Court Opinion

ID: 3593598
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:41:34.58133+00
Date Added: 2024-06-11T13:39:20.195033
License: Public Domain

Five objections are mainly urged by the counsel for the appellants, to the right of Koon to the surplus moneys in this case.
1. That the judgment confessed by Gilmore to Van Wagner is void, on the ground that the statement upon which it is entered, was not in conformity with the code.
2. That previous to the sale in June, 1857, by the sheriff, on the execution issued upon the judgment in favor of Van Wagner, that judgment had been paid and satisfied.
3. That the lien of the judgment had been extinguished by the judgment of foreclosure and sale in the action commenced by Platt, to foreclose his $700 mortgage upon the Eighth avenue property, to which action Van Wagner had been made a party defendant.
4. That it was the duty of Van Wagner to have collected the amount of his judgment out of the Ninth avenue property; and that having released the same, he is now precluded from a resort to the Eighth avenue property for that purpose.
5. That Van Wagner, and those claiming under him, are estopped from enforcing this judgment against the Eighth avenue property, on the ground that at the time of the sale under the Platt mortgage and the purchase of the premises by Southard, it was announced that there were no other liens upon the premises than the two mortgages to Myer and Quackenbush, and that Van Wagner did not then assert the lien and validity of his judgment, as he was bound to do. These objections will be considered in the order stated.
1. The defectiveness of the statement contained in the judgment. It authorizes a judgment to be entered for the sum of $1,475, for a debt justly due to the plaintiff arising upon the following facts:
  "Dec. 1st, 1852. Money was lent by the plaintiff to the defendant to aid in purchasing a lot in Forty-seventh street, to the amount of ________    $200 00
  "Aug. 1st, 1853. A balance was due to plaintiff by defendant on the purchase of Eighth avenue lot to ________________________________________     800 00 *Page 441
"May 1st, 1854. Money was lent by the plaintiff to defendant to aid in purchasing lots on Ninth avenue to _______________________________________    $300 00
"May 1st, 1854. And cash was lent by the plaintiff to the defendant at different times since above to __________________________________     175 00 _________ $1,475 00
Which sum of one thousand four hundred and seventy-five dollars is now due by the defendant to the plaintiff, the interest on said sum having been paid till the date hereof.
   "Dated NEW YORK, 29th December, 1854. "(Signed.)                     ROBERT GILMORE."
And which statement is duly verified by his oath. mc
If this statement does not conform to the requirements of section 383 of the code, it is difficult to perceive how one can be drawn which would. The code requires the statement to be verified, and to contain 1st. The amount for which the judgment may be entered, and an authority to enter judgment therefor.
2. If it be for money due, it must state concisely the facts out of which it arose, and must show that the sum confessed therefor, is justly due. It is incontrovertible that all the matters required by the first subdivision of this section are contained in this statement. It states the amount for which the judgment may be entered, and authorizes its entry. The judgment being for money due, it also states concisely the facts out of which it, that is the indebtedness of the defendant to the plaintiff, arose. And the statement must show that the sum for which the judgment is confessed, is justly due. These facts are here given in great detail, and assuming, as we must, that they are truly stated, they show conclusively that the defendant, on the day he authorized the entry of this judgment, was justly indebted to the plaintiff in the sum named therein. The dates of the separate indebtedness, and the cause thereof are specifically stated, and could not well have *Page 442 
been more accurately given. This remark does not of course, apply to the last item of $175, of cash lent to the defendant by the plaintiff from the 1st of May, 1854, to December 29th of that year. In Lanning v. Carpenter (20 N.Y. 447), and in Freligh
v. Brink (22 id. 418), we held the statements sufficient which declared that the debt was for money borrowed by the debtor of the creditor, without any specification of time or separate amounts. We have frequently affirmed the doctrine of those cases, and we see no reason to depart from the rules there laid down. The statement in the judgment must therefore be deemed a compliance with the provisions of the code, and as not subject to impeachment for the cause suggested. And the difficulty presents itself, which is fatal to the attempt of Southard to impeach the validity of this judgment. It was a good judgment as between the parties, and before any attempt was made by any party who had a right to challenge it, Koon became a purchaser at a sale under an execution issued upon it, and paid the purchase money, and took his deed for the premises. The judgment cannot now be impeached collaterally. (Miller v. Earle, 24 N.Y. 110; Neusbaum v.Keim, id. 325.)
