Case Name: Sarah Nutt v. James R. Cuming, Appellant, Impleaded with Thomas Kerrigan et al.; Edward L. Carey, Respondent
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1898-03-15
Citations: 155 N.Y. 309
Docket Number: 
Parties: Sarah Nutt v. James R. Cuming, Appellant, Impleaded with Thomas Kerrigan et al.; Edward L. Carey, Respondent.
Judges: 
Reporter: New York Reports
Volume: 155
Pages: 309–321

Head Matter:
Sarah Nutt v. James R. Cuming, Appellant, Impleaded with Thomas Kerrigan et al.; Edward L. Carey, Respondent.
1. Mortgage — Foreclosure. In an action to foreclose a mortgage, the interests of parties become barred and foreclosed, not upon the entry of the judgment, but upon the sale and conveyance of the land. (Code Civ. Pro. § 1632.)
2. Relation of Liens to Surplus. Only liens in existence at the time of the sale and conveyance in a foreclosure action are transferred to the surplus moneys arising therefrom; and if at that time no lien exists, there is nothing which can be transferred to the fund.
3. Lapse of Judgment Lien before Foreclosure Sale — Exclusion from Surplus. If at the time of the sale in a mortgage foreclosure action, to which a junior judgment lienor was a party, ten years have elapsed since such party’s judgment became a lien, it is not payable out of the surplus, even though the ten years had not elapsed at the time of the entry of judgment in foreclosure.
4. Execution against Land after Foreclosure Judgment. A judgment in foreclosure, while final for all purposes of review, is in other respects interlocutory; and parties to the action, having judgment liens upon the property, may sell it upon execution, notwithstanding ' the judgment, prior to the foreclosure sale.
Mitt v. Chiming, 22 App. Div. 92, affirmed.
(Argued February 28, 1898 ;
decided March 15, 1898.)
Appeal by the defendant, James E. Cuming, from a final order of the Appellate Division of the Supreme Court in the first judicial department, entered November 17, 189Y, reversing an order of Special Term affirming a report of a referee in surplus proceedings.
The facts, so far as material, are stated in the opinion.
Henry Thompson for appellant.
If, without sufficient proof of such fact, the Appellate Division was warranted in its inference that the sale of the mortgaged premises under the final judgment of foreclosure and sale, entered January 13, 1892, was more than ten years after the recovery and docketing of the 'Cuming -judgment (August 9, 1882), that fact alone did not warrant the Appellate Division in reversing the order of the Special Term and directing that the whole surplus moneys, as between Cuming and Carey, should be paid to the latter. (Caswell v. Kemp, 41 Hun, 434.) The action having been commenced, notice of Us pendens filed, the parties all brought before the court, and judgment having been entered within ten years from the recovery of the judgment, the right of Mr. Cuming to have his judgment satisfied out of the surplus could not be lost by the mere fact that the actual auction sale under the decree did not occur until more than ten years after the recovery of judgment, if such fact had been made to appear in the record of this appeal. (Delafield v. White, 19 Abb. [N. C.] 104; Fliess v. Buckley, 90 N. Y. 286; People ex rel. v. Bacon, 99 N. Y. 275 ; Code Civ. Pro. § 1200; Dempsey v. Bush, 18 Ohio St. 376; Lawrence v. Belger, 31 Ohio St. 175 ; Fort v. Litmer, 31 Ohio St. 215.)
William L. Olark for respondent.
The judgment obtained by James R. Cuming against Thomas Kerrigan, entered and docketed on the 9th day of August, 1882, ceased to be a lien upon the mortgaged premises at the expiration of ten years from that date. (Code Civ. Pro. §§ 1251, 1252; Matter of Harmon, 79 Hun, 226.) Not only must execution issue, but the sale must take place within ten years in order to preserve the lien of the judgment unless restrained by injunction .or writ of error. (Darling v. Littlejohn, 12 N. Y. Supp. 205 ; Floyd v. Clark, 16 Daly, 528.)

Opinion:
Haight, J.
