Case Name: SEMON BACHE, Plaintiff, v. CHARLES DOSCHER, Executor, &c., Defendant
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1876-04-03
Citations: 9 Jones & S. 150
Docket Number: 
Parties: SEMON BACHE, Plaintiff, v. CHARLES DOSCHER, Executor, &c., Defendant.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 41
Pages: 150–158

Head Matter:
SEMON BACHE, Plaintiff, v. CHARLES DOSCHER, Executor, &c., Defendant.
L DEFICIENCY ASCERTAINED BY THE REFEREE ON A FORECLOSURE SALE AND SHOWN BY HIS REPORT ON FILE, BUT NOT. CONFIRMED.
1. AN ACTION BASED ON THE FORECLOSURE PROCEEDINGS AND THE REFEREE’S REPORT TO RECOVER THE AMOUNT OF THE DEFICIENCY AS REPORTED, CAN NOT BE SUSTAINED.
(a) Confirmation of the report is a pre-requisite to such an action.
1. This, where the form of a foreclosure judgment, after directing the referee to make certain payments, .is in the present usual form, to wit: “-that if the proceeds of such sale be insufficient to pay the amount so reported due to the plaintiff, with interest and costs, as aforesaid, the said referee specify the amount of such deficiency in his report of sale, and the defendant, A. B.” . (he not being the defendant against whom the action to recover the deficiency is brought), “pay the same to the plaintiff, and that the plaintiff have execution therefor,” without, in express terms, requiring confirmation of the report of sale.
1. CONMEMATIOIt, HOW TO BE OBTAINED.
(it) By giving notice of the filing of the report and allowing eight days thereafter to elapse, if no exceptions are filed, the report becomes confirmed; if exceptions are filed, they must be brought to a hearing (Rule 39).
(5) Semble. Perhaps it should be held to be the practice to enter an ex-parte order nisi, confirming the report, unless, cause to the contrary be shown, within eight days after notice of its entry, and of the filing of the report.
2. Fuhthek steps.
Whether, after confirmation, any further steps, and if so what, should be taken, is not passed on ; confirmation is at least necessary.
Before Monell, Ch. J., and Sedgwick, J.
Decided, April 3, 1876.
H. FOSEOLO SURE.
1. REFEREE TO SELL, &c., POWER OF.
(a) Allowance to purchaser out op the purchase money. 1. Prior mortgages,—Tie has no power to allow to the purchaser the amount thereof, and receive from him only the balance of the purchase money,
UNLESS
the judgment so orders.
(b) Report op sale, when, although IN' WORDS reporting a deficiency, IT IN FACT reports no deficiency.
1. When it appears on the face of the report, that the deficiency stated, was arrived at by making an unauthorized allowance to the purchaser of a sum equal to, or greater than, the deficiency reported.
Exceptions heard in first instance at general term. Complaint dismissed.
The complaint averred that plaintiff was assignee of a bond made by one Goebel, secured by mortgage upon real estate, that Goebel conveyed the real estate to Hardin, the defendant’s testator, and Hardin covenanted to pay the sum of money secured by said bond and mortgage ; that after his death, plaintiff proceeded "to foreclose the mortgage ; that defendant, as executor oí will, &c., of Hardin, was made a party to the action ; that judgment was given of foreclosure, “ and that if the proceeds of the sale should be insufficient to pay the amount reported due to the plaintiff, with interest and costs, the amount of such deficiency should be specified in the report of sale therein,” &c.; “ that upon such sale there occurred a deficiency of $731.55, as appears by the report of sale of said referee duly filed that ro part of the deficiency has been paid, though the plaintiff had demanded payment, &c.
The answer was in substance, a general denial.
The plaintiff gave in evidence, the mortgage by Goebel, and the deed of the fee by the latter to Hardin, defendant’s intestate, in which he assumed the payment of the mortgage. The plaintiff further gave in evidence the judgment roll in the action of foreclosure, to which the present defendant was a party. The complaint in that action set out enough facts to show that these defendants were liable to pay the amount of the mortgage, upon the covenant, in the deed to their testator, but it did not demand judgment against the defendant for the deficiency: while it did against Goebel, the obligor in the bond.
The judgment in foreclosure provided, that the referee appointed for that purpose, pay out of the proceeds of sale specified costs, fees and expenses, “any lien or liens, upon said premises, so sold at the time of such sale, for taxes or assessments,” and then to the plaintiff two thousand five hundred and eight dollars and ninety-eight cents, the amount adjudged to be due to him, and ‘ ‘ that if the proceeds of such sale be insufficient to pay the amount so reported due to the plaintiff, with interest and costs as aforesaid, the said referee specify tne amount of such deficiency in his report of sale, and the defendant, William Goebel, pay the same to the plaintiff,” and that the plaintiff have execution therefor.
