Becker v. New Penn Development Corp.

Per Curiam.

We are all agreed that defendant’s rights under its absolute assignment from Atwater were prior to those of plaintiff under his mortgage on part of the leasehold, since defendant took its assignment without notice of said mortgage, which was never properly recorded. Inasmuch as defendant paid Atwater the full consideration of $5,000 for said absolute assignment, its rights as a bona fide purchaser for value and without notice were fully crystallized long before plaintiff’s notice of August 12, 1937. The additional one and one-half cents for each thousand cubic feet, if natural gas were produced and marketed, and which defendant was obligated to pay Atwater, arose out of a separate agreement between them involving their respective additional obligations relating to the development and operation of the. property following the assignment.

Actions in equity, such as Macauley v. Smith (132 N. Y. 524 [1892]), and Fish v. Potter (2 Keyes 64 [1865]), where plaintiff sought to reach his security through the property itself, are not apposite here. Under the circumstances disclosed by this record, plaintiff may not recover directly from defendant in this action at law, in which Atwater is not a party, upon his (plaintiff’s) mortgage, which defendant neither signed nor assumed (see People ex rel. Balbrook Realty Corp. v. Mills, 295 N. Y. 190, 194). Moreover, inasmuch as defendant’s production of gas here was in a well already opened in August, 1937, and was incidental to the utilization of the land in the manner in which it was expected to be used, waste in the legal sense may not be ascribed to defendant (5 Tiffany on Real Property, § 1428; 1 Reeves on Real Property, § 555, p. 781; 2 Thompson on Real Property, § 825).

The judgment should be affirmed, with costs.