
    George G. Youngs, Appellant, v. Charles A. Stoddard, Robert B. Snowden, Lydia P. Snowden, his Wife, Arthur C. Snowden and Susan A. Von Tagen, Respondents, Impleaded with The Mayor, Aldermen and Commonalty of the City of New York, Defendant.
    
      Equity — transfer of lands under an agreement, secured by a mortgage on the premises by the grantee, to pay the (mount of an award made for the land in condemnation pi'oceedings — right of a subsequent grantee of the original grantors, to a proportionate part of the award—-right to maintain an action against the city making the ■ award.
    
    Parties named Snowden, being the owners of a tract of land in the city of New York, executed a quitclaim deed of it to one Vail for a nominal consideration upon the latter’s agreement, the .performance of which was secured by his mortgage upon the premises, to pay to the Snowdens any award made to him for the taking of the land for a public use. . Subsequently the Snowdens executed to one Louisa J. Morgan a warranty deed of land bordering upon an unopened street, together with all their interest in lands in front of the premises lying within the lines of the street, which latter land had been included in the quitclaim deed to Vail. The city having, upon the opening of the street, made an award for lands, including.those in the street, conveyed to Louisa J. Morgan, to one Stoddard, to whom Vail had for a nominal consideration quitclaimedthe tract-conveyed to him, “subject to the terms, conditions and agreement” between him and the Snowdens, the grantee of Louisa J. Morgan brought an action in equity to recover from the city her proportionate part of the award, asking that the city pay it over to him and to have the deeds to Vail and Stoddard declared void.
    Upon the hearing of demurrers interposed to á complaint which alleged the fore-. going facts,
    
      Held, that the complaint stated a cause of action for a proportionate part of the award;
    That, even though the deeds were not void, the effect of the transaction between the Snowdens and Vail was to render the Snowdens mortgagees of the tract; that their right as mortgagees passed to Louisa J. Morgan under their warranty deed to her, and that the award stood in place of the land itself;
    That the action of the commissioners in making the award to Stoddard, and the confirmation of their report, did not foreclose the plaintiff of his right, as the grantee of Louisa J. Morgan, to his proportionate share of the award;
    That the plaintiff was not bound to await Stoddard’s pleasure in asking for the award and then proceed against him, but might bring an equitable action against the city to secure the payment to the plaintiff of his share of the aw'ard.
    Appeal by the plaintiff, George G. Youngs,'from an interlocutory judgment of the Supreme Court, entered in the' office of the -clerk of the county of New York on the 22d day of November, 1897, upon the decision of t-he court rendered after a trial at the New York Special Term, sustaining the demurrer of the defendant Charles A. Stoddard, and the joint demurrer of the defendants Robert B. Snowden, Lydia P. Snowden, Arthur C. Snowden and ¡Susan A. Yon Tagen to the amended complaint, with notice of an intention to bring up for review upon such appeal the decision, bearing date the 16th day of November, 1897, and entered in said ■clerk’s office, upon which such judgment was entered;
    This is an action in equity to secure a proportionate part of an Award made to the defendant Stoddard by commissioners of estimate and assessment, appointed in a proceeding brought by the city to condemn certain lands in One Hundred and Eighty-second street, between Audubon and Eleventh avenues.
    The facts alleged are substantially these : In December, 1889, certain of the defendants and others, who, for the sake of brevity may be called the Snowden. family, conveyed to Louisa J. Morgan by ' warranty deed a lot of land, fifty feet in width, upon the north side •of One Hundred and Eighty-second street, together .with all • their right, title and interest in and to one-half of One Hundred' and Eighty-second street, “in front of and adjoining the premises so-conveyed.” Louisa J. Morgan subsequently conveyed the same premises to the plaintiff, who was her grantee thereof at the time the award in question was made.
    . About a month prior to the conveyance to Louisa J. Morgan the Snowden family and one John J. Vail executed) as part of one and the same transaction, three instruments, viz.:
    1. A quitclaim deed (for a nominal consideration) from the Snow-dens to Vail of a large tract of land, including the one-half of One Hundred and Eighty-second street, in front of the premises subsequently conveyed to Morgan.
    2. A contract, under seal, between. Vail and the. Snowdens (set up verbatim in the complaint), whereby Vail agreed to pay to the Snowdens all moneys which he at any time thereafter might receive as damages awarded to him for the taking of said land for a public use.
    3. A mortgage given by Vail to the Snowdens to secure performance of the latter contract.
    Vail subsequently quitclaimed these premises- for a nominal consideration to the defendant Stoddard, “ subject to the terms, conditions and agreement ” between himself and the Snowdens. The city condemned the land in question for the opening of One-Hundred and Eighty-second street, and the commissioners awarded to Stoddard the sum of $4,755.50 for the land embraced within one-half of One Hundred and Eighty-second street. This award was for a strip of 350 feet, in which the plaintiff’s 50 feet were included. The plaintiff asks judgment that he be declared to be the owner of a proportionate part of the award made to Stoddard;. that the proportionate part be ascertained and that the city be directed to pay it over to him. He also asks that the deeds to Vail and to Stoddard be declared void. . .
    