2. It is urged that the sale on the 13th of June, 1857, to Koon, by virtue of the execution upon the Van Wagner judgment, passed no title to him of the premises sold, for the reason that the judgment had been previously paid and satisfied. It is a sufficient answer to this objection to observe that the referee has found, as matter of fact, that the judgment held by Van Wagner was not in fact paid, or in any way actually satisfied. As this finding is conclusive upon this court, it is unnecessary to examine the testimony adduced before the referee, to ascertain whether it sustains such a finding. We assume it to be so, and that disposes of this objection.
3. It is urged that the lien of Van Wagner's judgment was extinguished by the judgment of foreclosure and sale, in the action instituted by Platt to foreclose his $700 mortgage *Page 443 
on the Eighth avenue property, Van Wagner being a party defendant in that action. That mortgage bore date May 4, 1855, and the premises were then subject to the previous mortgages to Myer and Quackenbush, and to the general lien of Van Wagner's judgment, and to the mortgage to Southard of May 29th, 1855, and to the mortgage to Van Wagner of June 7th, 1855. The two latter mortgages being subsequent liens to Platt's mortgage, and the two other mortgages and Van Wagner's judgment being prior liens, Southard and Van Wagner were made parties defendant upon the allegation in the complaint that they had, or claimed, some interest in the premises, which interest or lien, it was charged, if any, had accrued subsequently to the lien of the mortgage to Platt, the plaintiff. It was such subsequent lien only that it was sought to foreclose and cut off and affect by the foreclosure and sale. The complaint did not seek to disturb or affect in any way the liens on the premises prior to that created by the plaintiff's mortgage. The object sought was to obtain payment and satisfaction of that mortgage, by a sale of the mortgaged premises, and to effectuate that intention it was necessary to make a good title to the premises, to the purchaser at such sale. This could only be done by making the holders of subsequent liens parties to such foreclosure, and thus terminating and putting an end to their respective liens. In this manner the lien of Southard, which he had by virtue of his mortgage, was extinguished, and that of Van Wagner, created by the mortgage to him, was also extinguished, as were also the liens of all subsequent purchasers or incumbrancers. The surplus moneys arising upon the sale were all absorbed by Southard in the payment of his mortgage, the next lien upon the premises after that in favor of Platt, the plaintiff in the action. Van Wagner's mortgage was thus removed from, and ceased to be a lien upon, said premises, by reason of this foreclosure, and without the payment of any thing to him on account thereof. This disposes of an argument urged before the referee, *Page 444 
that the lien of the judgment had been extinguished because the amount of it had been included in the mortgage. If the mortgage had been paid or satisfied by the act of the mortgagee, there would have been force in this suggestion, but as it was extinguished by means of this foreclosure and sale, without the pretence of payment of any part thereof, the judgment remained wholly unaffected, by reason of the taking of the mortgage. Van Wagner was only made a party to the foreclosure under which Southard's purchase was made, as having an interest subsequent, and which subsequent lien he only had by virtue of his mortgage subsequent to the mortgage, and the decree or judgment in that action did not affect his right to enforce his judgment, which was a prior lien to the foreclosed mortgages. (Lewis v.Smith, 11 Barb. 156; Id. 5 Seld. 502; Bank of Orleans v.Flagg, 3 Barb. Ch. R. 318; Story Eq. Pl. § 259; Elliott v.Pell, 1 Paige, 263; Holcomb v. Holcomb, 2 Barb. 20.)
Lewis v. Smith was an action of ejectment to recover dower. The defendants set up in bar to the action a decree in a foreclosure suit, and a sale pursuant thereto — the defendants claiming and holding title from the purchaser at that sale. The mortgage was executed by the husband of Mrs. Lewis, she not joining therein, and she was made a party defendant, and was duly served with process to appear and answer, and also with a notice that no personal claim was made against her. It was alleged in the bill that the defendants therein named had, or claimed to have, "some interest in the mortgaged premises as subsequent purchasers or incumbrancers, or otherwise," and the prayer was that all the defendants might be foreclosed of all equity of redemption and claim of, in, and to the said premises. The judge, at the circuit, held the foreclosure suit was conclusive against the plaintiff, and that the defendant was entitled to judgment. The supreme court reversed the judgment — holding that she was not called upon by the allegations of the complaint to answer as to her claim of *Page 445 
dower in the mortgaged premises; that such right was superior, and prior to the lien created by the mortgage; and that the allegations of the complaint pointed only to liens or claims subsequent to that created by the plaintiff's mortgage; that she was justified in the belief that these interests of hers were not designed by the complainants to be brought into litigation in that suit. Lewis v. Smith was brought to this court, and the judgment of the supreme court affirmed. (5 Selden, 502.) InCorning v. Smith (2 Seld. 82), it was held by this court that where one claims adversely to the title of the mortgaged property, and prior to the mortgage, he cannot be made a party defendant in a bill to foreclose a mortgage for the purpose of trying the validity of such adverse claim, and the decree made disposing of such claim will be held erroneous, and will be reversed, though made after a hearing upon pleadings and proofs.
