Tax Lien Co. v. . Schultze , 213 N.Y. 9 ( 1914 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] When an easement is carved out of one property for the benefit of another the market value of the servient estate is thereby lessened, and that of the dominant increased practically by just the value of the easement; the respective tenements should therefore be assessed accordingly. (People ex rel. Poor v.Wells, 139 App. Div. 83, 87; affd. on opinion below, 200 N.Y. 518. See Blenis v. Utica Knitting Co., 73 Misc. Rep. 61; affd., 149 App. Div. 936; affd., 210 N.Y. 561; Smith v.Mayor, etc., of N.Y. 68 N.Y. 552, 557; People ex rel. Topping v.Purdy, 143 App. Div. 389; affd., 202 N.Y. 550; Matter ofHall, 116 App. Div. 729; affd., 189 N.Y. 552.)

The assessment of the lot described in the judgment did not include the easements appurtenant to the adjoining real property. The assessment of the servient estate was subject to the easements included in the assessments of the dominant estate. As a necessary consequence it has been held that on the foreclosure of a tax lien and a sale of the premises pursuant to sections 1035-1039 of the Greater New York charter, private easements of light, air and access of adjoining owners over the land sold are not extinguished. If property rights which are excluded from an assessment are sold or extinguished by a tax sale, there would be a taking of property without due process of law. (Jackson v.Smith, 153 App. Div. 724; affd. on opinion below by decision handed down herewith, 213 N.Y. 630.)

The owners of the property adjoining the property described at the tax sale including the easements over the property so described were not necessary parties to the action to foreclose the tax lien. They were made parties to the action and the question now arises whether the easements of those who made default in appearing in the action are cut off by the judgment taken against them by such default.

We are not in this case considering the propriety of making a person who claims in hostility to a tax lien a party defendant in an action to foreclose such lien. The question before the court is as to the effect of making a person claiming an interest superior to a tax lien a party in a case where the propriety of making such a person a party defendant is not in any way presented in the action.

It is a general rule that a judgment is conclusive between the parties and their privies upon all matters embraced within the issues in the action which were or might have been litigated therein. It is immaterial whether issues are joined by an answer to the complaint or tendered by the plaintiff and left unanswered. The rule applies as well to a judgment by default when the facts stated warrant the relief sought as to one rendered after contest. (Goebel v.Iffla, 111 N.Y. 170.) Was the question whether the defendants had easements in the property described that are superior to the tax lien an issue in the action? The answer to the question should be determined from the judgment roll.

The judgment roll was referred to in the notices of motion, but it is not a part of the record. In one of the affidavits upon which the plaintiff's motion is founded it is stated that certain defendants were named as such to cut off possible easements or rights of way. The statement, we assume, is that of the affiant and not a quotation from the complaint.

It is in one of the affidavits stated that the complaint alleges "That all of the defendants have or may have and the plaintiff believes that such defendants have or may have an interest in or claim upon the real property hereinafter described by way of lien, mortgage, devise, dower right, purchase, easement, operation of law, inheritance from or marriage with any of the above named defendants or otherwise."

It is not disputed that the defendants were the owners of easements appurtenant to adjoining lands. Such easements were acquired prior to the tax lien and were not subject to it.

If a plaintiff in any foreclosure action chooses to make a person who claims that he holds a lien upon or interest in the property sought to be foreclosed that is prior and superior to the claim of the plaintiff, a party defendant, either for the purpose of determining the amount of the claim and paying it from the proceeds of sale or of having the same declared to be subject and subordinate to his lien, such claim should be clearly stated in the complaint.

When a plaintiff so clearly states his claim in a complaint the defendant must appear in the action and present his claim by appropriate pleading or pleadings, and if necessary by proof or suffer the ordinary consequences of a default.

If the plaintiff's claim is not so clearly stated in the complaint, but some general allegations are used therein to the effect that a claim is made by the defendant "as subsequent purchaser or encumbrancer or otherwise," it will not bar the defendant of rights that are superior and paramount to that of the plaintiff if he default therein. (Lewis v. Smith, 9 N.Y. 502;Merchants' Bank v. Thomson, 55 N.Y. 7; EmigrantIndustrial Savings Bank v. Goldman, 75 N.Y. 127; Goebel v.Iffla, supra; Nelson v. Brown, 144 N.Y. 384; Anderson v.McNeely, 120 App. Div. 676; Fern v. Osterhout, 11 App. Div. 319;Barker v. Burton, 67 Barb. 458.)

Applying the rule stated to this case, it does not appear from the record that there was anything in the complaint to show the defendants that the plaintiff disputed or sought to bar their prior and superior easement of light, air and access over the property which it sought to sell in the action.

As the question of the defendants' having prior and superior easements to the tax lien was not tendered as an issue in the foreclosure action, the defendants are not bound by the judgment therein.

The easements over the real property bid off by the appellant at the foreclosure sale materially affected its value and he was not tendered a title to such real property that he was bound to accept.

The order of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in both courts.

WILLARD BARTLETT, Ch. J., WERNER, HISCOCK, HOGAN, MILLER and CARDOZO, JJ., concur.

Order reversed, etc.