Summary
In Gabriel v 351 St. Nicholas Equities, Inc. (168 AD2d 338 [IstDept 1990]), the Appellate Division ruled that this statute applied to a mortgage foreclosure where the entire debt had been accelerated, and that the only way the trial court could have allowed the defendant to avoid the entry of ajudgment of foreclosure and sale, or the ultimate sale of the property, would have been for defendants to have complied with RPAPL § 1341.
Summary of this case from Korakis v. Carlton Boiler Repair, Inc.Opinion
December 18, 1990
Appeal from the Supreme Court, New York County (Elliott Wilk, J.).
This appeal concerns a foreclosure action instituted to foreclose upon the mortgage held by plaintiffs on the subject property located at 351 St. Nicholas Avenue, in New York County. A default judgment of foreclosure on the subject property was vacated by order entered July 7, 1988; this vacatur was premised on the express condition that defendants pay arrears of $6,750 to plaintiffs, that amount representing enumerated mortgage arrears. No payment was made in a timely fashion.
Plaintiffs subsequently filed the instant order to show cause seeking, inter alia, the entry of a second judgment of foreclosure and sale because defendants failed to tender the sum due under Supreme Court's vacatur order. Two days before the second adjourned return date upon this motion, defendants' attorney purported to tender payments totaling $11,000, which were allegedly the accrued mortgage arrearages through May 31, 1989. Plaintiffs rejected this tender as insufficient, claiming that defendants must pay the entire balance due on the mortgage, as well as the costs of the foreclosure and sale. Supreme Court denied plaintiffs' motion, finding that defendants met the conditions expressed in the vacatur order, and, sub silentio, finding that plaintiffs were not entitled to reject the purported tender.
We disagree. Under the express acceleration provisions of the mortgage, plaintiffs were within their rights to demand the entire unpaid principal due under the mortgage and initiate a foreclosure action. Moreover, under RPAPL 1341, once plaintiffs chose to accelerate the mortgage, defendant could no longer redeem the mortgage by merely tendering the installments defaulted upon plus interest. (National Bank v. Cohen, 89 A.D.2d 725, 726 [3d Dept 1982].)
Furthermore, the record is devoid of any facts lending support to the proposition that plaintiffs are estopped from exercising their right to foreclosure on the mortgage; indeed the opposite appears to be true given the rather untoward tactic of tendering payment at the eleventh hour, after a subsequent motion had been made, rather than promptly after the vacatur order was entered. (National Bank v. Cohen, supra; cf., Pessin v. Baumann, 130 A.D.2d 354 [1st Dept 1987].) Finally, as this court has previously held in the Pessin case, the governing statute, RPAPL 1341, is mandatory in nature, and does not allow for a discretionary interpretation or application. (Pessin v. Baumann, 130 A.D.2d, supra, at 355.) Therefore, once plaintiffs had unequivocally exercised their right to accelerate the unpaid principal balance due under the mortgage and initiated a foreclosure action, the only way in which the trial court could have allowed 351 St. Nicholas Equities to avoid the entry of a judgment of foreclosure and sale, or the ultimate sale of the property, would have been for defendants to have complied with RPAPL 1341. Since that is not the factual scenario in the case at bar, we reverse, and grant plaintiffs' motion.
Concur — Kupferman, J.P., Ross, Carro, Asch and Ellerin, JJ.