Supreme Court, Appellate Division, Second Department, New York.

GREENPOINT SAVINGS BANK, Appellant-Respondent,
v.
Virginia GUILIANO, a/k/a, Virginia Catalano, et al., Respondents--Appellants,
et al., Defendants.


April 21, 1997.


 Bank brought action to foreclose mortgage on property.   Mortgagor moved to 
dismiss complaint.   The Supreme Court, Suffolk County, D'Emilio, J., dismissed 
complaint in part and determined that mortgage encumbered one-half interest in 
property.   Both parties appealed.   The Supreme Court, Appellate Division, held 
that: (1) mortgage encumbered one-half interest in property which mortgagor 
acquired from corporation and which corporation acquired by sheriff's deed, and 
(2) bank was not bona fide mortgagee.

 Affirmed.


West Headnotes

[1] Mortgages  136.1
266k136.1 Most Cited Cases

Bank's mortgage encumbered one-half interest in property which mortgagor 
acquired from corporation and which corporation had acquired by sheriff's deed, 
despite prior court decision voiding deed from corporation to mortgagor as it 
devolved from prior owner's wrongful transfer, as decision did not affect 
separate interest in property that corporation acquired by sheriff's deed and 
transferred to mortgagor.

[2] Mortgages  153
266k153 Most Cited Cases

Bank was not "bona fide mortgagee," where deeds from prior owner to corporation 
and from corporation to mortgagor, insofar as it purported to transfer prior 
owner's interest, were void, not voidable, due to prior owner's wrongful 
transfer. 
 **646 Kirschenbaum & Kirschenbaum, P.C., Garden City, (Samuel Kirschenbaum and 
Bernadette M. Arnold, of counsel), for appellant- respondent.

 E. Michael Rosenstock, P.C., Rockville Centre, for respondent-appellant 
Virginia Guiliano, a/k/a Virginia Catalano.

 Del Rosso & Chisena, Garden City, (Ronald J. Chisena, of counsel), for 
respondents-appellants Isabella Catalano and Frederick Catalano.


 Before PIZZUTO, J.P., and SANTUCCI, JOY and FLORIO, JJ.



 MEMORANDUM BY THE COURT.

 *472 In a mortgage foreclosure action, the plaintiff appeals from (1) an order 
of the Supreme Court, Suffolk County (D'Emilio, J.), dated September 1, 1995, 
which, inter alia, granted the cross motion of the defendants Frederick and 
Isabella Catalano to dismiss the complaint, and (2) as limited by its brief, 
from so much of an order of the same court, dated February 21, 1996, as, upon 
reargument, vacated that portion of the order dated September 1, 1995, granting 
the cross motion to dismiss the complaint in its entirety, and substituted 
therefor a provision dismissing the complaint insofar as asserted against the 
defendants Frederick Catalano and Isabella Catalano upon a finding that the 
plaintiff's mortgage encumbered only the one-half interest of the defendant 
Virginia Guiliano in the subject property which was **647 acquired by Sheriff's 
deed, and the defendant Virginia Guiliano, a/k/a Virginia Catalano, and the 
defendants Isabella and Frederick Catalano separately cross- appeal from the 
order dated February 21, 1996, which granted reargument and upon reargument 
vacated so much of the order dated February 21, 1996, as dismissed the complaint 
*473 in its entirety, and amended the order dated September 1, 1995, to include 
a provision that the plaintiff's mortgage encumbered only the one-half interest 
of the defendant Virginia Guiliano in the subject property which was acquired by 
Sheriff's deed.

 ORDERED that the appeal from the order dated September 1, 1995, is dismissed, 
without costs or disbursements, as that order was superseded by the order dated 
February 21, 1996, made upon reargument;  and it is further,

 ORDERED that the order dated February 21, 1996, is affirmed, without costs or 
disbursements.

 This appeal involves a continuing fight over the former marital home of 
Frederick and Isabella Catalano.   In 1987 Isabella Catalano commenced an action 
against Frederick Catalano and Virginia Guiliano, a/k/a Virginia Catalano, the 
second, and now former, wife of Frederick, as well as against Isabella's divorce 
attorney.   By decision and order in that action dated February 20, 1990, this 
court held that a deed purporting to transfer Frederick's interest in the former 
marital residence to Hilary House Properties (hereinafter Hilary House), a 
corporation wholly owned by Virginia, was null and void, as was a subsequent 
deed from Hilary House to Virginia, since Frederick's transfer violated a 
restraining order entered in the matrimonial action (see, Catalano v. Catalano, 
158 A.D.2d 570, 551 N.Y.S.2d 539).   By decision and order dated October 7, 
1991, this court ordered the Suffolk County Clerk to cancel of record the deeds 
from Frederick to Hilary House and from Hilary House to Virginia (see, Catalano 
v. Catalano, 176 A.D.2d 278, 574 N.Y.S.2d 520).

 [1][2] In the instant action, the plaintiff Greenpoint Savings Bank  
(hereinafter Greenpoint) seeks to foreclose on a mortgage on the former marital 
home which was executed by Virginia to it in December 1986.   The Supreme Court 
initially dismissed the complaint and declared Greenpoint's mortgage a nullity, 
based upon the previously-cited decisions and ordersof this court in the action.   
Thereafter, the Supreme Court granted Greenpoint's motion for reargument, and 
upon reargument determined that Greenpoint's mortgage did encumber a one-half 
interest in the property which Virginia acquired from Hilary House and which 
Hilary House had acquired by Sheriff's deed.   We agree.  Our prior decisions 
voided the deed from Hilary House to Virginia only insofar as it devolved from 
Frederick's wrongful transfer, but did not affect the separate interest in the 
property that Hilary House acquired by Sheriff's deed and transferred to 
Virginia.   Additionally, Greenpoint is not a bona fide mortgagee because the 
deeds from Frederick to Hilary *474 House and from Hilary House to Virginia 
insofar as it purported to transfer Frederick's interest, were void, not 
voidable (see, Catalano v. Catalano, 158 A.D.2d 570, 551 N.Y.S.2d 539, supra;  
see also, 43A N.Y. Jur 2d, Deeds, §  203).

 We have reviewed the parties' remaining contentions and find them to be without 
merit.

656 N.Y.S.2d 646, 238 A.D.2d 472

END OF DOCUMENT