The report of the referee was given in evidence, it having been filed ; and it stated, that the plaintiff had become purchaser for nine thousand seven hundred dollars; that the referee had allowed, in closing the purchase, six thousand and ninety-one dollars and twenty-five cents for prior mortgages assumed by him ; “ that other allowances had been made; that he had paid over to plaintiff, through his attorneys, one thousand eight nundred and two dollars and eighty-two cents,” leaving a deficiency still due and unpaid of seven hundred and forty-one dollars and fifty-five cents.
No proof was given of the existence at the time of making the report, of the mortgage, the amount of which was allowed. There was no proof that notice of the filing of the report had been given to the parties defendant in the foreclosure action. There was no order confirming the report.
The court dismissed the complaint, on the ground, ' that the plaintiff had no cause of action, and ordered the exception to be heard, in the first instance at the General Term.
Kauffman, Tunstall and Wagner, attorneys, and Lewis Sanders, of counsel for plaintiff, argued against the dismissal of the complaint.
Their printed points, however, do not bear on the questions decided by the court.
Stillwell and Swain, attorneys, and of counsel for defendants, on the questions decided, urged:
I. The report of a referee is not, per se, a record of judicial determination, and does not prove itself, and is not evidence of any fact, against any person. A report of sale is an ex parte proceeding, and has no effect until it is confirmed by the court; and where a party has appeared in the action, this can only be done, and the report be made evidence against him, by showing notice to him (Rules 39 and 73 Supreme Court, Griffing v. Slote, 5 How. Pr. 205).
II. The report of a referee is not, in any case, evidence of anything, except as to matters which have been referred to him. The duties of a referee appointed in a foreclosure suit to sell the property, are ministerial in their nature. He is not authorized to adjudicate upon, or allow, or pay any other liens or claims, except those specified in the judgment, but is directed to pay these, and deposit the balance of the proceeds of the sale with the Chamberlain, subject to the order of the court (People v. Bergen, 53 N. Y. 404). His report is, therefore, no evidence that there was any other encumbrance by mortgage on the property, or that it was a prior encumbrance, or that it was paid ; and as no voucher is annexed for the six thousand dollars alleged to have been allowed, the declaration of the referee, in the report, is no evidence of the disposition that was made of that amount (See Rule 73, Supreme Court).
III. There having been, therefore, no evidence of the facts alleged to have been shown by the report of sale, that there were any prior encumbrances on the property, that the proceeds of the sale had been so applied as to leave any deficiency for which the defendant was liable to the plaintiff, or that the plaintiff had been authorized to commence the action, the learned judge properly granted the defendants’ motion for non-suit.

Opinion:
By the Court.-—Sedgwick, J.
On the argument, the respondent's counsel argued that the complaint was properly dismissed, because it did not appear, that leave had been obtained to bring this action, and by section 153 of the Revised Statutes, vol. 2, p. 191, after a bill is filed for the foreclosure of a mortgage, " no proceedings whatever shall be had at law, for the recovery of the debt secured by the mortgage or any part thereof, unless authorized by the court," &c. It seems to me, best not to examine this question, because it is not specifically referred to in the pleadings, and was not upon the trial. If the obtaining of leave was part of the plaintiff's cause of action, in a sense that called upon him to plead it and prove it,' then the action of the court below might properly be sustained on that ground; but as the objection is of a nature that a party would be able, upon due notice, to' ask leave to amend, &c., it is best not to rest a determination of the merits upon it.
The plaintiff did not base his action, even if he had a right so to do, upon the liability at law of the defendant's testator, upon his assumption of the mortgage. The obligor of the bond might, under proper circumstances, have called upon the plaintiff, to apply the value of the security, viz. : the land, to the payment of the bond, as far as it would go, before calling upon him to pay. The plaintiff, voluntarily did this in the action of foreclosure, and the defendants were properly parties, if for no other purpose, in order to bind them by an adjudication, which should, against them, fix what amount would remain due upon the bond and upon the assumption of the mortgage, after the proceeds of the land had been applied towards satisfaction. We advert to no other questions than those which the parties have made in this action. The plaintiff, therefore, proceeded, on the trial of this action, to show that there had been an adjudication in the foreclosure action; that the proceeds of the sale, after making the proper deductions, did not satisfy the debt, but left a deficiency. The* plaintiff was not entitled to recover in this action, if the record did not show that there was a deficiency.
