| Surace v Stewart |
| 2009 NY Slip Op 00370 [58 AD3d 715] |
| January 20, 2009 |
| Appellate Division, Second Department |
| Steve Surace, Sr., et al., Respondents, v Andrew Stewart etal., Defendants, and John Doe, Doing Business as Columbia Capital Co.,Appellant. |
—[*1] Farrell Fritz, P.C., Uniondale, N.Y. (Bruce N. Roberts of counsel), for respondents.
In an action, inter alia, for a judgment declaring that the plaintiffs have an equitable firstmortgage lien against certain real property in the principal sum of $265,377.65, the defendantJohn Doe, doing business as Columbia Capital Co., appeals (1) from so much of an order of theSupreme Court, Kings County (Kramer, J.), dated July 11, 2007, as denied those branches of hismotion which were for summary judgment with respect to the second cause of action and forsummary judgment on his counterclaim for a judgment declaring that the mortgage he issued tothe defendant Andrew Stewart was a valid first mortgage lien against the subject real property,and granted the plaintiffs' cross motion for summary judgment on the second cause of action, and(2) from a judgment of the same court dated October 17, 2007, which, upon the order, in effect,declared that the plaintiffs have an equitable first mortgage lien against the subject real propertyin the principal sum of $265,377.65, together with interest thereon from April 5, 2005, at the rateof 12% annum.
Ordered that the appeal from the order is dismissed; and it is further,
Ordered that the judgment is affirmed; and it is further,
Ordered that one bill of costs is awarded to the plaintiffs.[*2]
The appeal from the intermediate order must bedismissed because the right of direct appeal therefrom terminated with the entry of judgment inthe action (see Matter of Aho, 39 NY2d 241, 248 [1976]). The issues raised on theappeal from the order are brought up for review and have been considered on the appeal from thejudgment (see CPLR 5501 [a] [1]).
On April 5, 2005 the plaintiffs took a mortgage in the sum of $360,000 (hereinafter theplaintiffs' mortgage) from the defendant Andrew Stewart, which was secured by the subject realproperty. The plaintiffs' mortgage was not recorded until January 30, 2006. On April 5, 2005 aportion of the proceeds of the plaintiffs' mortgage loan in the sum of $265,377.65 was used tosatisfy a prior mortgage secured by the subject property (hereinafter the prior mortgage). On July14, 2005 the appellant, Rudolph Kats, sued herein as John Doe, doing business as ColumbiaCapital Co., took a mortgage from the defendant Andrew Stewart in the sum of $200,000(hereinafter the appellant's mortgage). That mortgage was recorded on August 1, 2005. Stewartdefaulted on both the plaintiffs' mortgage and the appellant's mortgage. In this action, amongother things, the parties, in effect, sought a determination as to which of those two mortgages haspriority. The Supreme Court granted the plaintiffs' cross motion for summary judgment on thesecond cause of action for a judgment declaring that they have an equitable first mortgage lienagainst the subject real property in the principal sum of $265,377.65. The court determined that,based on the satisfaction of the prior mortgage with part of the proceeds of the plaintiffs'mortgage, the plaintiffs' mortgage should be equitably subrogated to the rights of the priormortgagee in the sum of $265,377.65. The Supreme Court denied those branches of theappellant's motion which were for summary judgment with respect to the second cause of actionand for summary judgment on his counterclaim for a judgment declaring that his mortgage was avalid first mortgage lien against the subject real property.
The Supreme Court correctly determined that the plaintiffs' mortgage should be equitablysubrogated to the rights of the prior mortgagee in the sum of $265,377.65, the amount of theproceeds of the plaintiffs' mortgage which was used to satisfy the prior mortgage, as theappellant's mortgage did not exist at the time the prior mortgage was satisfied (see King vPelkofski, 20 NY2d 326, 333-334 [1967]; LaSalle Bank Natl. Assn. v Ally, 39 AD3d 597, 600-601 [2007];see also Bank One v Mon Leang Mui,38 AD3d 809, 811-812 [2007]). Moreover, the plaintiffs' equitable lien encumbers thesubject property in its entirety (see Great E. Bank v Chang, 227 AD2d 589 [1996]).
The parties' remaining contentions are without merit. Rivera, J.P., Santucci, Carni andDickerson, JJ., concur.