AUGUST BELMONT, Plaintiff and Respondent, v. ELIAS PONVERT, Defendant and Appellant.
An agreement with a judgment creditor that certain acts of forbearance on his part, “ shall not prejudice the lien of his judgment, or his right to payment out of the future proceeds of the property, but that said judgment shall remain and continue liens upon the property, and entitled to payment out of the future proceeds thereof,” did not, by the terms stated, give to the judgment creditor any interest oí right for the payment of his lien out of rents of the premises.
By the word “ proceeds,” under the agreement, is meant the amount of money that in the future would be obtained for the property upon a disposition of it by “ sale.” Dow ». Hope Ins. Co., 1 Hall, 166; Dow v. Whetton, 8 Wend. 160, support such a definition.
Before Monell, Curtis, and Sedgwick, JJ.
Decided January 7, 1873.
Appeal from a judgment entered at the Special Term, •and motion for a new trial.
On the 26th of March, 1846, Daniel .E. Tylee made an .assignment, for the "benefit of his creditors, to Julian •Chastelain, of the firm of Chastelain & Ponvert, and Daniel H. Turner.
Chastelain & Ponvert, and also Philo S. Shelton, were creditors of Tylee.
A suit was pending, brought by Jane Dempsey, to recover the real estate claimed to belong to Tylee.
The defence of this suit was assumed by Chastelain & Ponvert at or shortly after the assignment, and expenses were incurred in such defence, and in opening an adverse decree, obtained by default, and in obtaining the substitution of a new attorney.
On the 6th of January, 1847, Shelton and Ponvert *209purchased a decree of foreclosure of a mortgage held by George Lovett.
Shelton and-Ponvert also purchased the certificate of the sale of the same premises, made September 13, 1848, under a judgment in favor of Brower & Nelson.
The defendant, Belmont, held judgments, under which he was entitled to redeem the premises.
If Jane Dempsey succeeded in establishing her claim to the premises, upon which the mortgage and the judgments were liens, neither of the parties were likely to be paid anything. All were, therefore, interested in the defence of that suit.
In this state of the affair, the agreement mentioned in the complaint, and admitted in the answer, was entered into on the 13th December, 1849, and purports to have been made between the plaintiff, the defendant, Elias Ponvert, and one Philo S. Shelton, and recites the recovery by the plaintiff, and the docketing of two judgments against Daniel E. Tylee and James J. Mapes— one on the 13th January, 1846, for $5,550^-^, and the other on the 28th February, 1846, for $7,871TW. The recovery and docketing of another judgment against the same parties by Brower & Neilson, for $1,163^, on the 17th February, 1846. It further recites that the judgments were claimed to be liens on certain premises claimed to belong in fee to Tylee, but that the title of Tylee was disputed by one Jane Dempsey, and that the interest of Tylee was subject to a mortgage dated June 13, 1843, executed by him to George Lovett, to secure $12,000 and interest, upon which a decree of foreclosure had been made about June, 1846, but which decree had not been executed; and that a sale had been made under execution upon the Brower & Neilson judgment of the interest of Tylee in the premises. It then proceeds to state that Philo S. Shelton and Elias Ponvert were the owners by purchase and assignment of the decree upon the mortgage, and of the Brower & Neilson *210judgment, and of the certificate of sale under the same, and were then, in conjunction with the firm of Chaste-lain & Ponvert, defending said suit of Jane Dempsey, and litigating the same, for the purpose of establishing Tylee’s title.
Such, then, being the situation of the parties, as above recited, and the additional fact existing, which appears from the evidence in the cas.e, that Chastelain & Ponvert, of which firm Ponvert was a member, were creditors at large of Daniel E. Tylee to the extent of $200,000 (fol. 139), the parties make the covenants in the agreement contained. These covenants, on the part of Shelton and Ponvert, are as follows: That “in consideration of the premises, and of said plaintiff forbearing to exercise the right of redemption from said sale, under the Brower & Neiison judgment, and forbearing to sell under his own judgments,” they covenant and agree ‘‘that Ms forbearance to redeem shall not prejudice the lien of his judgments, or either of them, or his right to the payment of the said judgments, or either of them, out of'the future proceeds .of the said property, but that said judgments and decree shall remain and continue liens upon the property, and entitled to payment out of the future proceeds thereof (if sufficient for the purpose), in the following order of priority, namely:
“ First. The mortgage decree.
“ Second. The first judgment of August Belmont.
“ Third. The Brower & Neilson judgment.
“ Fourth. The second judgment of Belmont.
“ Fifth. The balance of said proceeds, if any, to Chastelain & Ponvert and said Shelton.”
