Sufrin v. Arbeau, Inc.

24 Misc. 2d 909, 206 N.Y.S.2d 499, 1959 N.Y. Misc. LEXIS 2543
CourtNew York Supreme Court
DecidedNovember 27, 1959
StatusPublished
Cited by6 cases

This text of 24 Misc. 2d 909 (Sufrin v. Arbeau, Inc.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sufrin v. Arbeau, Inc., 24 Misc. 2d 909, 206 N.Y.S.2d 499, 1959 N.Y. Misc. LEXIS 2543 (N.Y. Super. Ct. 1959).

Opinion

Matthew M. Levy, J.

From the obfuscating mass of irrelevancies, statements, repetitions, arguments and conclusions presented in these voluminous papers, I have gleaned the following material facts:

The defendant Arbeau, Inc., the corporate alter ego of the individual defendants, was the owner of certain residential real estate in Manhattan. (The other defendants are not interested in the present motions and are not hereinafter referred to.) It was duly mortgaged to the plaintiff’s assignor. Default ensued. The defendants claim that the value of the property is $200,000. The amount of the mortgage indebtedness, $90,000 in round figures, and nonpayment thereof are conceded. This action was instituted to foreclose. The action proceeded, in normal course, to judgment in the plaintiff’s favor. By that judgment, a Referee was appointed to sell. The time of the sale was fixed for March 13,1959.

Thereafter, by separate requests or motions made by the defendants, to afford them an opportunity to make financial arrangements to redeem the property, the sale was adjourned to March 20, to April 21, to May 13, 1959. The defendants then presented another application to the court, returnable May 13, in which they requested that, at the time of sale, the property be knocked down to them on a bid of the amount due the plaintiff, and that the sale be adjourned for a brief period to enable the defendants to assemble the sum required. The resettled order of Mr. Justice Tilzeb, dated May 26, 1959, and entered on the motion for this relief, fixed the date of sale as June 1, and provided that the defendants may bid for the property in an amount due the plaintiff, with interest, costs and the expenses of the sale, and that, if the defendants or their representative pay to the Referee a deposit of 10% of that sum and execute the “Terms of Sale,” the Referee shall accept such bid and knock the property down to the defendants or their representative. By stipulations, the sale was thereafter further adjourned to June 2, to June 3 and to June 5, 1959. These stipulations, among other things, provided that no further or other adjournment is to be had, requested or applied for, and that if the defendants should bid for the premises, the amount of the bid should not'be less than $101,500, so as to satisfy fully the mortgage debt, interest, costs and expenses of the sale, referred to. in Judge Tilzeb’s order.

The Referee duly conducted the sale at the time and place specified. The defendant Arbeau bid thereon in the amount required, and the auctioneer knocked the property down to it. Arbeau then and there paid the 10% deposit (or it was paid by [911]*911another on Arbeau’s behalf) and Arbeau agreed in writing (subjoined to the document known as the “ Terms of Sale ” signed by the Referee) that it purchased the premises ” for the sum of $101,500 and did “ promise and agree to comply with the terms and conditions of the sale ’ ’. One of these was that [t]he residue of said purchase money will be required to be paid to the said Referee office No. 40 Wall Street, Room 5603, City of New York, on or before July 7th, 1959, at 2:00 o’clock p.m., when and where the said Referee’s deed will be ready for delivery. ”

Immediately upon the bid of the defendant Arbeau, and the execution of the terms of sale by the defendant Arbeau, it executed and delivered the following writing to the Referee, contained on the reverse side of the document known as the “ Terms of Sale ”:

"June 5,1959
For value received, the within bid, and all right, title and interest thereunder are hereby assigned to 33 Gramercy Park South Corp. of 138 E. 27 Street, New York N. Y.
Arbeau Inc.
By Arthur A. Beaudry President ”

The 10% deposit above referred to appears to have been paid by the assignee with the receipt therefor taken in the assignor’s name.

The parties were informed that the Referee was going abroad at the end of June, and he did. It appears that he executed the usual foreclosure Referee’s deed prior to his departure and delivered it to the plaintiff’s attorneys, to be held pending the payment due under the terms of sale. On consent of the plaintiff and the defendants’ assignee of the contract of sale, the closing was postponed to July 16,1959, when title finally closed, full payment was received, and the deed was delivered, with the assignee, 33 Gramercy Park South Corp., as the grantee. At the time of the closing, the grantee, in return for a substantial cash loan to effectuate the purchase from the Referee, mortgaged the premises to Win jay Realty Co. The Referee was not present at the time of the closing. The cash paid by the grantee on the closing was deposited to the Referee’s credit on account in this action. He filed his report of sale on July 31,1959.

While no exceptions, qualifications or conditions are contained in the assignment from Arbeau to Gramercy, it appears that a separate agreement had been entered into between them, in effect giving Arbeau an option to repurchase the bid from Gramercy upon stated terms within a specified period. Arbeau [912]*912did not repurchase the bid, and, as I have said, pursuant to the express language of the assignment thereof, the Referee’s deed was made and delivered to Gramercy, who thus obtained conveyance of the property. However, the defendants continued to occupy and control the premises and have refused to vacate. Instead, they moved by order to show cause to cancel the deed from the Referee to Gramercy, the mortgage from Gramercy to Winjay and the closing and settlement of the Referee’s contract on July 16, 1959, on the ground that what was done during the absence of the Referee from the jurisdiction was void, that the defendants were deprived of the opportunity of applying to the Referee for an adjournment of the closing so as to obtain the necessary financing to consummate the transaction in their own direct behalf, that the assignment and the concomitant arrangements between Arbeau and Gramercy were in effect a mortgage and not a sale of the indefeasible right to the fee, that the financial aid from Winjay had been arranged for by the defendants for their own benefit and unlawfully taken advantage of by Gramercy and that the entire transaction was steeped in overreaching, if not in fraud, participated in by the plaintiff, Gramercy and Winjay and their attorneys.

Accordingly, the defendants ask the court to deny confirmation of the Referee’s report of sale, and that the transfer of title at the closing be voided in its entirety and that the time of closing be further extended, or, in the alternative, that a sale he directed de novo, with all postjudgment proceedings begun anew, including advertising. When this application first came on before the court at Special Term, Gramercy and Winjay appeared specially on the ground that neither was a party to the foreclosure action. The objection to the court’s summary jurisdiction was sustained (Gbeexberg, J.), and the “motion-in-chief ” was restored to the Motion Calendar. That motion is now before me for determination. And, thereafter, Gramercy applied by notice of motion to obtain an order requiring the Sheriff to deliver possession of the property to Gramercy and to remove the defendants therefrom. That application for a writ of assistance is also before me for disposition.

There is no claim of fraud or invalidity in connection with the proceedings in the action or in respect of the judgment of foreclosure.

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Bluebook (online)
24 Misc. 2d 909, 206 N.Y.S.2d 499, 1959 N.Y. Misc. LEXIS 2543, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sufrin-v-arbeau-inc-nysupct-1959.