      Michael Fennelly, for the appellant.
    
      Carroll Berry, for the respondents.
   Barrett, J.:

We need not consider the question as to the validity of the- deeds i to Vail and Stoddard, because, assuming them to be valid, we think the complaint stated a good cause of' action for the recovery of the plaintiff’s proportionate part of the award in question. The effect of the three instruments, executed between the Snowden family and Yail, was to vest in the former the right to have and receive whatever sums might be awarded as damages for the taking of the land in question for public use. It will be observed that Yail gave the Snowdens a mortgage upon the very land which was cotemporaneously quitclaimed to him to secure his covenant with regard to the award. Thus the Snowdens, when they conveyed to Louisa .J. Morgan, were at least mortgagees of the one-half of One'Hundred and Eighty-second street, in front of the premises so conveyed, and their mortgage interest passed to her. Certainly every right which the Snowdens possessed under the transaction with Yail was, by their warranty deed to Morgan, conferred upon the latter. Thus the plaintiff, as the grantee of the mortgagees of the land in the street taken by the city, was equitably entitled to whatever award was made therefor.

The damages, when awarded to Stoddard, became a substitute for the mortgage interest. As was said in Astor v. Miller (2 Paige, 76): “ Upon the principles of eqiiity.the mortgage then became a specific lien upon the fund instead of his (the mortgagee’s) interest in that part of the land.” The rule laid down in this case has since been frequently applied and has never been questioned. That rule is succinctly stated in the head note as follows: “ Where either real or personal estate, upon which there is an outstanding mortgage, is turned into money, the rights of the mortgagee continue unaltered, and the court will direct the application of the money according to the rights of the parties as they existed previous to the alteration of the estate.” . This case was reversed upon other questions in Astor v. Hoyt (5 Wend. 603), but the rule in .question was affirmed and Chief Justice Savage said “that the mortgagees are entitledrima faoie to so much of the fund as may be considered the substitute of that part of the premises taken from the operation of the mortgage and appropriated to public use.”

Applying these principles, it would seem quite clear that the plaintiff was entitled to his share of the award in question. Stoddard’s claim is that he and he alone is entitled to the award, for the reason that the commissioners have awarded it to him and that the award has been confirmed by the court. He admits, however, that when he recovers the award from the city, the plaintiff will, under the statute (Consol. Act [Laws of 1882, chap. 410], § 993), have a good cause of action against him at law for his proportionate share thereof. His contention is, that, except so far as the statute gives that particular right of action, the plaintiff’s rights are finally ■ foreclosed by the confirmation of the commissioners’ report,

, We think this position is unsound. The order confirming the commissioners’ report is undoubtedly final and conclusive upon all parties interested, that is, as to the essential features of the proceeding. Thus, it is conclusive as to the condemnation of the land and the amount of the award. (In the Matter of Department of Parks, 73 N. Y. 565.) It also binds the city to pay the awards to the persons to whom they are specifically given. But even this latter obligation is limited to payments made without notice of adverse claims, Where such notice has been given, the city is not bound to pay the award to the person named in the commissioners’ report. Indeed, it does so at its peril. (Hatch v. The Mayor, 82 N. Y. 436.) Its duty in that case is to interplead the rival claimants ; or, if sued by the person named in the report, to move to. substitute the adverse claimant as a party defendant, upon payment of the amount in dispute into court, as where an award is made to unknown owners. (Barnes v. The Mayor, 27 Hun, 236.) The right to the award, as between rival claimants thereto, who have not appeared before the commissioners or there litigated their adverse claims* is a subsidiary incident to the main proceeding, but is not of its essence. All parties, whether they appeared or not, are undoubtedly foreclosed as to the amount of the award, but no one is foreclosed as to his right thereto unless he has actually submitted his claim to the arbitrament of the commissioners and the action of the court thereon. The governing principle is the same whether the commissioners make the award to an unknown owner or to one whom they name as owner. That it was not the intention, as between the real owner and the. person named as such in the commissioners’ report, to finally foreclose the former, is apparent, when we see that the statute .itself confers a right of action, upon the person to whom the award of right belongs, to recover from its actual recipient the amount paid to the latter by the city as so much money had and received for the real owner’s use. (Laws of 1882, chap. 410, § 993.) These views are supported by the cases already cited, and still more directly by Spears v. The Mayor (87 N. Y. 372); Cassidy v. The Mayor (62 Hun, 358), and Coutant v. Catlin (2 Sandf. Ch. 485).