On the 9th day of August, 1882, the defendant Cuming recovered a judgment against one Thomas Kerrigan, which became a lien upon real estate subject to the lien of a mortgage theretofore executed, bearing date the 14th day of January, 1882. On the 1st day of October, 1893, an action was brought to foreclose the mortgage, which resulted in the entering of the usual judgment of foreclosure and sale on the 13tli day of January, 1892. The sale of the property under the judgment did not, however, take place until December, 1896, and after the expiration of ten years from the entry of the Cuming judgment. The Special Term held that Cuming was entitled to have his judgment paid out of the surplus moneys arising on the sale. The Appellate Division reversed this part of the order, holding that the lien of the-judgment had ceased to exist before the sale took place under the foreclosure judgment, and that, therefore, no lien in favor of Cuming was transferred to the surplus moneys.
It is now claimed that the foreclosure judgment having been entered before the expiration of the ten years from the entry of the Cuming's judgment the lien was, by operation of law, transferred to the surplus moneys that should arise upon the sale of the premises as of the day of the entry of the foreclosure judgment, and that from that time he was barred and foreclosed of all right, title, interest or equity of redemp tion in the mortgaged premises We do not so understand the law. The judgment of foreclosure first determined the amount due upon the mortgage. It then provided for a sale of the premises at public auction by a referee appointed for that purpose, who was directed to execute and deliver to the purchaser a deed, and out of the moneys arising from the sale to pay the fees, expenses, taxes and allowance to attorneys, and then the amount due upon the mortgage. The surplus arising from the sale it required to be paid over to the chamberlain of the city of Mew York, subject to the further order of the court. It then adjudged " that the defendants and all persons claiming under them, or any, or either of them, after the filing of such notice of pendency of this action, be forever barred and foreclosed of ail right, title, interest and equity of redemption in the said mortgaged premises so sold or any part thereof." It will thus be observed that under the provisions of the judgment the right, title and interests of the defendants became barred and foreclosed, not upon the date of the entry of the judgment, but from and after the sale of the premises and the conveyance made thereunder.
The Code, after specifying the various steps necessary to be taken in the foreclosure of a mortgage, provides that " A conveyance upon a sale., made pursuant to a final judgment, in an action to foreclose a mortgage upon real property, is as valid, as if it was executed by the mortgagor and mortgagee, and is an entire bar against each of them, and against each party to the action who was duly summoned, and every person claiming from, through, or under a party, by title accruing after the filing of the notice of pendency of the action." ' (§ 1632.) Here the legislature gives to the conveyance the same force and effect that is given by the judgment. One is in harmony with the other.
Eule 64 of the General Eules of Practice provides that " On filing the report of the sale any party to the suit, or any person who had a lien on the mortgaged premises at the Ume of the sale, upon filing with the clerk where the report of sale is filed a notice, stating that he is entitled to such surplus moneys or some part thereof, and the nature and extent of his claim, may have an order of reference," etc. It is the lien existing at the time- of the sale that is transferred to the surplus moneys arising therefrom. If, at that time, no lien exists, there is nothing which can be transferred to the fund. Judgments over ten years old cease to be liens upon real estate, and, consequently, are not payable out of the surplus. (Floyd v. Clark, 16 Daly, 528; Fliess v. Buckley, 90 N. Y. 286; I. & T. Nat. Bank v. Quackenbush, 143 N. Y. 567; Tufts v. Tufts, 18 Wend. 621; Graff v. Kips, 1 Edwards Ch. 619 ; Roe v. Swart, 5 Cowen, 294.)
A mortgage upon real property may be foreclosed and the lands sold under the statute without an action. An action may he maintained to bar and foreclose all persons claiming an interest in or an equity of redemption, and for a sale of the lands for the purpose of paying the indebtedness due upon the mortgage. The chief object is the collection of the indebtedness, which can be effected only by a sale.. A judgment entered in a foreclosure action is final for all purposes of review, but in other respects it is interlocutory. All of the proceedings for the sale, including the advertising of the notice and the confirmation of the sale, take place thereafter. The provision barring others of their interest in, or of their rights of equity of redemption in the mortgaged premises, of necessity relates to the final concluding act, that of a sale of the premises. Until that time the mortgagee or the owner of the equity of redemption may redeem, and persons having judgment liens thereon may sell upon execution, notwithstanding the judgment, but, as soon as the sale is made, confirmed, and conveyance delivered, that provision of the judgment becomes operative and of full force, and the parties to the action are forever thereafter barred and foreclosed of all their right, title, interest and equity of redemption.
The other questions involved were properly disposed of by the Appellate Division.
The order should be affirmed, with costs.