Case Name: Daniel Peck et al., Resp'ts, v. John H. Ormsby, Impl'd, App'lt
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1889-12-28
Citations: 28 N.Y. St. Rep. 518
Docket Number: 
Parties: Daniel Peck et al., Resp’ts, v. John H. Ormsby, Impl’d, App’lt.
Judges: 
Reporter: New York State Reporter
Volume: 28
Pages: 518–519

Head Matter:
Daniel Peck et al., Resp’ts, v. John H. Ormsby, Impl’d, App’lt.
(Supreme Court, General Term, Third Department,
Filed December 28, 1889.)
Mortgage—Homestead—Code Oiv. Pro., §§ 1397,1404.
' Section 1404 Code Civ. Pro., provides that a mortgage hereafter exe* cnted upon property exempt as a homestead is ineffectual until the exemption has been cancelled as prescribed in the section. H Id, that this provision was not intended to and did not prevent a mortgagor from mortgaging the excess of the property beyond the value of $1,000, (the amount exempt under § 1397).
Appeal by the defendant John H. Ormsby from a judgment of foreclosure and sale.
The action was brought to foreclose two mortgages given by defendant and his wife, one in 1883, the other in 1885. The premises were conveyed to the mortgagor in 1881 by a deed containing a clause which stated that the premises were “ designed to be held as a homestead exempt from sale on execution ” under the act of April 10, 1850. In 1883 and before giving the mortgages the mortgagor caused to be recorded in the clerk’s office in the proper book a notice that he designed the premises to be held as a homestead under said act.
J. M. Whitman, for app’lt; L. M. Brown, for resp’ts.

Opinion:
Learned, P. J.
Section 1397 of the Code provides that a lot and buildings not exceeding in value $1,000, occupied as.a residence, designated as a homestead, shall be exempt from sale on execution. This exemption continues for certain times after the death of the owner, and ceases when the property is not used as a residence. Section 1400. The statute does not seem to forbid the owner to sell the property. Perhaps, too, he might sell the fee subject to the homestead exemption. Section 1402 provides for the case where the value exceeds $1.000, making the lien of a judgment attach to the surplus. But this lien is to be enforced in a creditor's action. The reason for this, doubtless, is that in such an action the rights of the parties can be adjusted as provided in § 1403. These two sections show that the legislature intended that the privilege of exemption should not extend beyond the value of $1,000. And in the last section it is provided that, not only in such creditor's action, but "in any other action affecting the title to an exempt homestead," the court, on a sale of the jiroperty, must marshal the proceeds.
Section 1404 provides the mode for cancelling the exemption, and declares any other mode void. It then provides: "A mortgage hereafter executed upon property so exempt is ineffectual until the exemption has been cancelled, as prescribed in this section."
In the present case Ormsby mortgaged to plaintiffs his exempt homestead. On the foreclosure it was found as a fact that the property was worth over $1,200. It was adjudged that the land should be sold, but not unless the bid was more than $1,000; that if sold, $1,000 should be paid to Ormsby before even fees and expenses of sale or amount adjudged to plaintiff. Ormsby appeals, and claims that the section declaring the mortgage ineffectual makes this mortgage void.
We think the decision was right. The object of the clause relied on by appellant was to prevent any possible construction that the mere execution of the mortgage was a cancellation or waiver of the exemption. It did not intend to prevent the mortgagor from mortgaging what was not exempt. Suppose the house and lot were worth $50,000, is there any reason why the mortgagor might not mortgage the value above $1,000 ?
If the plaintiffs were creditors on book account, they could sue on the account, and after judgment could, by creditor's action, reach the surplus. But, having a bond secured by mortgage, if they had sued on the bond they could not sell the equity of redemption, Code Civ. Pro., § 1432; and, therefore, perhaps, could not reach it by creditor's action. Their only safe course, therefore, was to foreclose.
The word " ineffectual " seems to have been chosen to express that the mortgage was ineffectual to cancel the exemption. It is not equivalent to " void." For it will be seen that it is ineffectual only till the exemption has been cancelled. Therefore it is plainly only as to the exemption that it is ineffectual. And the judgment appealed from so treats it
We need not consider what would be the effect of a mortgage expressed to be subject to the homestead exemption right of the mortgagor. Nothing of that kind is here. By mortgaging his land Ormsby has rendered it necessary, in order to do justice to all parties, that the land should be sold. As he has not cancelled the exemption he retains his claim to $1,000 of the proceeds.
A suggestion is made that the instrument creating the exemption was not in compliance with the Code. But the plaintiffs have not appealed.
The judgment is affirmed, with costs.
Landon and Ingalls, JJ., concur.