The agreement then contains a mutual covenant between the parties that the Dempsey suit “ should be litigated at the joint and equal expense of Shelton and Ponvert and Belmont, and that each should bear and pay one-half of all costs and counsel fees that had been incurred and paid by Shelton and Ponvert and Chaste-*211lain & Ponvert since the defence thereof was assumed by said Chastelain & Ponvert, and also all counsel fees and expenses thereafter to accrue until the final termination of the litigation.”
It was also by said agreement further stipulated and agreed that neither of said judgments, nor the said mortgage decree, nor the sheriff’s certificate, should be used by either of the parties to the prejudice of the other, nor otherwise than for the purpose of perfecting title to the said premises, for the purpose of carrying out said agreement, and cutting off other liens and encumbrances thereon.
Chastelain is dead.
Shelton parted with his interest to Taylor, in 1859, and Taylor assigned to Ponvert in 1860. The costs and expenses were, however, paid by Chastelain & Ponvert, and by Ponvert after Chastelain’s death.
The action was brought in October, 1860, to compel a sale of the premises in question, and payment of plaintiff’s two judgments from the proceeds.
It was tried at Special Term, January, 1863, before the Hon. J. 8. Bosworth, and a judgment or decree entered on his decision on the 11th of May, 1863.
On the 19th March, 1865, upon the plaintiff’s own motion, an order was made setting aside this judgment, and permitting plaintiff to amend his complaint by inserting allegations of the receipt of rents by defendants, and a claim for the application of the same in favor of plaintiff.
The amended complaint was served January 30, 1866.
The answer thereto was served 17th March, 1866.
The action was tried at Special Term before the Hon. Samuel Jones, without a jury, May 30, 1866.
It was decided by his Honor, Judge Jones, on the 21st February, 1871.
*212Judgment for plaintiff was entered September 4, 1871.
The learned judge of the Special Term held among other things, that plaintiff was entitled to an interest in the rent of the premises in question. This statement, and the opinion of the court, fully shows the points adjudicated upon.
W. W. Macfarland, of counsel, for plaintiff.
C. W. Sandford and Abm. Lawrence, Jr., for defendant.
By the Court.—Sedgwick, J.
We are of opinion that the learned court below erred in adjudging that the plaintiff was entitled to an interest in the rent of the premises in question. On this ground the judgment must be set aside.
Before the execution of the agreement in which the plaintiff rests, he had, by virtue of the judgment he owned, only a general lien upon the house and lot in question. He had no estate or interest in the land, and no right to the rent. The agreement did not convey to the plaintiff any right in the land, or provide that he should in any contingency be entitled to any. It only provided, in behalf of the plaintiff, that the lien he held should be preserved and then paid out of the future proceeds of the property. If the term “proceeds” included rent, then the agreement gave him so much of that as might be necessary to pay the judgment he held, but not a proportion of the rent.
We agree with the learned judge below, that “proceeds,” under the agreement, meant the amount of money that in the future would be obtained for the property upon a disposition of it by sale. The observations in the cases of Dow v. Hope Ins. Co., 1 Hall, 166, and Dow v. Whetten, 8 Wend. 160, in determining the meaning in a policy of insurance of the words “proceeds of a cargo,” support such a definition. There*213fore, under the agreement, the plaintiff has no right to payment of his lien out of the rents of the premises.
The court was correct in not taking proof, as to whether any, or what expenses had been paid by the defendants in defending the Jane Dempsey suit. The answer did not claim, that, by the plaintiff’s agreement to contribute to the expenses of defending that suit, the defendant was entitled to have judgment in this action by way of counter-claim in the amount the plaintiff should have contributed, or that upon a distribution of the proceeds of the property under the agreement, the defendants should be allowed to obtain out of the plaintiff’s share the amount of the price he was bound to pay. On the contrary, the answer specifically stated that ‘£ a suit is now pending to recover the same, which was commenced prior to this action.” The answer then sets up in bar of this action, that the plaintiff, “ whilst refusing to contribute to or towards said expenses of said litigation, and refusing to pay his proportion thereof, cannot claim any right or interest in the proceeds thereof.”
The plaintiff’s right to payment of his judgment out of the proceeds of the property, was not made by the. agreement dependent upon his payment of his share of the expenses, any more than his obligation to pay-a share of the expenses depended upon his receiving from the proceeds the amount of his judgment. The defendant, not having sought an amendment of his answer, could not use the agreement by plaintiff to pay part of the expenses for any other purpose than that set out in the answer.
A new trial must be granted, with costs to the appellant to abide the final disposition of the question of costs, after the new trial. Before the new trial shall be had, the defendant will have opportunity to have his right to amend his answer upon just terms examined and determined.