Case ID: ad_32/html/0168-01.html
Source: Caselaw Access Project
Author: {"author": "Putnam, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George Wait, Respondent, v. Dorr Getman and Della Getman, his Wife, Apppellants, Impleaded with Simon Posner.
    
      Party —a mortgagee, whose claim is also secured by. a second mortgage given to a third party, is a necessary party to a foreclosure thereof— a demurrable ansioer is not necessarily f rivolous. '
    
    In an action brought to foreclose a mortgage, given to the vendor of the mortgaged property to secure the payment by the vendee of a portion of a prior mortgage existing thereon at the time of such sale, the holder of said last-mentioned mortgage is a proper and necessary party defendant, and the vendee is entitled to have the amount realized upon the sale of the'mprtgaged premises applied in payment of the mortgage held by such third party.
    
      ■Semble, that an answer which is insufficient, so that a demurrer thereto will be sustained, is not necessarily frivolous. . •
    
      Appeal by the defendants, Dorr Getman and Della Getman, his wife, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the cleric of the county of Otsego on the 5th day of January, 1898, with notice of an intention to bring up for review upon such appeal an order made at the Broome Special Term, and entered in the office of the.clerk of the county of Otsego on the 5th day of January, 1898, overruling the answer of said defendants as frivolous.
    On the 6th day of February, 1896, the plaintiff, being the owner of a farm, theretofore conveyed to him by one Ira Wright and wife, sold a portion thereof to the defendant Dorr Getman for the consideration of $2,500, the deed containing the following covenant in regard to the payment of such consideration : “ Four hundred dollars of the above-mentioned purchase price is to be paid down by second party to first party, upon delivery of this deed. The balance of said purchase price is made up as follows, viz.: This deed is given subject to a certain mortgage of $2500 now held and owned by Jas. J. Byard, which mortgage covers the whole of the premises conveyed to first party by Ira Wright and wife as aforesaid. It is hereby understood and' agreed that second party hereto is to and does hereby expressly assume the payment of said mortgage to the amount of $2,100 in full as a part of the consideration of this deed and to no greater amt., and that the same is to be made a charge and lien primarily upon the lands hereby conveyed to second party to said amount of $2100.00, and that in case of foreclosure of said mortgage should at any time be had that the lands hereby conveyed shall be first sold to satisfy said mortgage.”
    On the same day the said grantee executed to the plaintiff a mortgage on the premises thus conveyed to him (a copy of which is contained in the points of the learned counsel for the respondent) containing the following condition:
    
      “ This grant is intended as a security for the payment of the sum of $2,100.00, according to the conditions of a deed this day given from said Wait to said Getman; this mortgage is intended as a. security only for the performance of' the agreements made by said Getman in said deed, to pay off and assume the, payment to the . extent of $2,100 of a mortgage on said premises held by James J. Byard — upon compliance with said agreement by said Getman and the payment of said $2,100 upon said mortgage,, then this mortgage-is to become null and void and of no effect — this mortgage is to-be without interest until default in paying interest or principal by said Getman upon the Byard mortgage. This is a purchase-money mortgage ; and this conveyance shall be void if such payment be anadeas herein specified. And in case default shall be made in the payment of the principal sum hereby intended to be secured, or in the-payment of the interest thereof,.-Or any part of such principal or interest, as above provided, it shall be lawful for the party of the-second part, executors, administrators or assigns, at any time thereafter, to sell the premises hereby granted,, or any part thereof, in the-manner prescribed by law, and out of all the, moneys arising from such sale to retain the amount then due for principal and interest, together with the costs and charges of making such sale, and the overplus, if any there be, shall be paid by the party making such sale,, on demand,, to the said Dorr Getman, heirs or assigns.”
    This action was-brought to foreclose said mortgage. The defendants Dorr Getman and Della Getman, his wife, answered, admitting; the" due execution of said mortgage; that no payments had been made by the said Dorr Getman upon the Byard mortgage;, that said Byard mortgage was due prior to the commencement of this, action...' '
    But the defendants averred that the mortgage in suit was given as a mere indemnity to the plaintiff against loss on account of the-said Byard mortgage.;..that as the.land had not been sold urider that mortgage, as: there had been no attempt to collect it, and no demand for the payment thereof made by the plaintiff, no right of action had accrued in; favor of the plaintiff on the mortgage set out in the complaint. (See ¡Sicmson v. WatJeins, 86 1ST. T. 597, 600, 601.) , For a further and separate .answer, the defendants averred that the-said James J. Byard was a proper and necessary party to the- action,, and that a complete determination of the action brought upon the-mortgage mentioned in the complaint could not be had without the joinder of said Byard as a party defendant.
    The plaintiff, claiming that the answer was frivolous, applied at a Special Term of this court for judgment thereon under the provisions of section 537 of the Code of Civil Procedure. An order was made .granting his motion, and thereafter, in pursuance of said order, judgment was entered in the action in favor of the plaintiff for the relief demanded in the complaint. The defendants appealed from said judgment, stating in their notice of appeal that they intended to bring up for review upon said appeal the order overruling the answer as frivolous.
    
