On appeal from the Hudson County Court of Common Pleas.
For the plaintiff-respondent, Collins & Corbin (Edward A. Markley, James B. Emory and Nathan Baker, of counsel).
For the defendant-appellant, Townsend & Doyle (Mark Townsend and Thomas F. Doyle, of counsel).
Before Brogan, Chief Justice, and Justices Parker and Perskie.
The opinion of the court was delivered by
BROGAN, CHIEF JUSTICE. Plaintiff holds a judgment recovered for personal injuries suffered as a result of a fall caused by the neglectful maintenance of a common stairway in the house in which she lived. The facts and circumstances surrounding the accident, injuries and the extent thereof and whether there was negligence in the situation, are not in dispute. A more fundamental question is raised. The defendant, on this appeal from the judgment, argues that no relationship, from which liability could be imputed to it, existed between the plaintiff and it; that it owed no duty to the plaintiff and, consequently, could not as a matter of law be made to answer in damages.
The plaintiff was a month to month tenant of the third floor of a flat in the City of Hoboken, which premises had stood in the name of Louis Reiner, now deceased, and Jennie, his wife, who had mortgaged the premises to the defendant bank on April 25th, 1925. Subsequently the property was conveyed to a corporation owned by them called the Ell & Jay Realty Company. Interest on the mortgage and taxes on the premises being in default, and there being need of repairs, the said corporation entered into a agreement with the mortgagee assigning the rents due and to become due and conferring certain rights upon the mortgagee. Among the rights conferred was power or "entry and distress;" complete authority to collect rents and to sue for same, if unpaid, in the name of the corporate owner for the use of the mortgagee or in its own name as assignee; and to dispossess tenants for non-payment of rent. It further provided that the mortgagee might reduce the existing rents or "rent at reduced rentals" as agent of the owner. The agreement provided for the disposition of the income so collected as follows: "To pay the necessary running expenses of said premises, including necessary repairs and decorations, insurance premiums, water rents and commissions for renting of said premises, and for collecting the rents thereof the for alterations, repairs or improvements to said premises as herein provided; to pay to the mortgagee [defendant here] the interest due on the bond and mortgage and to pay the taxes." The mortgagee was empowered
to "make such repairs, alterations and improvements to the premises" as in its discretion might seem advantageous, the cost thereof to be paid by it in behalf of the owner; reimbursement to follow from the rents collected. Another clause in the agreement provided that the mortgagee "may appoint an agent for the collection of rents and the management of said premises, but such agent shall be the agent of the Ell & Jay Realty Company, Inc., but the rents collected by such agent shall be payable to the party of the second part [mortgagee], by virtue of this agreement;" and, again, that the mortgagee "may in its discretion made contracts for such alterations, repairs and such improvements to the premises as may be necessary, In its own name and shall in the first instance pay therefor." The owner then appointed the mortgagee its attorney for the purposes mentioned and to enable it "more efficiently to carry out its duties as assignee herein mentioned," &c. Thereafter a notice was sent to each tenant by the mortgagee bank, through its vice-president, stating that C. H. McQueen, Inc., has been appointed to act as agent to collect rents and directing that the tenant thereafter pay to that agent, or its representative, all rents due and owing; and to the McQueen agency this was written: "We enclose herewith an authorization for the collection of rents * * *," which letter also was signed by the vice-president of the mortgagee bank. Thereafter the plaintiff paid her rent to the appointed agent.
The appellant's main argument rests on the proposition that the court should have entered judgment of nonsuit because the mortgagee was agent of the owner and was not a mortgagee in possession or landlord in fact. If it was either mortgagee in possession or landlord it had the duty of maintaining the property as a prudent owner would. A mortgagee by taking possession assumes the position of owner. Dawson v. Drake, 30 N.J. Eq. 601, 603. A mortgagee in possession must keep the premises in necessary repair. Scherer v. Bang, 97 N.J. Eq. 497, 500.
The plaintiff offered proof of certain facts and circumstance tending to support a conclusion that defendant was a mortgagee in possession and argued that the defendant's
notice to the tenants directing that rents be paid to the named agent would indicate to the ordinary mind that such agent was the mortgagee's representative; that the letter to the McQueen agency likewise indicated that such agent was acting for the mortgagee; that the plaintiff herself at one time sought the position of janitress of the premises and that it was the mortgagee's representative, a bank ...