Case ID: ad_121/html/0652-01.html
Source: Caselaw Access Project
Author: {"author": "Laughlin, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

City Real Estate Company, Respondent, v. Archibald J. MacFarland and Others, Defendants, Impleaded with George I. Malcom, as Committee, etc., of Louisa Malcom Stenton, an Incompetent Person, Appellant.
    First Department,
    October 25, 1907.
    Incompetent person—leave tó sue denied.
    A plaintiff which has taken an assignment of a mortgage when its validity is questioned in a prior action brought by the committee of an incompetent against several defendants-to set aside, the instrument, as procured by fraud,, should not he granted leave to join the incompetent as a party-defendant in an . action of foreclosure, to which all the .persons involved in the alleged fraud are not parties, but should he left to defend, its rights in the prior action.
    Appeal by t.Jie defendant,' George I. Malcom, as committee; etc., from an order of the Supreme Court, made at the New York Special Term, and entered in the office of the clerk of the county of New York on the 12th day of June, 1907, granting leave to the plaintiff nunc pro turne as of - the 15th day of March, 1907, to join Louisa Malcom Stenton and George L Malcom, as committee of her person and property, as parties defendant, and granting leave nunc pro timo as of said date to serve the summons and complaint on them.
    
      Nelson S. Spencer, for the appellant,
    
      Harold Swain [Norman Wilmer Chandler with him on the brief], for the respondent. •
   Laughlin, J.

. If it were proper to grant leave to sue the incompetent person it was competent for the court to make the order denying the motion to set aside the service from which an appeal has been taken, which was argued with this appeal, and to make the order allowing the service nunc pro tunc but we are of opinion that leave should hot have been granted. The action is brought to foreclose a mortgage for $45,000 on premises situate in the county of New York, made by Archibald J. MacFarland to the Farmers’ Loan and Trust Company on the 13th day of December, 1905, which was assigned to the plaintiff prior to the commencement of the action. Louisa Malcom Stenton was duly adjudged an incompetent person and George I. Malcom. was duly appointed-committee, of her person and property on the 22d day of November, 1906. It appears that in March, 1903, she was in possession of the premises described in the mortgage, claiming to be seized in fee thereof, and that during that month proceedings were' instituted by' the executor of .one John Munn in the Municipal Court of the city of New York, borough of The Bronx, to recover possession upon the ground t'haf she was a squatter. The- affidavit of the committee presented in opposition to the motion for' leave to sue shows that said Louisa Malcoin Stenton executed a deed of an undivided two-fifths interest in the premises to the attorneys 'employed by. her to defend the summary proceedings, in consideration - for their services and disbursements, covenanting that she was seized in fee simple absolute and assuming all taxes, assessments ■ and water rates then a lien upon the premises; that subsequently an action in partition was" brought.'by one of the grantees against her and the other, in which the executor of Munn was joined as a. party defendant; that she was not served but an .appearance was entered for her without her knowledge or consent; that the action was conducted' throughout in 'the interests of her grantees and in disregard-of'her rights and interests:-which were adverse to theirs "; that an interlocutory judgment for a sale of the premises was entered, adjudging that she was the owner of an undivided tlxree-fifths interest, and the referee appointed to sell was directed to pay out of the proceeds, of the sale all taxes, assessments and water rates which were liens upon the premises, and to charge against her share all of those which were liens at thé timé of the conveyance .to her attor-. neys; that the premises were purchased by -MacFarland for her grantee defendant, and the purchaser was allowed in violation of the direction contained in the interlocutory judgment to retain the sum. of $45,865.65. On' account of' taxes, assessments and water, rates, which was the apparent amount thereof* notwithstanding the fact that simultaneously with. the execution, of the referee’s deed to MacFarland, he executed the mortgage to the Farmers’ Loan and Trust Company, arid'at that timé, to the knowledge of the mortgagor and mortgagee, the taxes, assessments and water rates had been compromised with the- city for $27,274.10, the.amount being paid by her. grantee,, whom the purchaser represented ; that the surplus of the purchase price was divided between her grantees upon the theory that her share was insufficient to pay her portion of the taxes, assessments and water rates, and she, therefore, received nothing. It appears that during all this time slie remained in undisturbed possession of the premises. MacFarland executed a second mortgage to átióther party on the premises to secure the payment of $6,000. This mortgage was foreclosed and said Louisa Malcom Stenton was made a party- defendant -and interposed a defense. The action was thereupon discontinued as to her. She subsequently commenced' an action against "the mortgagees, her grantees, MacFarland and others, charging in effect tliat-these mortgages were collusive,. fraudulent and void as to her; that the Farmers’ Loan and Trust Company appeared and answered in that action and the case is now upon- the calendar awaiting trial. The committee subsequently brought a similar action against the Farmers’ Loan and Trust Company and others, and after service upon it in that action the Farmers’ Loan and Trust Company assigned the mortgage to the plaintiff, who brought this action to foreclose it. The plaintiff having taken an assignment-of this mortgage when- its validity was involved in two actions then pending against its assignor, in which all other, parties in interest were before the court, it should not now be permitted to require the committee to litigate in defense of this action, in which, for want of necessary parties, full relief may not be obtained, matters affirmatively averred by him and by tlie incompetent person in the others. The plaintiff having purchased a mortgage, the validity of which was then involved in litigation, should be left to its remedy to defend its rights in the actions then pending against its assignor.

It follows that -the 'order should be reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.

Patterson, P. J., Ingraham, Clarke and Houghton, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and ' motion denied, with ten dollars costs.