The respondents contend that the rule on this head, which was laid down by Judge Earl in the Spears case, falls with the repeal of a provision in the Consolidation Act to which the learned judge referred as enforcing his position. That was a provision requiring the person to whom an award was made to prove his title in the action which the statute authorized him to bring against the city for the recovery of the award. The argument from this was, that the confirmation of the commissioners’ report could not very well be final and conclusive upon the right of recovery when the person to whom the award was made was thus called upon again to prove his title. It is true that this provision was abrogated by chapter 449 of the Laws of 1895 (§ 3, amending § 992 of the Consol. Act), which takes away the former right of action and substitutes therefor a summary application to require the comptroller to pay the amount awarded. It is also true that this summary application need not be founded upon further proof of title. The act of 1895 does not require this. But the fallacy of the respondents’ position is in supposing that the rule to which we have referred was based wholly upon this requirement as to proof of title in the action to recover the award. That was one of the arguments, and a cogent one, in support of the rule. But it was by no means the only one. Other equally substantial reasons are given by Judge Earl in support of his position, such as the fact that the “ ascertainment of the names of the persons whose lands were taken or to whom damages were to be paid was merely incidental to the main purpose ” of the proceeding.; and the further fact, to which we also have adverted, that a right of action is given to the real owner to recover what he is justly entitled to from the actual recipient. This latter consideration is quite as cogent as the requirement of • further proof of title in the action (formerly given by the statute) to recover the award. We think it quite clear,.both upon principle and authority, that the plaintiff here was not foreclosed of his right to a proportionate part of this award, either by the action of the commissioners or by the confirmation of their report.

The remaining question is, whether he may maintain this action in equity to recover directly from the city. We see no reason why he cannot. The Spears case is again a direct authority in support of such an action. It was there sustained, notwithstanding the . proof that the person claiming the award adversely to the plaintiff .was solment. “It is true,” said Judge Earl, “that \\e.(the adverse claimant., Matthews) has been found solvent upon the trial of this action, but it would not be just to deprive the plaintiffs of the absolute responsibility of the city, and turn them over to the mere personal security of Matthews.” He added that the form of action in equity had “ deprived neither the city nor Matthews of any substantial right,” and that it was quite proper to have the adverse claims to the award determined in such an action. The fact that the award in that case was made to the nominal owner, subject in terms to the mortgage, does not substantially distinguish that case from the present. The principle is the same whether the mortgage was referred to by the commissioners in the absence of the mortgagee, or ignored. Why should the plaintiff here, be required to await Stoddard’s pleasure in asking for the main- award ? The statute gives the plaintiff no right of action against him until he has actually received the amount of the award. And no provision is made by which he can be compelled to apply for payment at any particular time. And looking at the matter practically, what need is there for circuity of action, if Stoddard honestly intends to fulfill his covenant ? But. the original parties did not rely upon his naked covenant. That is plainly evidenced by the mortgage they took to secure- it. Thus, as equitable mortgagee, the plaintiff had a lien upon the land. As such mortgagee, he has the same lien upon the present substitute for the land. Clearly he may enforce that lien by a direct action in equity. If not, of what avail is his mortgage ? It becomes meaningless if the plaintiff is limited to an action against Stoddard upon the covenant. It was because the original parties did not intend to.be thus limited that the mortgage was given. It was given to secure the covenant, and it can effect the purpose for which it was thus given only in case the award is treated as subject to its lien and payable directly to its holder.

Our conclusion is that the action was well brought, and that the demurrers to the complaint should have been overruled.

It follows that the interlocutory judgment should be reversed, with costs, and the demurrers overruled, with costs, with leave to the defendants to answer over upon payment of the costs of this appeal and of the court below.

Van Brunt, P. J., ¡Rumsey, O’Brien and Ingraham, JJ., •concurred.

Interlocutory judgment reversed, and demurrers overruled, with costs, with leave to defendants to answer over on payment of costs of appeal and of the court below.  