      Louis E. Walrath and Albert 0. Tennant, for the appellants.
    
      Lynn J. Arnold, for the respondent.
    
      
      Sic.
    
   Putnam, J.:

We are unable to regard the answer served by the defendant in this action as frivolous. The fact that an answer is insufficient so that a demurrer thereto will be sustained, does not necessarily determine that it is frivolous. “ That only may be regarded as frivolous which is made to appear so incohtrovertibly by a baré statement of it and without argument. If an argument is required to show that the pleading is bad, it is not frivolous.” (Youngs v. Kent, 46 N. Y. 672, 674; German Exchange Bank v. Kroder, 13 Misc. Rep. 192 ; Cook v. Warren, 88 N. Y. 37.)

In this case the. answer, even if deemed insufficient, is not so clearly bad as to show that it was interposed in bad faith. It certainly requires an argument to establish its insufficiency. Even if we should conclude that had the plaintiff interposed a demurrer to the answer it would have been sustained, we think the insufficiency of the pleadings is not so clearly apparent that a judgment under the provisions of section 537 of the Code of Civil Procedure could properly be directed in favor of the plaintiff.

But we are of opinion that the defense set out in the answer, that James J. Byard was a proper and necessary party defendant, was a valid one. The defendant Dorr Getman, by his assumption of the payment of the mortgage held by James J. Byard in the deed executed to him by the plaintiff,' became as to said mortgage as between him and the plaintiff the principal debtor, and the liability of the plaintiff thereon was that of a surety. (Fleischhauer v. Guggenheimer, 15 Wkly. Dig. 164; Marshall v. Davies, 78 N. Y. 414, 421; Wales v. Sherwood, 52 How. Pr. 413.)

On the execution and delivery of the deed from the plaintiff to Dorr Getman, the latter being liable to the mortgagee Byard as the principal debtor, Byard on the foreclosure of his mortgage, in case of a deficiency, could enforce payment thereof from the said defendant in the same manner as if he had executed a bond for the portion of the said mortgage debt by him assumed. The plaintiff, however, remained liable on said mortgage as a surety. It was to protect his interest as a surety that the mortgage set out in-the complaint was executed. By its express terms it was given “ as a security for the payment of the sum of $2,100.00 according to the conditions of a deed this day given from said Wait to said Getman; the mortgage is intended as a security only for the performance of the agreements' made by said Getman in said deed to pay off and assume the payment to the extent of $2,100 of a mortgage on said premises held by James J. Byard.” It was thus given, not to secure the payment to the plaintiff of the sum of $2,100, but to secure the performance of the defendant’s covenant in the deed to pay Byard that sum.

This action, therefore, must be deemed one to enforce the covenant of the defendant to pay Byard $2,100. It is evident that in ■such an action Byard should be made a party. The defendant Dorr Getman is clearly entitled to have the amount collected by the plaintiff on the mortgage in suit applied on the Byard mortgage, the payment of which it was given to secure. Such application ■cannot be enforced, however, unless Byard is a party to the action.

Byard should also be made a party so that the mortgaged premises can be sold free from the lien of his mortgage. If the premises shall be sold under the judgment as entered in this action such -a sale would leave the Byard mortgage outstanding. Under such -circumstances, a fair price for the property could not be realized on ■a sale. The defendants would probably be divested of their land for an inconsiderable sum.

By the judgment, as entered in the action, the sheriff is directed to sell the mortgaged premises, and after paying the expenses of ■sale, taxes and assessments, and the costs of the action, to pay to the plaintiff the amount found due by the referee’s report ($2,214.66) •and interest, and the surplus, if any, to the county treasurer of ■Otsego county, subject to the future order of this court. No provision is contained in the judgment that the money realized on a. sale of the property under the mortgage in suit, or any part thereof, shall be applied on the Byard mortgage. There is no provision in the judgment relating to such mortgage. We see no reason why, under the provisions of the judgment, the plaintiff might not retain for his own use the amount received by him from the sheriff on the sale of" the mortgaged premises, leaving the Byard mortgage outstanding, in full force, and in case of its foreclosure, leaving defendant liable for a deficiency on a sale of the mortgaged premises thereunder.

The mortgage on which the plaintiff seeks to maintain this action, being given to secure the payment by defendant of the mortgage held by J ames J. Byard, and this action being brought to enforce such payment, we think that Byard is a necessary party to the action, and hence that the answer of the defendants in that regard was not insufficient.

Without considering other points discussed by counsel, we reach the conclusion that the judgment and order should be reversed, with costs to the appellant, and the motion for judgment denied, with costs.

All concurred.

Judgment and order reversed, witli costs to appellant, and motion for judgment denied, with ten dollars costs and disbursements.