Case ID: ny-super-ct_34/html/0261-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Freedman, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JAMES McKEE, Plantiff and Appellant, v. JOHN MURPHY and JOHANNA, his wife, Defendants and Respondents.
    The assignee of a judgment, who has obtained an assignment that was intended and understood by him and Ms assignor to be given as a power of attorney, to collect the judgment in the name and for the benefit of the plaintiff and assignor, or for the purpose of enabling said assignee to collect the judgment for his assignor, has no vested rights or interest in the judgment other than that of agent or trustee of the plaintiff, his assignor.
    Although such assignee has sold real estate and obtained a sheriff’s deed thereof, he is not entitled to be made a party to an action for a foreclosure of a mortgage on said premises (as a judgment creditor or purchaser of the premises subsequent to the record of the mortgage).
    Nor can he maintain an action to redeem, &c., because he was not made a party to the foreclosure action. The plaintiff in, or assignor of the judgment is in eqMty the only party entitled to notice, or to be made a party to the foreclosure action, and if he was made a party thereto and foreclosed, his assignee, under these facts, was foreclosed also, and cannot maintain an action in equity to redeem from the foreclosure. He has no equities -in the premises for the consideration of the court.
    Before Monell, Freedman and Curtis, JJ.
    
      Decided March 30, 1872.
    This was an action to redeem from a foreclosure sale. On November 19, 1862, the defendant, John Murphy, became the purchaser, at a sale under foreclosure, of a mortgage made to him by one Philip H. Doremus, for six hundred and fifty dollars, of a lot on Eightieth - street, in the city of New York, one hundred and eighty-one feet six inches easterly of Bloomingdale Boad.
    The plaintiff claimed that on February 5, 1861, in the district court in the seventh judicial district, in the city of New York, one John Barton recovered a judgment against Doremus for forty-two dollars and seventy-three cents and filed a transcript thereof, and that, on November 26,1861, he, the plaintiff, purchased at an execution sale upon that judgment, all Doremus’ right, title and interest in the lot, for fifty dollars ; that the sheriff’s certificate of sale was filed on December 14, 1861, and that on February 26, 1863, he received the sheriff’s deed ; that he was not made a party to the foreclosure suit, and that in consequence he had a right to redeem from the sale.
    Upon the trial at special term evidence was given by both parties, and upon the evidence thus introduced, and the pleadings, the justice who tried the cause found the following conclusions of. fact and of law:
    1. That John Barton was joined as a party defendant to the foreclosure action, admitted by the pleadings, and appeared therein by attorney.
    2. That the said foreclosure action was commenced on or about August 9, 1862, proceeded to judgment and to a sale of the premises in question, and that upon such sale the defendant, John Murphy, became the purchaser, and the premises were conveyed to him, all as admitted by the pleadings.
    3. That about August 1, 1861, the said John Barton left the city of New York, at that time being the owner of the judgment recovered by him on February 5,1861, for forty-two and seventy-three cents, in the seventh judicial district court of the city of New York, against Philip H. Dor emus, and that shortly before he left he retained the plaintiff, who was then employed in the law office of John Townshend, who appears as his attorney in this action, as his agent and attorney for him, to collect that judgment. Just before he left, at the request of the plaintiff, and on his representation that it was necessary for him to have something to show to enable him (the plaintiff) in Barton’s absence to collect the judgment, Barton executed to the plaintiff an instrument dated July 26, 1861, in form assigning to the plaintiff the judgment, for the consideration of one dollar, and containing a power of attorney to the plaintiff to collect the same.
    4. Barton did not read the assignment. The plaintiff read a few lines, told him it was not necessary to read the whole ; and thereupon he (Barton) executed it under the belief induced by the plaintiff that it merely conferred upon the plaintiff an authority to collect the judgment.
    
