Case Name: August Schieck, Respondent, v. Annie Donohue, Appellant, Impleaded with Others; Henry Toensing, Purchaser, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1903-03
Citations: 81 A.D. 168
Docket Number: 
Parties: August Schieck, Respondent, v. Annie Donohue, Appellant, Impleaded with Others. Henry Toensing, Purchaser, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 81
Pages: 168–171

Head Matter:
August Schieck, Respondent, v. Annie Donohue, Appellant, Impleaded with Others. Henry Toensing, Purchaser, Respondent.
Judgment of foreclosure and sale entered, after a demurrer to an answer has been sustained — it will be vacated where the demurrer is overruled on appeal — restitution not ordered until a final decision of the case.
In an action brought to foreclose a mortgage on real property, a demurrer interposed by the plaintiff to the mortgagor’s answer was sustained at thé Special Term. The plaintiff thereupon made a motion for a judgment of foreclosure and-sale, which motion was granted and the property was sold thereunder. The mortgagor appealed to the Appellate Division from the interlocutory judgment sustaining the demurrer, upon which appeal the Appellate Division reversed the interlocutory judgment and overruled the demurrer and allowed the mortgagor to serve an amended answer upon payment of costs. The mortgagor tendered the costs and served an amended answer.
Held, that, upon the reversal of the interlocutory judgment, the judgment of foreclosure and sale necessarily fell and that the mortgagor was entitled to have the latter judgment vacated;
That the court would not determine whether the mortgagor was entitled to compel the purchaser at the foreclosure sale to make restitution of the property and account for the rent's, until it was finally determined that the plaintiff was not entitled to a judgment of foreclosure and sale.
Appeal by the defendant, Annie Donohue, 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 15th day of January. 1903, denying her motion to set aside the judgment theretofore entered herein, and for restitution.
J. Wilson Bryant, for the appellant.
Peter Cook, for the plaintiff, respondent.
John E. Brodsky, for the purchaser, respondent.

Opinion:
Ingraham, J.:
The action was brought to foreclose a mortgage made'by the appellant to secure the sum of $2,000, with interest. The mortgage was due on the 6th day of April, 1905, and it contained a clause that if there was default in the payment of the interest for thirty days the principal sum should at once become due at the option of the mortgagee. The complaint alleged that the interest upon said bond and mortgage which became due and payable on the 6th days of April and October, 1901, had never been paid and that more than-thirty days had elapsed since the same became due and payable, and that the plaintiff had elected that the whole principal sum should be immediately due. The defendant Donohue answered denying the 5th and 6th paragraphs of the complaint, and as a separate defense alleged a tender of the full amount of interest due in cash, and that the said plaintiff deliberately and willfully refused to accept the same. This defense was demurred to, which demurrer was sustained by the Special Term, whereupon the plaintiff made a motion for judgment of foreclosure and sale, and final judgment was entered on April 7, 1902.
The defendant Donohue appealed to this court from the interlocutory judgment sustaining the demurrer, and that appeal resulted in a reversal of the interlocutory judgment, and the demurrer was overruled. (Schieck v. Donohue, 77 App. Div. 321.) The order of the Appellate Division reversing the interlocutory judgment allowed the defendant Donohue to serve an amended answer upon payment of costs, and acting under this leave, she served an amended answer and tendered the costs. She thereupon moved to vacate the final judgment, which motion was denied, and from the order entered thereon she appeals.
We think this motion should have been granted. Upon the reversal of the interlocutory judgment sustaining the demurrer, there was an issue upon the pleadings to be tried before the plaintiff was entitled to final judgment, and the judgment that has been entered based upon this interlocutory judgment, subsequently reversed^ necessarily fell with the reversal of the interlocutory judgment. The final judgment entered was .without authority to support it, and the defendant who had interposed an answer which set up a defense to the action is entitled to have the validity of that defense disposed of upon a trial. If the plaintiff proceeded upon an interlocutory judgment and obtained a final judgment based upon it, where the interlocutory judgment was subject to review by the appellate court, that final judgment is subject to be set aside upon a reversal of the interlocutory judgment upon which it was based. The final judgment does not recite that it was entered on notice to the attorney for the defendants. There is a statement in the affidavit of the plaintiffs attorney in opposition to this motion that after the time • allowed by the interlocutory judgment for the defendant Donohue to amend had expired, there being no stay, the plaintiff " Upon due notice applied for final judgment," and that upon this application for final judgment the defendant's attorney raised the objections to the regularity of the plaintiff's proceedings relied upon on this motion, and that these objections weiie overruled and the application granted, and a referee was appointed to compute the amount due. It was upon the referee's report that final judgment was- entered. The defendant was not bound to appeal from the final judgment to raise the question presented by the determination of the demurrer to her answer, but was entitled upon the reversal of that interlocutory judgment to have the final judgment entered thereon vacated.
The defendant also asks to be awarded restitution of the property sold under the final judgment that was entered, and that the purchaser account, for the rents and profits collected by him from the time he took possession of the premises. Although the purchaser was required by the order to show cause why the application should not be granted, this order and the motion papers were not served upon him. He was not, therefore, á party to the proceeding. It appeared that upon the sale of the premises in August, 1902, under the final judgment, the property was bid in by the plaintiff who immediately assigned the bid to one Toensing, who subsequently complied with the terms of the sale and paid as the consideration of the deed of the premises the sum of $3,100, and subsequently paid the taxes and other sums for repairs to the property, and interest on the first mortgage which was superior to the mortgage foreclosed by the plaintiff. It is quite apparent that the court below was correct in refusing to award restitution of the premises upon this application. It is not necessary to determine whether the title of this purchaser is protected by sections 1292 and 1323 of the Code of Civil Procedure. That quéstion can only be settled in a proceeding to which the purchaser is a party; and such restitution should not be awarded until after the issues raised by the answer have been tried, and it is finally determined that the plaintiff is not entitled to a judgment directing, a sale of the property. It is alleged by the plaintiff, and not denied, that lie is amply responsible and able to respond to the defendant for any injury that she has sustained in consequence of the sale of the property ; and we think the final disposition of the question as to whether or not this defendant is entitled to a restitution of the property should await the final determination of the action.
It follows that the order appealed from must be reversed so far as it denies the motion to vacate the final judgment, and to that extent the motion should be granted, with ten dollars costs and disburse-, ments of appeal and ten dollars costs of motion, and that in other respects the order appealed from should be affirmed.
Van Brunt, P. J., McLaughlin, Hatch and Laughlin, JJ., concurred.
Order reversed in so far as it denies motion to vacate final judgment, and to that extent motion granted, with ten dollars costs and disburseménts of appeal and ten dollars costs of motion; in other respects, order affirmed.