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Albany Savings Bank v. David Thum Realty, Inc.
Citations: 97 A.D.2d 891; 470 N.Y.S.2d 455; 1983 N.Y. App. Div. LEXIS 20682
Court: Appellate Division of the Supreme Court of the State of New York; November 16, 1983; New York; State Appellate Court
An appeal was filed regarding a Supreme Court order from September 7, 1982, which granted Fulton County National Bank and Trust Company's motion for the distribution of surplus funds in a mortgage foreclosure action initiated by Albany Savings Bank, the first mortgagee. The case involved a disputed sum of $3,901.97, held by the Fulton County Treasurer, representing surplus money from a receiver appointed during foreclosure proceedings. The foreclosure auction saw Albany Savings Bank as the successful bidder at $48,000, despite other bidders being present. The sale terms, incorrectly including a provision about surplus funds, stated that if a third party purchased the property, they would receive the net proceeds, but if the purchaser was the plaintiff, the funds would be turned over to them by court order. Albany Savings Bank was not required to pay the full bid amount upfront but was to receive a deed after covering expenses, which totaled approximately $16,000. Post-sale, the referee's report indicated that Albany Savings Bank was owed $48,586.56, but they later sold the property for $30,000. Fulton County National Bank moved to confirm the referee's report and claimed the surplus funds after deducting $586.56. Albany Savings Bank cross-moved for a deficiency judgment. The court, upon reargument, granted Fulton County National Bank's motion and denied Albany's cross motion. Under RPAPL 1371, a mortgagee can recover funds held by a receiver without needing a deficiency judgment, provided that the foreclosure judgment exceeds the sale price. The court determined that Albany was only entitled to the deficiency of $586.56, as the funds held by the Treasurer did not meet the amount owed. It also noted that any terms of sale conflicting with the foreclosure judgment were void. The order was affirmed with costs.