      5. That there was no agreement that plaintiff should become the purchaser of the judgment; that he paid nothing for it; that Barton was ignorant that the paper contained an assignment in terms of the judgment, and that if plaintiff intended that it should assign the judgment he misled and deceived Barton to execute it, in ignorance that it was more than a power to authorize the plaintiff to collect the judgment, which was what it was understood between the parties it should be.
    6. That Barton remained the real owner of the judgment, and that, under his employment to collect the judgment, the plaintiff for Barton procured the execution to be issued upon it, the interest of Doremus in the premises to be sold under it to himself, the sheriff’s certificate to be delivered to him, and subsequently the sheriff’s deed to be delivered to him, all as admitted by the pleadings; and that in doing so he was the agent and attorney of Barton in respect to all proceedings for the .collection of the judgment including the above. He paid nothing on the sale.
    7. That Barton had the right to all beneficial interest in the premises under the sheriff’s sale and certificate to the plaintiff; and by the foreclosure action all such interest became foreclosed in favor of the defendant, John Murphy, who was the purchaser at the foreclosure sale.
    8. That the defendant, John Murphy, entered into possession under his foreclosure purchase of the premises in question, paid the taxes and assessments, and before January, 1869, built a house upon them, they haying greatly increased in value, all to the knowledge at the time of the plaintiff, who never notified the defendant Murphy of any claim till the commencement of this action.
    9. That on or about September 17, 1869, Barton assigned to the defendant Murphy his judgment with all its incidents.
    10. That there was no evidence that Barton had ever waived his election to treat as his the said purchase at the sheriff’s sale and sheriff’s certificate; and that until he should do so the plaintiff has no estate or interest entitling him to redeem.
    His claim is dependent on the will of Barton, who alone had any such right, and his right was cut off by the foreclosure.
    11. That the plaintiff was a native of Ireland and an alien by birth, and that there was no legal evidence that he had ever taken any proceedings permitting him to acquire and hold any title under the sheriff’s deed.
    12. That the plaintiff is not the real party in interest to redeem under the said judgment, sheriff’s sale, certificate and deed. That he never made any tender such as he alleges in the complaint or otherwise.
    13. That the defendants, John Murphy, and Johanna, his wife, are entitled to judgment dismissing the plaintiff’s complaint with costs.
    
      Opinion at Special Term.
    
    Barbour, C. J. I am satisfied, by the evidence in this case, that the written assignment given by Barton to Mr. McKee was intended and understood by the former to be a mere power of attorney, enabling McKee to collect the judgment in the name and for the benefit of the plaintiff therein, and not an assignment and transfer of the judgment itself, coupled with the customary power of attorney, such as the instrument, in form, purports to be ; and that the paper in question was executed by Barton without consideration, solely for the purpose of enabling McKee to collect the judgment for him.
    In the view I take of the matter it is not necessary to determine whether McKee, who does not appear to have been a lawyer at that time, really supposed when the paper was executed, that it was a mere power of attorney to collect the judgment, such as then he represented it to be, or not; for, if that was not his belief, it is clear that the execution of the instrument was procured by his false and fraudulent- representations to Barton in that regard.
    In either case, whether the paper was intended and understood by both parties to be a power of attorney, merely, or was obtained by the fraudulent representations of McKee, Barton must be considered, in equity, as between himself and McKee, the real owner of the judgment and of the lands purchased by means thereof at the sheriff’s sale, notwithstanding the technical assignment contained in the instrument executed by him, while McKee can, at best, be considered but a mere agent and trustee for the purposes of the purchase and conveyance.
    If I am aright in this conclusion, it follows that the plaintiff in this action is not entitled to recover. For, under the code, an action can be brought and maintained only by the real party in interest, unless the plaintiff sues as an executor, administrator, or trustee of an express trust, or under the authority of some statute (Code, §§ 111, 113), and granting the premises, there can be no doubt that Barton, and not McKee, is the real party in interest, inasmuch as a judgment in favor of the plaintiff would necessarily be for the sole benefit of the former as the real owner of the- land. I may add, it is not sufficient now, whatever it may have been formerly, for the plaintiff to prove a legal title in himself in a suit of this -character. If the pleadings and proofs establish the fact that he is not the real party in interest, or, in other words, the party who is to be benefited by a judgment nominally in his favor, he cannot recover, unless within the exceptions above referred to.
    There is another point which appears to me also to preclude a recovery by the plaintiff, to wit: Upon his examination as a witness he admitted that he was a native of Ireland, and then testified, subject to the defendant’s objection, “ I am a naturalized citizen ; have been since 1862.” This evidence is incompetent and insufficient to prove the fact that he was legally naturalized, even if oral testimony was admissible at all, without showing that the production of record or written instrument was impracticable. It is merely a legal opinion or conclusion, and not a statement of anything that was done by or before a court. The alienage of the plaintiff was therefore established upon the trial, and he failed to prove by legal and sufficient evidence, that he had ever been naturalized, or had made and filed the deposition or affirmation required by section 24 of the statute respecting persons who may hold lands (1 Rev. Stat., as amended in 1834).
    
