Case ID: ny-st-rep_14/html/0392-01.html
Source: Caselaw Access Project
Author: {"author": "Bartlett, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Magdalene Julien Resp’t, v. Wm. Lalor et al., App’lts.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed January 23, 1888.)
    
    Mortgage—Foreclosure or—When assignee or insolvent owns equity or redemption.
    The owner of certain land, subject to the mortgage in question, made a general assignment of all his property for the benefit of his creditors.. One L. became the sole substituted assignee under this assignment, and as such assignee he was made a defendant in the action to foreclose said mortgage. Before the foreclosure suit was begun, however, an order had been made by the court of common pleas in the matter of an accounting by the substituted assignee, in which there was a recital that the assignee had accounted for all of the property and the estate embraced in the said assignment, and it directed that the assignee, etc., “are hereby discharged of and from all liability for * * * said assigned estate, except as to an amount named, which he was directed to pay in a certain specified way, and the order finally provided that upon said payment being made, said “L. be discharged from all further liability in reference to said assign ment, and that his bond be cancelled.” ■ There was. no evidence that the mortgaged premises was included in the.subject matter of the accounting, and no evidence that the money had been distributed at, the lime the foreclosure suit was brought. Held, that the court was right in holding in the foreclosure suit that L. had not been divested by the said decree of the court of common pleas of the title to the premises upon which the mortgage was foreclosed, and was the owner of the equity of redemption.
    Appeal by purchaser from special term order denying motion to relieve him from purchase, and directing him to complete the same.
    
      
      George W. Stephens, for app’lt; W. W. Westervelt, for resp’t.
   Bartlett, J.

The appellant was a purchaser in foreclosure He objected to the title on the ground that the only person sued as the owner of the equity of redemption had no interest in the property. One John D. Phillips owned the premises in 1876, when he made a general assignment of all his property, real and personal, for the benefit of his creditors In 1880 Jesse W. Lilienthal became the sole substituted assignee under this assignment, and as such assignee, he was made a defendant in this action, on the theory that he was the owner of the equity of redemption.

Before the foreclosure suit was begun, however, an order had been made by the court of common pleas, in the matter of an accounting by the substituted assignee which is supposed by the appellant to have terminated Mr. Lilienthal’s ownership of the equity of redemption. An inspection of this order shews that-the accounting embraced not only the acts of Mr Lilienthal himself, but those of his predecessors in the trust There is a recital to the effect “that such assignees have accounted for all the property and the estate embraced in the said assignment. This, of course, would include the mortgaged premises in suit. Then the order proceeds to adjudge that the assignees and substituted assignee have duly accounted for all the property and estate of John D. Phillips conveyed by the assignment, and all the proceeds thereof which have come to their possession; and, furthermore, that the estates of the original assignees, “and the said Jesse W. Lilienthal, and their respective bondsmen, be, and they are hereby discharged of and from all liability for, upon, or by reason of any matter or thing contained in their said accounts, or in relation to or respect of said assigned estate; or the proceeds thereof,” except as to $7,151.91, a balance of moneys remaining in the hands of the substituted assignee. Out of this balance he was directed to make certain payments, and to pay a dividend to the creditors, and the order finally provided, “that upon said payment being made said Jesse Lilienthal be discharged from all further liability in reference to said assignment, and that his bond be canceled.”

The jurisdiction of the court on an accounting is “to discharge the assignee and his surety at any time upon performance of the decree from all further liability upon the matters included in the accounting, to creditors appearing and to creditors not having appeared, after due citation, or not having presented their claims after due advertisement.” Laws of 1877, chap. 466, § 20, sub. 5.

The order in question could have no greater effect than was authorized by this provision of the statute.

It will be observed that it is only upon performance of the decree that the discharge of the assignee is to become operative. Until he has fulfilled its requirements he is not discharged at all. So in the present case, the order of the court of common pleas could have no effect to relieve the substituted assignee from liability for the mortgaged premises, assuming this property to have been included in the subject matter of the accounting, until he actually distributed the balance of money in his hands as directed by that very decree. There is no evidence that he had done this at the time the foreclosure suit was brought, or that he has done it yet. On the contrary, he made an affidavit in opposition to the purchaser’s motion to be relieved from his purchase, in which he declares that he is still in possession of the unsold property and undistributed assets of the estate of John D. ¡Phillips, in his capacity as substituted assignee, and that he has not closed or completed the trust.

Under these circumstances, the court below was right in holding that he had been divested, by the decree of the court of common pleas, of the title to the premises upon which the mortgage was foreclosed. ¡N"o other question was discussed by counsel for the appellant upon the argument of the appeal, and, therefore, we have considered no other.

Our conclusion is that the order under review should be affirmed, with costs.

Daniels, J., concurs.