Case ID: nys_35/html/0732-01.html
Source: Caselaw Access Project
Author: {"author": "WARD, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HARRIS v. GRAHAM.
    (Supreme Court, General Term, Fifth Department.
    October 16, 1895.)
    1. Removing Cloud from Title—Judgment Paid but not Discharged.
    One who purchases lands subject to all taxes, assessments, and other Incumbrances is entitled to have a judgment, apparently a lien, which has been paid, but not discharged of record, canceled as a cloud on the title, though his deed contains no covenant to pay it as part of the consideration.
    2. Same—Parties.
    In an action to cancel an apparent lien on real property, the owner of the land affected and the owner of the lien are the only necessary parties.
    Appeal from special term, Wayne county.
    Action by Emily L. Harris against Archibald M. Graham to cancel a judgment for the deficiency on the foreclosure of the mortgage on plaintiff’s premises as a cloud on her title. There was a judgment in favor of plaintiff, and defendant appeals. Modified.
    Argued before LEWIS, BRADLEY, and WARD, JJ.
    Charles T. Saxton, for appellant.
    E. W. Hamm, for respondént.
   WARD, J.

On the 8th of January, 1887, the defendant recovered a judgment of foreclosure and sale against Hiram W. Bradshaw and Mary, his wife, and another, in the Wayne county court. The judgment was for $2,374.76, and it was adjudged that Hiram W. Bradshaw should pay any deficiency that might arise upon the sale. The mortgaged premises were duly sold by a referee in March, 1888, and were purchased by defendant at the sale for $1,400. The referee certified a deficiency of $903.23 on the 2d day of April, 1888, and on June 27th judgment was entered in the Wayne county clerk’s office, the referee’s report having been confirmed for such deficiency and interest. On February 20, 1890, Hiram W. Bradshaw died intestate, and his wife and William W. Gatchell were appointed his administrators. In March, 1891, the administrators commenced a proceeding to sell the real estate of the intestate for the payment of his debts. A decree for the sale of the premises was made by the surrogate of Wayne county (he having jurisdiction), and in pursuance thereof certain real property of Hiram W. Bradshaw, on the 23d day of January, 1892, was sold at public auction, and bid off by Albert Harris, the husband of the plaintiff, but for her, for $310. These premises were subject to the apparent lien of the deficiency judgment, A deed was afterwards executed by the administrators conveying the premises sold to the plaintiff. At the time of the sale the terms thereof were in writing, signed by one of the administrators, and presented to the bidders before sale, and those terms provided that the premises would be sold subject to all taxes, assessments, and other incumbrances which at the time of the sale were liens or incumbrances upon the said premises. A similar statement was contained in the deed to the plaintiff, but there was no covenant in the •deed binding the plaintiff to pay such incumbrances or taxes. E. L. Harris, the plaintiff’s husband, upon the purchase signed a writing agreeing to comply with the terms and conditions of the sale. The plaintiff claimed that at the time of the foreclosure sale an arrangement was made between Bradshaw, the defendant, and one Jacob Barclay, who had come to bid on the premises, that the defendant should bid them off, and deed them to Barclay for $2,800; and whatever there was over and above defendant’s claim in the foreclosure judgment and costs Bradshaw should have the benefit of. After the sale, and before the confirmation of the referee’s report, and the entry of the judgment for deficiency, Barclay paid the defendant $2,800,—$1,000 down, and the balance on the 9th of April, 1888,—and received a quitclaim deed of the premises covered by the foreclosure judgment from the defendant on that day. The plaintiff, after her purchase under the administrators’ sale, went into possession of the premises covered by her deed, and demanded of the defendant the cancellation of the deficiency judgment, and that it be removed as a cloud upon her title, which was refused, whereupon this action was commenced; and the court, upon the trial, found in favor of the ■plaintiff, and directed judgment that the deficiency judgment be canceled of record as a cloud upon the plaintiff’s title, and that defendant execute and deliver a proper satisfaction of such judgment. The court found the facts substantially as above stated, and also found that the said deficiency judgment was paid in full before it was entered.

The eighth finding of fact was as follows:

“That, just before the sale by the referee, Jacob Barclay (this defendant) and Hiram W. Bradshaw made an agreement by which Barclay was to purchase the mortgaged premises for $2,800, and that the property should be put up at sale by the referee, and struck off to this defendant for a nominal price,, and then he should give said Barclay a deed of the same.”

The defendant claims error in this judgment for the following-reasons: First. There was no such agreement as contained in the eighth finding of fact, but the preponderance of evidence before the special term was that no such agreement was made; that the defendant purchased the premises, and afterwards sold them to Barclay, still retaining his deficiency judgment. Second. That Harris was informed at the administrators’ sale of the deficiency judgment, and that it was a lien upon the premises sold, and was a part of the consideration, of the sale to be paid by Harris. Third. That the proper parties were not before the court, as, according to the plaintiff’s claim, the sale was for the benefit of Bradshaw, and his personal representatives should have been made parties to the action, and the complete determination of the controversy could not be had without their being made such parties.