It is plain, that the interlocutory judgment, did not adjudicate that there was a deficiency. It only provided, that the plaintiff should have execution for the amount of a deficiency, if there should be one. For the purpose of ascertaining this, it directed specifically what the referee, who was but a ministerial officer (People ex rel., Day v. Bergen, 53 N. Y. 404), should do with the proceeds of the sale; he was to deduct expenses, costs, taxes and assessments; then be was to pay the plaintiff, the amount found to be due to him, and report what surplus there was or what deficiency. In regard to these things, the action of the referee being ministerial and not. judicial, it or his report thereon, could not have the binding force of an adjudication. It would have been passed upon judicially, if it had, according to the rules and practice, been confirmed by the court. Filing it, did not give it judicial sanction. The burden of proof is upon the plaintiff. By rule 39, the report does not become "absolute and stand as in all things confirmed" until notice of filing 1ms been given, and eight days have elapsed after the notice, without exceptions being filed. Evidently, the party against whose interest the report is, is not brought before the court and called upon to make exceptions, or be bound bjr an omission to make them, until he has received notice of filing. Therefore, at least, without deciding in this case what should be the further steps to be taken, if any, the party sustaining the report as an adjudication, should show that notice of filing had been given to the par.ty who has the right to except.
A reference to the practice before the present rules, will perhaps make this clear.
The chancellor held, that it was not necessary to wait until after the sale of the mortgaged premises before the contingent decree for the payment of such deficiency could be" made (McCarthy v. Graham, 8 Paige Ch. 480; De Agreda v. Mantel, 1 Abb. Pr. 135).
The form of the decree to be entered in such cases expressed with greater accuracy, than is used in the present judgment, the rights of the parties. It adjudged payment of the. deficiency, and authorized an execution to be issued for it, "if there should appear to be one, upon the coming in and confirmation of thé master's report" (Sprague v. Jones, 9 Paige Ch. 397).
In the Bank of Rochester v. Emerson (10 Paige Ch. 115), the complainant,had foreclosed a mortgage made by the defendant, and had the usual decree over against him for deficiency in case the proceeds of the lands should be insufficient. The bill in the case cited, was a creditor's bill to obtain satisfaction of the deficiency, and after setting out the proceedings, and decree in foreclosure, further stated that the master reported, that there was a deficiency, &c., "as by the report duly confirmed, &c., would more fully appear," and that execution had been issued and returned unsatisfied. The defendant pleaded in bar, that the report of the master as to the deficiency, had neither been filed nor confirmed, at the time the execution was issued. The question was whether this was a bar. The chancellor held that it was. He said it was not a case of a mere irregularity in the execution, which could not be examined in a collateral suit. He said, what is particularly in point here, that "the decree does not direct the mortgagor to pay the deficiency, when it shall be ascertained by the result of the sale, or when the master shall have made out, and signed his report. .Nor does the filing of the report of the master, stating the amount of the deficiency, entitle the complainant to demand the immediate payment of such deficiency, so as to authorize the issuing of an execution therefor. The decree is that the mortgagor or other defendant, who is personally liable for the mortgage debt, pay the amount of the deficiency reported due, upon the coming in and confirmation of the report of the master. Until the master's report is confirmed as well as filed, therefore, the deficiency is not payable, under the decree," &c.
In the present case, the judgment does not, in terms, call for the confirmation of the report, but by construction of the law, such is its meaning. The rule 39, applies itself to the judgment, and shows, that the judgment did not finally adjudge the payment of a deficiency reported by a report which was not final.
By the former practice, and perhaps it should be held to be the practice now, this matter was made definite, by an ex parte order nisi, confirming the report, to become absolute eight days after notice of its entry and of the filing of the report. The present rule, however, provides only, by its words, for notice of filing, &c.
Finally, the report in the present case, is official only in those respects in which the referee obeyed the judgment. It was extra-official, and only personal, in those respects in which he acted without the direction of the judgment. By the words, he was directed to specify the amount of deficiency only, if the proceeds of the sale were insufficient, after he had made the particular deduction directed. He was not directed to allow the purchaser the amount of prior mortgages upon the land, nor even to ascertain if there were such. So far as the record shows, the purchaser's right as to these alleged mortgages, was if the facts justified him, to refuse to complete the purchases. Therefore when the referee made a deduction greater than the amount reported as deficiency, which he was not authorized to make, it. in substance appears by the report itself, that the proceeds of the sale were not insufficient to pay the amount due to plaintiff, and there was no deficiency.
I am of opinion that the plaintiff's exception should be overruled, and the defendant have judgment, upon the order dismissing the complaint, with costs.
Monell, Ch. J., concurred.