Court Opinion

ID: 5343962
Source: CourtListenerOpinion
Date Created: 2022-01-08 06:09:46.848743+00
Date Added: 2024-06-11T08:29:37.505733
License: Public Domain

Adel, J. (dissenting).
I dissent and vote to modify the order in so far as it imposes, as a condition for the payment of the award, the entry of a deficiency judgment, under section 1083-a of the Civil Practice Act.
A mortgagee has double security for the amount due on the debt to secure the payment of which the mortgage is given: (a) the property covered by the mortgage, and (b) the personal security of the one owing the debt, usually evidenced by the bond accompanying the mortgage.
To enforce his right he may foreclose the mortgage and sell the real property. When the amount for which the property is sold is insufficient to pay the debt, he may proceed to enforce the personal security by a deficiency judgment against the one primarily liable. The right to obtain a deficiency judgment in an action to foreclose a mortgage rests entirely upon statutory provisions. Prior to the Revised Statutes, the Court of Chancery, in a foreclosure action, had no jurisdiction to render a personal judgment against the mortgagor upon his bond or covenant to pay the mortgage debt. Such a judgment could only be obtained by an action at law. (Rutherfurd Realty Co. v. Cook, 198 N. Y. 29; Frank v. Davis, 135 id. 275.)
The procedure is now regulated by sections 1083 and 1083-a of the Civil Practice Act.
When a deficiency judgment has been recovered it is a personal judgment and the creditor may then use all the means provided by law to enforce payment thereof against the debtor.
*657However, where the mortgagee does not seek to hold the mortgagor personally responsible, he may enforce payment of the debt by recourse to his security without a deficiency judgment as a basis. It has been repeatedly held that where land is taken for public use the damages awarded take the place of the land in respect to all rights and interests which were dependent upon and incident to it.
A condemnation award.takes the place of the land which has been taken and the hen of the mortgage is transferred to it. Where the mortgage lien is upon the entire property and a part of it is taken in condemnation and an award is made, the lien attaches to the award. The mortgage is not shifted over onto the part of the property which remains not taken in the condemnation proceedings. (Matter of City of New York [Houghton Ave.], 266 N. Y. 26, at p. 29, and cases there cited.) Therefore, when a mortgage has been foreclosed and the real property sold and the sum realized is insufficient to pay the mortgage debt, recourse may be had to that security which has been substituted for the property — in this case being the award in condemnation. Such proceeding is not considered a proceeding to enforce payment under the personal security of the debtor, but is a proceeding against the property covered by the mortgage. Hence a personal judgment against the mortgagor by way of a deficiency judgment is not a prerequisite. All that is necessary is the showing that there is a deficiency, which of course may be evidenced by the report of the selling referee. It may be necessary that the report of the referee be first confirmed. (Emigrant Industrial Sav. Bank v. Van Bokkelen, 269 N. Y. 110; Gates v. De La Mare, 142 id. 307; Matter of Mayor, etc., City of New York, 244 App. Div. 125; Utter v. Richmond, 112 N. Y. 610.)
I am in accord with the statement in the majority opinion that where a mortgagee begins his action to foreclose either after the award has been made or while the amount is still prospective in condemnation where part of the land covered by the mortgage is taken and describes only the land not taken, he may waive his lien on the award. It is this question of waiver only that should be determined in this proceeding without regard to the value of the property sold in the foreclosure action.
Accordingly, in my opinion, the order should be modified by providing for the determination of this issue, and as thus modified affirmed.
Lazansky, P. J., concurs.
Order, in so far as an appeal is taken therefrom, affirmed, with ten dollars costs and disbursements to respondents Brandonisio and Claussen.