Case ID: nys_16/html/0465-01.html
Source: Caselaw Access Project
Author: {"author": "Ingraham, J. \n      Daniels, J., Van Brunt, P. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In re Howe et al. In re Clapp’s Estate.
    
      (Supreme Court, General Term, First Department.
    
    November 30, 1891.)
    1. Executors—Leave to Sue—Effect of Judgment for Deficiency.
    On an application by executors of a mortgagee for leave to sue on a bond secured by mortgage, unsatisfied because of prior mortgages on the same property, it appeared that, in an action to foreclose such mortgage brought before the death of the mortgagee, defendant’s answer, alleging the defense of usury, was stricken out as sham, and a judgment of foreclosure entered, and defendant adjudged to pay any deficiency on the bond. Held conclusive on defendant as to the right of the executors to sue, notwithstanding the fact that defendant’s allegation that the answer was stricken out as sham, in pursuance of an agreement between defendant and plaintiff’s attorney (now executor and applicant for leave to sue) that no personal judgment should be entered against defendant, remains uncontradicted in the present proceeding. Van Brunt, P. J., dissenting.
    2. Same—Laches—Statute of Limitations.
    Executors cannot be held guilty of loches in making application for leave to sue on a bond, where such application is made within the time within which, under the statute of limitations, an action might be maintained on the bond.
    Appeal from special term, New York county. Reversed.
    Application by Joseph W. Howe and Clarence F. Moulton, executors of the will of George P. Clapp, deceased, for leave under Code Civil Proc. § 1628, to sue Benjamin I. H. Trask on a mortgage bond. From an order denying the application, the executors appeal.
    Argued before Van Brunt, P. J., and Daniels and Ingraham, JJ.
    
      Gerrit Smith, for appellants. Donohue, Newcombe & Cardozo, for respondent
   Ingraham, J.

The respondent admits having executed the bond upon which the appellants ask leave of the court to sue, and it appears that, in an action to foreclose a mortgage given to secure the payment of the bond, the respondent appeared and interposed an answer, alleging the defense of usury, and that subsequently such answer was stricken out as sham, and a judgment of foreclosure and sale entered, whereupon the respondent was adjudged to pay any deficiency to plaintiff. This judgment is a conclusive adjudication that defendant had no defense to the action, and was indebted to plaintiff’s testator in the amount of the bond. As the property covered by the mortgage was subsequently sold to satisfy a prior lien, nothing was realized in the foreclosure suit, and, as the statute of limitations had not run against the bond, the mere delay in making the application is not a reason for denying the motion. There is no rule that requires that this application should be made at any particular time, and, by denying it on the ground of loches in making the motion, the court, in effect, establishes a different time within which an action upon a bond must be brought than that established by law. The allegation that some arrangement was made whereby the obligor and his co-obligor would be released from any personal obligation upon the bond is conclusively established to be without foundation by the judgment subsequently entered in the foreclosure action. He was represented by his attorney in that action, and interposed an answer. He did not allege therein the making of the agreement now brought forward as a reason for denying this application, and the effect of the order appealed from is to reverse the adjudication of this court as to the liability of the defendant upon the mere statement of the respondent, on this application, that, in consequence of an agreement made before the entry of the judgment against him, he was not to be personally responsible. Upon the bond and judgment itself the petitioner is entitled to recover, and no reason is shown why they should not be allowed to commence the action. The order appealed from should be reversed, with $10 costs and disbursements, and motion granted.

Daniels, J.,

(concurring.) Whether a defense exists to the debts mentioned in the bonds can regularly be only determined on a trial, when the evidence will be directly produced before the court; and to place the demands in the condition in which the trial can be had, the order permitting the bonds to be sued becomes necessary. To prevent the order, the proof should be satisfactory that the bonds have been discharged or satisfied. That degree of proof is in this instance wanting; and leave to sue the bonds should be given. I therefore agree with the opinion of Mr. Justice Ingraham for a reversal of the order.

Van Brunt, P. J.,

(dissenting.) In June, 1873, one Trask and wife executed and delivered to one Clapp their two joint and several bonds, for $2,500 each, secured by two second mortgages on two adjoining lots of land in Hew York city. In May, 1876, the mortgagors caused to be conveyed to the mortgagee Certain property on Duane street, Hew York city, as claimed by the appellants, in part payment of said bonds, and credit was given therefor on said bonds, leaving a balance due. In Hovember, 1877, two actions were begun by the mortgagee against Trask and wife to foreclose the mortgages for the balance alleged to be due on the bonds, in each of which actions a defense of usury was interposed by the wife of Trask. A motion was made to strike out such answers as sham, and, upon the consent of the attorney for Mrs. Trask, an order was entered striking them out, and subsequently decrees of foreclosure were entered on the 6th of September, 1877. A few days prior to the entry of the decrees in these actions, (viz., on September 3,1877,) judgments of foreclosure and sale were entered in actions brought upon the first mortgages, and upon the sale of the premises a deficiency resulted upon said last-named mortgages. Ho sale was had under the decree of September 6, 1877. The mortgagee died on September 17, 1881, leaving her husband sole executor and legatee under her will; and he died in 1884, leaving a last will and testament, of which the applicants, Joseph W. Howe and Clarence Moulton, are executors. Ho other payments having been made upon said bonds, this application, under section 1628 of the Code, was made for leave to bring suit thereon. This application being denied,.from the order thereupon entered this appeal is taken. The learned court below seems to have denied this motion upon the ground of loches, nearly 17 years having elapsed since the making of the,bonds. But it is doubtful whether any lapse of time short of the statute of limitations, unless there were other considerations, would be an answer to the right to sue. But there is one difficulty presented upon the face of these papers which seems to justify the denial of the application. It seems that the executor Moulton was acting as the attorney in fact of the mortgagee in connection with all these transactions; and it is alleged upon the part of the respondent Trask that the answers in the foreclosure suits were allowed to be stricken out under and in pursuance of an agreement between himself and Moulton that no personal judgment would be enforced either against himself or his wife. And it is to be observed that Moulton verified the complaint in these foreclosure actions as the attorney of the plaintiff, who was absent from the city of Hew York. Moulton has made no affidavit or denial of these allegations. It seems to us, therefore, that the making of such an agreement is established; and it certainly would be inequitable to allow an action to be brought upon these bonds after the making of such an agreement by the representative and attorney of the plaintiff in those actions, who had the sole charge and management of her affairs in this respect. The order should be affirmed, with $10 costs and disbursements.