The opinion of the court was delivered by: RYAN
Plaintiff has moved, upon due notice, for an order assessing damages against the bidder and purchaser at the first foreclosure sale herein, J & N Holding Corporation, and its assignee, LCC Holding Corporation, and any and all parties claiming by or through them or either of them, and holding them liable for all costs, losses and damages incurred by plaintiff arising out of the default of said purchaser and its assignee and the consequent necessary resale of said mortgaged premises and directing that all funds heretofore received by or deposited with the Special Master appointed herein by or on behalf of said J & N Holding Corporation or its assignee, be forfeited and applied in payment of said costs, losses and damages incurred by plaintiff, all without prejudice to plaintiff's right to recover from said J & N Holding Corporation or its assignee any difference between said amount forfeited and such costs, losses and damages and all without prejudice to plaintiff's further right to recover any deficiency under the mortgage and agreements sued upon herein from any and all parties who may be liable therefor and for such other and further relief as to the Court may seem just and proper.
We have concluded that the relief sought should be granted as hereinafter set forth and an order so providing may be submitted without notice of settlement, since no one has appeared in opposition.
William H. Jackson, Esq., who, on January 7th, 1965, was first appointed in this action by the Court as a Referee to ascertain, compute and report as to the amount due plaintiff on the mortgage in suit, has filed full affidavits of his services since rendered, and now asks that his compensation be fixed for all services rendered as Special Master to sell and convey on the judgment of foreclosure entered herein. We find just, fair and reasonable compensation for these services so rendered to be $3,500.00 in addition to the $300.00 heretofore allowed and it is fixed in that amount; an order so providing may be submitted.
We find from examination of the records and files in this action the following undisputed facts.
This action was filed on June 10, 1964, by The First National Bank of Washington (the "Bank") in the Supreme Court of the State of New York for the County of Sullivan, to foreclose a mortgage on approximately 159 acres of land with buildings thereon situate at Thompson, Sullivan County, New York comprising a part of the premises of a summer camp consisting of about 216 acres. The defendants included, among others, the record owner of the property, Breezy Point Camp, Inc. (name changed to Rock Hill Lodge & Resort Corporation), Joan L. and Frank J. Crisona and Florence and Joseph Harris, the individual obligors. On July 30, 1964 the Supreme Court authorized the filing of an amended complaint, to bring in additional parties defendant, which was thereafter duly served on all defendants.
On August 25, 1964, the action was removed to this Court on petition of the United States of America, a party to the action by reason of the existence of certain federal tax liens against the mortgaged premises. By order dated October 21, 1964, this Court authorized the service of a second amended complaint, to bring in further additional parties defendant, which was thereafter duly served on all parties. One defendant answered and then withdrew its answer. All other defendants either defaulted in pleading or appeared and waived service of all papers in the action except certain specific papers not here material. From the outset and throughout all proceedings had herein the mortgagor and the individual obligors defaulted.
By order entered herein on January 7, 1965, William H. Jackson, Esq., was appointed Referee to compute and take plaintiff's proofs. Upon due notice, he held hearings and filed his report which was confirmed on March 10, 1965, and on that date a judgment of foreclosure and sale was entered by the Court, which judgment awarded plaintiff the sum of $437,406.44 with interest on $436,895.00 thereof at a rate of 6% per annum from January 18, 1965, and on $611.44 at 6% per annum from March 10, 1965. A fee of $300.00 was awarded to him, for his services as Referee and he was thereafter also designated the Special Master to sell the mortgaged premises at public sale.
Thereafter, the mortgaged premises were duly advertised for sale and proofs of publication were duly filed in this Court. In pursuance of the judgment of foreclosure the Master attended the advertised sale on April 21, 1965, and there read aloud the Terms of Sale to all persons assembled at the scheduled place of sale, i.e., the Sullivan County Court House, Monticello, New York. The Terms of Sale provided, among other things:
"2nd. The residue of said purchase money will be required to be paid in cash or certified check to the said Master at his office, 107 William Street, New York City, in the County of New York, New York on the 1st day of May, 1965, at 2:30 P.M., when the said Master's deed will be ready for delivery.
"6th. The biddings will be kept open after the property is struck down; and in case any purchaser shall fail to comply with any of the above conditions of sale, the premises so struck down to him will be again put up for sale under the direction of said Master under these same terms of sale, without application to the Court, unless the plaintiff's attorneys shall elect to make such application; and such purchaser will be held liable for any deficiency there may be between the sum for which said premises shall be struck down upon the sale, and that for which they may be purchased on the resale, and also for any costs or expenses occurring on such resale."
(Report of Special Master (RSM) filed herein June 29, 1965, Par. 3 and Ex. thereto.)
There were no bidders except one John M. Neiman ("Neiman") and the plaintiff. The Master struck off the premises to Neiman, who stated that he was bidding on behalf of J & N Holding Corporation ("J & N"), for $350,000, that being the highest sum bid. (Subsequently, Neiman identified himself as an officer of J & N, i.e., its Secretary. See Ex. to RSM, Min. May 28, 1965, p. 6.) Thereafter a Memorandum of Sale, which recited that the purchaser agreed to comply with the terms and conditions of sale, was executed by Neiman on behalf of J & N, and the Master, who received from the former $35,000, namely 10% of the bid, as part payment of the purchase price. (Exhibit to RSM) That sum was thereafter deposited in the special account opened, pursuant to the judgment of foreclosure, in the Sterling National Bank and Trust Company of New York (RSM Par. 3).
It further appeared that because the closing of title specified in the Terms of Sale (Ex. to RSM) was Saturday afternoon, May 1, 1965, a stipulation changing it from May 1 to May 3, 1965, was executed by the Master, and Neiman, acting for J & N, and defendant Frank J. Crisona, who then identified himself as attorney for the purchaser, and was consented to by the plaintiff's attorneys (Ex. RSM). On May 3, 1965, there was delivered to the Master an Assignment executed on behalf of J & N, in which it was stated that J & N assigned to "L.C.C. Holding Corporation, a New York corporation" ("LCC") all its right, title and interest in and to a certain Memorandum of Sale dated April 21, 1965 between Neiman, acting for J & N as purchaser, and William H. Jackson, as Master (Ex. to RSM). On that same day Neiman requested an adjournment of the closing although the Special Master was prepared to tender a deed. A stipulation was then executed by the Master and Neiman who signed on behalf of the "Assignee of the Purchaser" adjourning the closing to May 7, 1965 (Ex. to RSM). Said stipulation further recited:
"In consideration of the aforesaid adjournment, the undersigned assignee has paid to the Special Master, on account of the purchase price the additional sum of $5,000, the receipt whereof by check is hereby acknowledged subject to collection."
On May 7, 1965, a further adjournment was requested on behalf of the assignee of the purchaser as a result of which a stipulation was entered into adjourning the closing of title until May 17, 1965 (Ex. to RSM). That stipulation stated:
"In consideration of the aforesaid adjournment the undersigned, Frank J. Crisona on behalf of the assignee has paid to the Special Master, on account of the purchase price an additional sum of $25,000 by bank check, Royal National Bank, New York, New York, ...