| Stracham v Bresnick |
| 2010 NY Slip Op 06629 [76 AD3d 1009] |
| September 21, 2010 |
| Appellate Division, Second Department |
| Bertram Stracham, Appellant, v Alan Bresnick et al.,Respondents. |
—[*1] Jerry F. Kebrdle II, White Plains, N.Y., for respondent Long Beach MortgageCompany.
In an action, inter alia, to declare certain deeds to real property invalid, the plaintiff appeals,as limited by his brief, from so much of a judgment of the Supreme Court, Kings County(Partnow, J.), dated March 26, 2009, as, upon an undated decision of the same court, made after ahearing (Sunshine, Ct. Atty. Ref.), declared that the deeds transferring title to certain realproperty from the defendant Almar Roofing & Sheet Metal Corp., also known as Almar RoofingCorp., to the defendant Chukwuma Osakwe, from the defendant Chukwuma Osakwe to thedefendant Angela Headley, and from the defendant Angela Headley to the defendant 819 DeanStreet Corp., and the mortgage held by the defendant Long Beach Mortgage Company, werevalid, awarded costs and disbursements to the defendant Long Beach Mortgage Company, and, ineffect, dismissed the remainder of the complaint.
Ordered that the judgment is affirmed insofar as appealed from, with costs.
On May 18, 1992, the plaintiff entered into an agreement with the defendant Almar Roofing& Sheet Metal Corp., also known as Almar Roofing Corp. (hereinafter Almar), whereby heleased from Almar, for a period of 30 years, a certain parcel of real property which wasencumbered with a mortgage held by the City of New York. On the same day, the plaintiff andAlmar executed a contract of sale, which provided for the plaintiff's purchase of the sameproperty from Almar, to be financed by a purchase money mortgage. Although the contract ofsale designated May 18, 1992, as the closing date, no closing actually occurred. A rider to thelease contained a clause providing that once the mortgage held by the City of New York wassatisfied, the plaintiff's rent payments to Almar would be credited to the purchase moneymortgage the plaintiff gave to Almar. The plaintiff and Almar's principal, the defendant AlanBresnick, also agreed that once the rent payments were converted into mortgage payments,Bresnick would give the plaintiff the deed to the subject property. The lease and the contract ofsale were recorded by the plaintiff on April 30, 1997.
By deed recorded on October 28, 1997, before Almar's mortgage with the City of New Yorkwas satisfied, Almar transferred the subject property to the defendant Chukwuma Osakwe. In2002, Osakwe, in turn, transferred the subject property to the defendant Angela Headley. [*2]To finance that purchase, Headley obtained a mortgage loan fromthe defendant Long Beach Mortgage Company (hereinafter Long Beach). In 2003, Headleytransferred the subject property to the defendant 819 Dean Street Corp. In February 2005, theCity of New York acknowledged the satisfaction of its mortgage. However, the closing referredto in the May 18, 1992, contract of sale never occurred, and the deed to the subject property wasnever delivered to the plaintiff.
In March 2005, the plaintiff commenced this action, seeking, among other things, a judgmentdeclaring that the deeds transferring title to Osakwe, Headley, and 819 Dean Street Corp.(hereinafter collectively the purchasers), and the mortgage held by Long Beach, are invalid. Aftera hearing before a court attorney referee, the Supreme Court entered a judgment which, inter alia,declared that the deeds transferring title and the mortgage were valid, and, in effect, dismissedthe remainder of the complaint. The plaintiff appeals.
The recording of a transaction involving real property provides potential subsequentpurchasers with notice of "previous conveyances and encumbrances that might affect theirinterests" (Andy Assoc. v Bankers Trust Co., 49 NY2d 13, 20 [1979]; see RealProperty Law § 291). In addition, " ' [w]here a purchaser has knowledge of any fact,sufficient to put him [or her] on inquiry as to the existence of some right or title in conflict withthat he [or she] is about to purchase, he [or she] is presumed either to have made the inquiry, andascertained the extent of such prior right, or to have been guilty of a degree of negligence equallyfatal to his [or her] claim, to be considered as a bona fide purchaser' " (Maiorano v Garson, 65 AD3d1300, 1303 [2009], quoting Williamson v Brown, 15 NY 354, 362 [1857]).Similarly, a mortgagee is under a duty to make an inquiry where it is aware of facts "that wouldlead a reasonable, prudent lender to make inquiries of the circumstances of the transaction atissue" (LaSalle Bank Natl. Assn. vAlly, 39 AD3d 597, 600 [2007]). "Actual possession of real estate is sufficient notice toa person proposing to take a mortgage on the property, and to all the world of the existence ofany right which the person in possession is able to establish" (Phelan v Brady, 119 NY587, 591-592 [1890]; see 1426 46 St.,LLC v Klein, 60 AD3d 740, 743 [2009]).
Title to the subject property was never conveyed to the plaintiff and, thus, he never becamethe owner of the property. Therefore, regardless of whatever notice the purchasers may have hadas a result of the lease and contract of sale recorded by the plaintiff, the plaintiff did not have anownership interest in the property that would defeat any of the conveyances to those parties orLong Beach's mortgage. Moreover, although the plaintiff resided on the subject premises, whichwas sufficient to require an inquiry by the purchasers and Long Beach into "the existence of anyright which [the plaintiff was] able to establish" (Phelan v Brady, 119 NY at 591-592),such an inquiry would have revealed only the leasehold interest held by the plaintiff. Such apossessory interest was not "in potential conflict" (Maiorano v Garson, 65 AD3d at 1303)with the interests in the property acquired by the purchasers and Long Beach. Furthermore, arecorded contract of sale is enforceable against subsequent purchasers, but only for 30 days afterthe closing date (see Real Property Law § 294 [1], [4] [a]; [5], [8] [a]). Here, theplaintiff did not record the contract of sale until nearly five years after the date designated as theclosing date in the May 18, 1992, contract of sale, and the contested conveyances of the subjectproperty occurred even later. Accordingly, the Supreme Court properly declared that the deedstransferring title to Osakwe, Headley, and Dean Street, and the mortgage held by Long Beach,were valid.
The plaintiff's remaining contentions are without merit (see Chambers v City of NewYork, 309 AD2d 81 [2003]; Allied Scrap & Salvage Corp. v State of New York, 26AD2d 880 [1966]). Prudenti, P.J., Skelos, Florio and Sgroi, JJ., concur.