should be left, the executor of the lessor would he entitled to it, but that the executor has no claim or lien on such surplus beyond such contingent residue.

As to the sum or amount to be ascertained as the value of the lessee’s unexpired term at the time of the mortgage sale, it less the $750 rent in arrear, should he,appropriated, first to the payment of the Reinsen mortgage in full; next to the payment of the mortgage held by Iioyt, assignee, in full, and whatever may be left of it, after paying these two mortgages, should he paid to Phillips, the lessee.

I do not think our decision of this case should be controlled by Burr v. Stenton (52 Barb., 389), considering the reasons given in the opinion in that case at General Term, for reversing the Special Term, and considering the special circumstances of that case.

The order appealed from should he reversed and the exceptions to the referee’s report allowed with' costs of all parties to this appeal, on the appeal, to be paid out of the surplus moneys, and the matter should be referred back to the referee, to proceed and report according to the views expressed in this opinion, and the order appealed from should be so reversed and matter referred back, without prejudice to counsel’s right to make such application to the court for allowances as they may be advised to make.

Ordered accordingly.