Court Opinion

ID: 6122366
Source: CourtListenerOpinion
Date Created: 2022-02-04 20:06:17.063692+00
Date Added: 2024-06-11T08:23:47.296689
License: Public Domain

Learned, R. J.:
The plaintiff appears to rest his right to the injunction on two propositions: one that he is a subsequent incumbrancer; the other that he has the use of the real estate for a certain time, and has agreed to apply the profits to the liquidation of his claims and to pay portions of the incumbrance.
First, then, as subsequent incumbrancer; and in that view, as to piece number one. The defendant holds a judgment of foreclosure and sale for $2,000, to which the plaintiff was a party; the defendant holds the next lien, a mortgage which is unpaid, $53,000. The plaintiff holds the third mortgage, given to him before the foreclosure was commenced, and in respect to which undoubtedly he *462was made a party to the foreclosure. The equity of redemption was cut off by the foreclosure. If he had any defense or ground oí equitable relief he should have set it up in that action. As a mere third mortgagee there is no reason why he should stay the sale. The same person holds the first and second mortgages. The holder of the third mortgage clearly cannot as such claim to be subrogated to the first. If he could, then, after he asserted that claim the holder of the second mortgage could claim the same right and could be subrogated back again. As mere third mortgagee, especially after a judgment of foreclosure to which he was a party, his rights are protected by the opportunity to purchase at the sale or to pay up beforehand.
Next, as to piece number two. Here the plaintiff holds the second incumbrance. But in this case also his equity of redemption has been cut off by the foreclosure and judgment. We have then the case simply of a second mortgagee, who has been made a party to the foreclosure of the first mortgage and against whom, with the other defendants, a judgment of foreclosure and sale has been perfected. Such a mortgagee claims to be subrogated, and for that purpose seeks to stay the sale. There is no doubt of his right to redeem. (Jenkins v. Cont. Ins. Co., 12 How., 66.) Assuming even that lie may sometimes have the right of subrogation, and even of an assignment, as necessary thereto (see Ellsworth v. Lockwood, 42 N. Y., 89), this right must depend on circumstances showing its equity. (Jenkins v. Cont. Ins. Co.) Now in this case the plaintiff, as second mortgagee, does not show that the payment of the first mortgage by him, or the foreclosure or the sale will work him any injustice. If the first and second mortgages did not cover the value of the property, and there were a third mortgagee who would receive the benefit of a discharge of the first mortgage, some equity would be shown. But nothing of that kind appears. And from the fact that the $1,000 note was the purchase-price of this number two, it seems improbable that there can be any value remaining beyond the second mortgage. Furthermore it is shown by the defendant’s affidavit that number two is especially valuable in connection with number one. There should, therefore, besóme strong reason shown for depriving the defendant of his present judgment of sale against both.
*463Secondly. The plaintiff claims as a party in possession who has agreed to pay the incumbrances, or some part of them. There is nothing in the papers which shows that Wilkinson & Peters, trustees of Samuel W. Barnard, had any right or interest whatever in the matter or that they ever had any estate in the premises. The only facts then, material to this motion are, that after the judgments of foreclosure the plaintiff, by agreement with the mort gagor, was to pay such portions of the incumbrances as were necessary to protect the title, and he was to have the use of the land for three years and seven months, and to apply the profits to the liquidation of his claims. If the mortgagor, after his equity of redemption had been foreclosed, could make any valid agreement of this kind, still this difficulty appears, that so far as can be judged from the papers, the plaintiff did not stand in the position of a surety. He was to receive the profits for a certain space of time, and, as it would seem, he was for that consideration actually to pay off such incumbrances as it might be necessary to pay, in order to protect the title. He is not a tenant, paying rent, but he appears to be one who has purchased a term of years for the consideration of paying off certain incumbrances. That is, he agreed with the mortgagor to pay off these incumbrances, in consideration that he might have the use and profits for a.certain time. If he should only take an assignment of the mortgages he would have paid the mortgagor nothing for the term leased to him. The only ground of Averill v. Taylor (8 N. Y., 44) is, that the mortgagor and lessor was bound to protect his lessee against the mortgage. Here the lessee has assumed to pay the mortgage instead of leaving that duty to rest on the mortgagor. Indeed, the very circumstance that this agreement (or lease) was made after a foreclosure, and by persons parties thereto, indicates that the mortgagor did not thereby assume to protect the lessee; but rather the lessee, the mortgagor.
To these considerations must be added those which have been already stated, touching the rights of the defendant as intermediate mortgagee of number one, and touching the value of number two, in connection with number one.
And it may be said generally, that a very strong case should be made to induce the court to stay proceedings after a foreclosure and sale, in behalf of a person who was himself a party to that *464foreclosure; especially when such stay is asked upon transactions which have taken place between parties defendant to that foreclosure, since the judgment therein was granted.
Under all the circumstances of this ease I think that the order appealed from should be reversed, with costs, and the motion for an injunction denied with costs.
Present — Learned, P. J., Bockes and Boardman, JL
Order reversed with ten dollars costs, and printing, and motion denied with ten dollars costs. Order to be entered as of January Term.