Court Opinion

ID: 5180377
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:41:16.339992+00
Date Added: 2024-06-11T08:26:33.128881
License: Public Domain

Van Brunt, P. J.
(dissenting) :
On the 4th of January, 1889, David W. O’Neil being the owner of certain premises in the city of New York, executed a bond containing the usual interest clause and a mortgage thereon to Joshua S. Piza, to secure the sum of $25,000. Thereafter said Joshua S. Piza assigned said bond and mortgage to one Rachel S. Piza. On the 9th of December, 1890, O’Neil conveyed the premises in question to one Abraham Steers, subject to the mortgage above mentioned. The said mortgage falling due on the 4th of January, 1892, Rachel S. Piza and the said Abraham Steers entered into an agreement reciting the execution of said mortgage and the assignment of the same, and that said Steers was the owner of the premises, by which the said Rachel S. Piza extended the time of the payment of the mortgage until the 4th of January, 1895, and said Steers agreed to pay the same.
Rachel S. Piza having died, the petitioner, Joshua S. Piza, was appointed her administrator. On the 4th of January, 1894, Steers having failed to pay the interest falling due on that day, and it remaining unpaid for the period mentioned in said bond, Joshua S. Piza, as administrator, commenced an action to foreclose the said mortgage, and made O’Neil a party thereto, claiming a judgment for any deficiency. O’Neil having put in an answer asserting his discharge by reason of the agreement to extend the time of payment of the mortgage with Steers, the action was discontinued as to him, and proceeded to a judgment of foreclosure and sale on the 10th of April, 1894, and the premises were sold at public auction for the sum of $22,000, and there was a deficiency of $6,164.24, upon which the plaintiff received the sum of $1,542.50, leaving $4,621.14 still due.
*185In January, 1896, said Piza, as administrator, made this application to the court for leave to sue O’Neil upon the bond for the amount of this deficiency. In O’Neil’s affidavit in opposition, he alleges the fact that at the time of the malting of the agreement extending the time for the payment of the mortgage, the premises in question were worth $35,000, and that he was discharged from liability by reason of such extension. The court below granted the motion, and from the order thereupon entered this appeal is taken.
It is well established that the granting of leave to sue upon a bond to recover a deficiency arising upon the sale of premises mortgaged to secure the payment of a bond, is not a matter of right, but rests in the sound discretion of the court. (Equitable Life Ins. Co. v. Stevens, 63 N. Y. 341; United States Life Ins. Co. v. Poillon, 6 N. Y. Supp. 370.)
In the case at bar it appears that O’Neil was made a defendant in the action in foreclosure; that he set up his defense in that action and that the action, as against him, was discontinued, and that he had full reason to believe from this action upon the part of the plaintiff that no further claim would be made against him. He was, therefore, justified in taking no proceedings for the purpose of making the premises which were sold under foreclosure bring as much as possible, or to protect himself against a judgment for deficiency by buying them in. But the holder of the mortgage, having lulled O’Neil into security by the discontinuance of his claim for any deficiency, after he has sold the premises and a deficiency has arisen, now seeks to charge him therewith when he has no means whatever of protecting himself.
We think that, under these circumstances, it would be inequitable to allow the holder of this bond and mortgage to pursue O’Neil for the deficiency.
The order should be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.
Order affirmed, with ten dollars costs and disbursements.