The pivotal question in the case is whether there was a contract between Barclay, the defendant, and Bradshaw, as claimed by the plaintiff and found by the court. A careful examination of the evidence in the case would seem to sustain the finding of the trial court upon this question. Three witnesses testified upon the subject,—Barclay, the defendant, and his attorney, Van Denburg. Barclay swears unequivocally to the contract as claimed by the plaintiff. The defendant and Van Denburg both admit in their testimony that Barclay and Bradshaw were both present at the sale; that Barclay said that he would not bid at the sale, but that the defendant could bid off the property, and he (Barclay) would take the title to the premises from the defendant; that before the sale the defendant and Barclay had a conversation, and entered into an agreement that Barclay should pay $2,800 for the premises, and that the defendant should deed them to Mm. No evidence was given showing- that the amount of the deficiency judgment was to remain, but, the amount paid being in excess three or four hundred dollars of the entire claim of the defendant in the foreclosure judgment, the inference seems irresistible from the testimony of these witnesses that Barclay took title from the defendant discharged of the said foreclosure judgment and all interest and costs. It was the duty of the defendant, if he intended, when he sold this property to Barclay, to reserve the right to enforce a deficiency judgment against it of nearly $1,000, to have so notified Barclay; and his failure to do so sustains the contention of the plaintiff as to what the real transaction was.

In regard to the second objection urged by the defendant, it is sufficient to say that it cannot be maintained for the reason that Harris in no manner assumed to pay the said deficiency judgment, or any portion thereof, as a part of the consideration of the purchase. The agreements specified in the deed of the plaintiff that she took the premises subject to all liens and incumbrances simply meant such liens and incumbrances as were valid and could be enforced. This deficiency judgment should not have been entered. It was in fraud of the rights of Barclay. The deficiency on which the judgment was based had been paid before the judgment was entered. As the judgment was paid, it could not be enforced at law or in equity, but it was an apparent incumbrance upon the plaintiff’s property, and she could directly attack it as such, and none of the rights of the Bradshaw estate could be possibly affected by the judgment removing such cloud from her title. But, assuming it to have been a valid incumbrance, the plaintiff simply taking her deed subject to it did not create an obligation on her part to pay it. In order to bind her so to do, there must have been a covenant or obligation contained in her deed that she should pay it; and then, if she accepted the deed, she would be bound to do so. Belmont v. Coman, 22 N. Y. 438; Society v. Bostwick, 100 N. Y. 628, 3 N. E. 296; Smith v. Truslow, 84 N. Y. 660.

Several witnesses on behalf of the defendant testified that when the terms of sale were read the question arose as to what these incumbrances were, and that the defendant’s deficiency judgment was mentioned as one of them. Some of these witnesses are not clear whether this statement was made in the hearing of Harris. Harris denies that he heard anything of this kind, and the case does not contain any proof that Harris agreed, verbally or in writing, to pay the deficiency judgment as a part of the purchase price of the property. Some evidence was given to the effect that Harris had learned of this deficiency judgment before or at the time of the administrators’ sale, but the plaintiff gave evidence tending to show that Harris and others connected with the sale claimed that the judgment had been paid, or could not be enforced. The special term finds that the terms of the sale were in writing, and there was evidence to sustain that finding, and it will not be questioned here. The conclusions of the special term upon the facts seem to be fairly sustained by the evidence, and are conclusive upon this appeal.

As to the third contention, as to there not being the proper parties, the answer does not set up any defect of parties, nor did the special term reach the conclusion that it was necessary to bring in other parties before a complete determination of the matters in controversy in this action could be had, nor can we see that such action was necessary. The owner of the land upon which the deficiency judgment was an apparent lien and the owner of such judgment are parties to the action, which would seem to be all that is necessary for the purpose of the action, which is simply to remove the cloud of the defendant’s judgment from the plaintiff’s land. But the defendant also contends that the effect of this judgment is to deprive the Bradshaw estate of the benefit of the alleged agreement testified to by Barclay, and transfer the same to the plaintiff. This could only relate to what remained of the $2,800 paid by Barclay to the defendant over and above the amount of the defendant’s costs, interest, etc. That amount is in the defendant’s hands, and, if it belongs to the estate of Bradshaw, the defendant holds it as trustee of the Bradshaw estate, and may be liable to account as such to that estate. Be that as it may, the question does not concern us here, nor is it necessary to determine that question in this action. But the judgment should be modified so as to make it effectual to remove the cloud of the deficiency judgment from the plaintiff’s land, and so as to satisfy it as against her, and, as so modified, affirmed, with costs to the plaintiff. All concur.