Court Opinion

ID: 7288879
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:30:59.427235+00
Date Added: 2024-06-11T16:19:15.180630
License: Public Domain

The Chancellor.
This suit is brought to obtain relief against fraudulent foreclosure proceedings in this court. The bill states the following facts:
On the 30th of April, 1868, Abby A. McLaughlin, being the owner of certain land in Jersey City, gave a mortgage for *45$2,400 thereon to Washington B. Williams, esq., master in chancery. Mr. Williams, on the 26th of April, 1871, assigned the mortgage to Letitia Gordon, executrix. In August, 1868, Mrs. McLaughlin died. By her will she gave all her property to her daughter Margaret. The latter, May 1st, 1869, gave a mortgage for $4,000, on the same property, to Mr. Williams as master, and he assigned it in July following to Jesse Paulmier, executor, who, the same day, assigned it to the Jersey City Insurance Company. On the 5th of January, 1870, Margaret McLaughlin, for the consideration of $300, conveyed to Mrs. Martha M. James, for use as a party wall, a strip of land on the southerly side of the mortgaged premises four inches wide by thirty-six feet in depth, together with so much of the wall of the house on the mortgaged premises as was on that strip • and in April, 1877, Mrs. James conveyed it to the complainant. In March, 1878, Margaret McLaughlin conveyed to the complainant two other parts of the mortgaged premises, one being the rear thereof, and the other a continuation of the before-mentioned strip of four inches in width from the westerly end of the strip to the rear land just mentioned. In October, 1874, she conveyed to the defendant, Catharine Goulard, all of the mortgaged premises except the parts before mentioned, the strip previously conveyed to Mrs. James, and the parts subsequently conveyed to the complainant. The consideration of the deed to her was $11,500, and she assumed the payment of the two mortgages as so much of the purchase-money. About the 1st *46of January, 1880, she and her husband, the defendant, Thomas Goulard, entered into an agreement with the holder of the mortgages, that Mrs. Gordon, the holder of the first mortgage, should bring a suit for the foreclosure of her mortgage, and make the holder of the other and the complainant parties thereto, and that the whole of the mortgaged premises should, at the sale thereunder, be purchased by Mr. Goulard at a nominal price, and, after such purchase, he and his wife should pay off the mortgages. Both Goulard and his wife were then solvent and able to pay off the mortgages, but their object in procuring the foreclosure was to enable them thereby to obtain title to the complainant’s part of the mortgaged premises without paying any consideration therefor. The suit was brought accordingly, and, at the sale, the property was bought in, in behalf of Goulard, by the solicitor of the complainants in the foreclosure suit, for $3,500, and Goulard obtained a deed from the sheriff therefor accordingly, and at or about the same time he and his wife paid off the mortgages, but did not cancel them of record. The sheriff’s deed was given on or about the 8th of July 1880, and on the 15th of the same mouth, Goulard and his wife gave a new mortgage to Mrs. Gordon, on the part of the mortgaged premises conveyed to Mrs. Goulard by Margaret McLaughlin, and the complainant’s land before mentioned on the rear of the mortgaged premises. The complainant did not learn of the existence of the agreement above mentioned between the Goulards and the mortgagees, or that the property had been bought in for Goulard, until after the execution and delivery of the sheriff’s deed. The complainant has no adequate remedy at law by suit on the covenants in his deeds for the loss of the land on which the wall stands, because the beams of his house (which has been built for eight years) are, at one end, supported by the party wall, and he cannot build a new wall, for it must, on account of the nature of the land, be supported on piles, the driving of which Goulard’s house renders impossible. Neither the deed to Mrs. James nor that to the complainant from Margaret McLaughlin, conveys the land subject to the mortgages, or either of them, or any part thereof. *47The bill prays relief as against the Goulards and Mrs. Gordon. It alleges that the latter had full notice of the complainant’s •equity when she took her mortgage from the Goulards.
On the foregoing facts, there can be no doubt of the complainant’s right to the relief which he seeks. The Goulards, according to the statements of the bill, conspired with the mortgagees to deprive, by means of foreclosure proceedings, which were not only collusive, but a mere sham, the complainant of his property merely for the benefit of the Goulards, and they accomplished the purpose. The collection of the money flue on the mortgages was no part of the object of those prooeedings, for it was agreed that the property shotild be struck off at the sheriff’s sale to Goulard, as the pretended purchaser thereof, at a nominal price, and that he and his wife should then pay off the mortgages. Mrs. Goulard, having assumed the payment of the mortgages in the conveyance by Margaret McLaughlin to her, was, by virtue of her assumption, bound in •equity to protect the complainant, as the grantee of Margaret McLaughlin of part of the mortgaged premises, at least to the extent of the value of Mrs. Goulard’s land. In the proceedings for foreclosure he could have required the mortgagees, if it would not have been prejudicial to their interest to do so, to have recourse to her land before selling his to pay the mortgages. Though had the proceedings been bona fide, the complainant would, under the circumstances, now have no recourse to the Goulards; on the other hand, seeing that those proceedings were the very reverse, he has lost no rights by them. Obviously, equity, which relieves against fraud even in judgments at law, will not be slow to relieve against it when perpetrated by means of its own proceedings. The fact that the property was struck off at $3,500, instead of a price merely nominal, evidently will not affect the right to relief if, as the bill alleges, the foreclosure proceedings were merely colorable. The bill states that Mrs. Gordon not only had notice of the complainant’s rights in the premises, but was a party to the combination to deprive him of his property. Her mortgage was paid off by the Goulards after the sheriff’s sale, and she *48took a new one on all the property except the strip, on part of which the party wall is. The complainant insists that, under the circumstances, his property should be relieved from that mortgage. The bill has equity as against her. The demurrer will be overruled, with costs.