Court Opinion

ID: 3629211
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:09:04.014741+00
Date Added: 2024-06-11T13:45:05.636686
License: Public Domain

The defendants' intestate, Charles A. Stilwell, gave two mortgages upon his farm in the town of DeWitt, county of Onondaga, one in 1881 for $2,000 and the other in 1886 for $1,000, to secure the payment of money borrowed at the dates and to the amounts stated. A bond in the usual form accompanied each mortgage and represented the debt secured. In 1897 he gave a mortgage upon certain salt lots owned by him in the city of Syracuse for $3,720, of which the *Page 87 
sum of $720 represented a new and independent consideration and the remainder represented the debt secured by the two mortgages upon his farm. The mortgage on the salt lots contained the condition that said sum of $720 and interest should be paid and also that it was given "as a further and additional security for the payment" of the debts represented by the two mortgages upon the farm. In 1899 the mortgage on the salt lots was foreclosed and the proceeds, above expenses, were applied in payment of said sum of $720, and the remainder upon the two farm mortgages. A deficiency was reported by the sheriff making the sale, but no judgment was ever entered or docketed therefor, nor was any execution issued to collect the amount thereof. Subsequently the holder of all the mortgages, including said deficiency arising in the action to foreclose, transferred the mortgages on the farm to the plaintiff without, in terms, transferring any right to the deficiency, which, however, passed by operation of law. A few days later the plaintiff began this action to foreclose the mortgages on the farm without obtaining leave of the court, and the defendants' intestate answered, asking that the complaint be dismissed because no leave had been obtained under section 1628, or execution issued pursuant to section 1630 of the Code of Civil Procedure. The defense was not sustained and judgment of foreclosure in the usual form was rendered at Special Term and affirmed on appeal by the Appellate Division, one of the justices dissenting.
Section 1628 provides that "While an action to foreclose a mortgage upon real property is pending, or after final judgment for the plaintiff therein, no other action shall be commenced or maintained, to recover any part of the mortgage debt, without leave of the court in which the former action was brought."
Section 1630 provides that "Where a final judgment for the plaintiff has been rendered, in an action to recover any part of the mortgage debt, an action shall not be commenced or maintained to foreclose the mortgage," unless an execution *Page 88 
has been issued upon the judgment and returned wholly or partly unsatisfied.
As we read these sections, the command of the earlier is not to sue the bond, or the promise representing the mortgage debt, while an action to foreclose the mortgage is pending, without leave of the court; and of the later, not to commence an action to foreclose, after judgment rendered in an action at law on the bond or promise, without the return of an execution unsatisfied. The object of the statute is to shield the mortgagor from the expense and annoyance of two independent actions at the same time with reference to the same debt. This is the policy of the law in statutory foreclosures and was the policy of the Revised Statutes relating to foreclosures by action, prior to the enactment of the Code. (2 R.S. 191, § 156; id. 544, § 1.) In other words, only one action is permitted at the same time, except as the statute provides, for it forbids a suit in equity to foreclose the mortgage until the remedy at law on the bond, if resorted to, has been exhausted, and an action at law on the bond, while a suit in equity to foreclose the mortgage is pending, without leave of the court. (Throop's Code, notes to §§ 1628 and 1630.) As was well said in the opinion of the Special Term: "It was never intended to prohibit a separate foreclosure in equity of two separate mortgages, upon separate pieces of property, although each may have been given to secure the payment of the same indebtedness." It may be added that as the actions to foreclose both mortgages must be before the same court, with all the power of a court of equity, the rights of the parties can be fully protected by imposing any condition as to costs or otherwise that justice may require.
An action to foreclose a mortgage is not an action to recover the mortgage debt from the mortgagor personally, but to collect it out of the land by enforcing the lien of the mortgage. There is only one cause of action alleged, even if the bond is set forth in the complaint and judgment for deficiency is demanded as a part of the relief. No motion to separate could be successfully made under section 483 of the Code, upon the *Page 89 
ground that a cause of action at law on the bond had been united with a cause of action in equity on the mortgage. An action to enforce a mortgage is not an action in personam to recover a debt from an individual, but is in the nature of a proceeding inrem to appropriate the land by foreclosing the lien of the mortgage and applying the proceeds to discharge the debt. The Revised Statutes authorize the court in an action of foreclosure to render judgment against the person liable for the mortgage debt for any deficiency that may remain after selling the land and applying the proceeds. (2 R.S. 191, § 154.) That, however, is not a distinct and independent cause of action, but is an incidental remedy, dependent wholly upon the statute and subsidiary to the main object of the action. Before the passage of the Revised Statutes the court had no power to include a provision for deficiency in a decree of foreclosure. (Dunkley
v. Van Buren, 3 Johns. Ch. 330; Jones v. Conde, 6 id. 77.)
The nature of an action to foreclose a mortgage was considered by us in Dudley v. Congregation of St. Francis (138 N.Y. 451). In that case the mortgage was void, but the debt that it was given to secure was valid, and hence the plaintiff insisted that he should recover upon the bond, which was covered by the allegations of the complaint in the usual form. "In an action to foreclose a mortgage." as we said when discussing the subject in that case, "a judgment for deficiency is authorized and may be rendered as incidental to the principal relief demanded, but it cannot be rendered in an action where the plaintiff fails to establish the mortgage. The peculiar statutory provisions applicable to actions of foreclosure above referred to indicate that it was never intended to permit the joinder in the same complaint of two separate causes of action, one at law to recover a personal judgment on the bond for the debt, and the other in equity to procure a sale of the land covered by the mortgage, given to secure the same debt and the application of the proceeds thereon, and if not, then the complaint in this case does not contain but a *Page 90 
single cause of action, and that in equity, for the foreclosure of the mortgage lien. It is true that the giving of the bond is stated, but that is incidental to the main facts alleged and only necessary, if at all, for the purpose of showing the consideration of the mortgage and the amount of the deficiency, if any. When the plaintiff failed to establish the mortgage he failed to establish his cause of action in its whole scope and meaning, and he could not stand upon the incidental allegations in regard to the bond."
Hence the deficiency judgment, if one had been entered and docketed, would not have been a "final judgment for the plaintiff * * * in an action to recover any part of the mortgage debt." No action has been brought to recover any part of the mortgage debt, within the meaning of the statute, for the suit to foreclose the mortgagor's equity of redemption in the two salt lots was not such an action.
The opinions below make further discussion unnecessary, and we affirm the judgment appealed from, with costs.
GRAY, O'BRIEN, BARTLETT, and MARTIN, JJ., concur; PARKER, Ch. J., and HAIGHT, J., not voting.
Judgment affirmed.