Charles M. Preston, as Receiver of New York Building-Loan Banking Co., Plaintiff, v. Henry E. D'Ambrosio, Defendant.
(Supreme Court, New York Special Term,
March, 1905.)
Foreclosure — Agreement of shareholder with building-loan company.
Where a member and a shareholder of a building-loan company makes a contract with such company, whereby he undertakes to purchase certain real estate, and enter into possession thereof, and also agrees to pay taxes thereon and a certain monthly sum as rental during a period deemed sufficient to mature his charges and thus pay the purchase price and then receive from the company a deed of the premises free from encumbrances; and the contract further provides that if the contracting company make default the company may re-enter and repossess the premises; that all sums advanced by the company shall then become due and payable, and that the company “ should have the power to sell said premises according to law, and should in every way be entitled to the rights and remedies of a mortgagee, and that all overplus after satisfying the said indebtedness with the necessary expenses, out of the pro*524ceeds of sale, should,he paid to the said member whose shares of stock should be canceled or transferred to the purchaser, as the case might be,” the instrument is in the nature of a mortgage and may be foreclosed as such.
Demubbeb on the ground that the complaint does not state facts sufficient to constitute a cause of action.
Charles W. Dayton, for plaintiff.
Otto H. Droege, for defendant.
McCall, J.
The instrument which is the basis of this litigation is certainly a peculiar one, and on first or casual reading of same would undoubtedly incline one’s mind to the belief that the procedure herein instituted was erroneous. The covenant in this instrument which vouchsafes the right of re-entry or repossession by the party of the second part named therein, upon default of party of the first part as to any of the covenants, has larger and wider scope than the mere granting of possession upon breach, and resulting rights upon a default, imposes the responsibility of sale of the premises to the end that, through a proper accounting, the actual interests of these parties or their assigns or successors may be determined and properly adjusted. It cannot be said, therefore, that an unqualified title remained in plaintiff, and such an accounting as is called for cannot be had in summary proceedings, while an ejectment suit could only result in negativing or granting the plea for possession merely. Under all the circumstances it must be said that the instrument partakes of the nature of a mortgage, and the proceedings instituted are proper. Demurrer overruled. Reasonable time to defendant to answer, and, under the circumstances, no costs.
Demurrer overruled; no costs.