      By the terms of section 26 of the same statute, therefore, he was, when the deed under which he claims title was executed to him, and, for aught that appears, still remains incapable of taking or holding the lands described therein, and it follows that he is not entitled to redeem such lands by virtue of any ownership thereof.
    The defendant is entitled to a judgment dismissing the complaint with costs.
    Judgment of dismissal and for costs was thereupon duly entered, and the plaintiff appealed from such judgment.
    
      John Townshend, counsel for appellant.
    
      John E. Parsons, counsel for respondents.
   By the Court.—Freedman, J.

As the findings of fact made by the learned chief justice, who tried the case, are fully supported by the evidence given upon the trial, and consequently will not be disturbed, I am of the opinion that the conclusions of law based thereon, and especially the final conclusion that the defendants are entitled to judgment dismissing the complaint with costs, should also be upheld.

The redemption of real property from the lien of a mortgage is an ancient branch of the equitable jurisdiction of the court of chancery. In Miner v. Beekman, 11 Abb. 147; S. C., 42 How. 33, I had occasion to briefly point out the origin and growth of the system of the filing of a bill by the owner of the equity of redemption for the redemption of mortgaged premises, and, on the other hand, the filing of a bill by the mortgagee to foreclose and cut off this right of redemption. I then showed that even under the Code, which abolished the forms of former actions and conferred law and equity jurisdiction upon the same tribunals, an action for such redemption still remains an action for purely equitable relief, and as such must be brought upon the. equity side of the court.

It is to be governed, therefore, by all the principles and rules which prevail in courts of equity and the trial of equity suits.

ISTow, the rule that the action must be prosecuted in the name of the real party in interest, was always the rule in equitable actions, as distinguished from actions at common law, the latter being required to be brought by the party to the contract, even though he had parted with his entire interest in it by assignment. -Chancery not only recognized the right of the assignee to bring the suit, but absolutely required him to do so. And so strict was the rule, that whenever it appeared, on the other hand, that the assignee himself was but ar nominal owner, it was held that he could not sue, but that the suit should ■ be brought by the real party in interest (Rogers v. Traders’ Ins. Co., 6 Paige, 597; Field v. Magee, 5 Paige, 539), unless indeed such assignee held such nominal interest as trustee, &c. (Story Eq. Pl. 152, note); and this is precisely the rule adopted by the Code, which, requiring the action to be brought by the real party in interest, excepts executors and administrators, trustees of an express trust as are therein defined, and persons expressly authorized by statute, who may sue alone without joining the person for whose benefit the action is prosecuted.

The defendants in this case defended upon the express ground, among others, that the plaintiff was not the real party in interest, and to be able, therefore, to maintain the action, it was necessary for' the plaintiff either to prove himself to be the bona fide legal owner of the equity of redemption, or to bring himself within one of the exceptions authorized by the code. He failed to do either.

Without descending to particulars, I think I may safely say that plaintiffs’ application to a court of equity for affirmative relief in Ms own favor and for Ms own benefit, appears, upon the whole case, to be so destitute of merits as not to commend itself to the favorable consideration of the court.

The judgment should be affirmed, with costs.