In the case of The Bank of Orleans v. Flagg (3 Barb. Ch. Rep. 318), the Chancellor said: "The bill in this case was not properly framed. To enable the plaintiff to litigate that question (that was priority over a lien or claim superior to that of the mortgage), instead of alleging falsely, that he had or claimed an interest in the premises which had accrued subsequent to this mortgage, the bill should have stated that he claimed an interest under a contract, or a pretended contract to purchase prior to the mortgage."
In the present case, Van Wagner was the owner and holder of two liens upon the mortgaged premises, one prior to the mortgage sought to be foreclosed, and the other subsequent. He was made a party defendant under the allegation that he claimed an interest in the mortgaged premises, arising subsequently to that created by the mortgage. He had only to answer that allegation, and by confessing the complaint, he was only concluded, as to such subsequent lien. The complaint property took no notice of the prior lien, and it was therefore unaffected by any allegation in it, or by anything done in the action. It is a well settled *Page 446 
rule in equity pleading, that no facts are in issue, unless charged in the bill; nor can relief be granted for matters not chargeable, for the court pronounces its decree, secundumallegata et probata. (Story's Eq. Pl. § 269.)
In Elliott v. Pell (1 Paige, 263), the chancellor said: "The decree made upon the bill and answer must be taken with reference to the matters then in litigation before the court, and cannot be construed to affect the rights of any of the parties to the lands which were not the subject matter of litigation in that suit." In Eagle Fire Company v. Lent (6 Paige, 635), the chancellor declares the rule emphatically to be, that, so far as mere legal rights are concerned, upon a bill of foreclosure, the only proper parties to the suit are the mortgagor and mortgagee, and those who have acquired rights or interests under them subsequent to the mortgage. And the mortgagee has no right to make one who claims adversely to the title of the mortgagor, and prior to the mortgage, a party defendant for the purpose of trying the validity of his adverse claim of title in this case. And he says, the case is analogous in principle to making one who claims adversely to the vendor a party to a bill filed by the vendee for the specific performance of the contract of sale. In which case it has been held that such adverse claimant cannot be made a party for the purpose of having the validity of his claim settled by a decree of this court, which shall thereafter be binding upon him, in relation to his claim of title. (Lange v.Jones, 5 Leigh's R. 192.) The precise question now presented was adjudicated in Holcomb v. Holcomb, (2 Barb. S.C. 20.) Perry, the holder of a mortgage prior to that sought to be foreclosed, was made a party defendant to an ordinary bill to foreclose a mortgage. The complaint contained the usual allegations, that he (Perry) was made a party defendant, as a subsequent purchaser or incumbrancer; and it was sought to divest him, by the decree in the cause, of a title which he claimed to hold adversely to the parties to the mortgage, and which he acquired under a lien *Page 447 
prior to the conveyance by the plaintiff to the mortgagee. The court say: "It is a general rule that, besides the parties to the mortgage, those only are proper parties to a suit for its foreclosure who have, subsequent to the mortgage, acquired rights or interests under the mortgagor or mortgagee. The plaintiffmay also make prior incumbrancers parties to the bill, for the purpose of having the amount of such incumbrances liquidated and paid out of the proceeds of the sale; or he may, at his option, have the premises sold subject to such prior incumbrances. The object of the bill is to vest in the purchaser, under the sale made by virtue of the decree of foreclosure, the same title which the mortgagor had at the time of the execution of the mortgage. * * * In this case, if, instead of making Perry a defendant, under the general allegation that he claimed an interest in the premises `as subsequent purchaser, incumbrancer or otherwise,' the facts upon which the plaintiff relies to defeat the title of the defendant Perry had been alleged in the bill, he might have demurred to the bill upon the ground that the plaintiff had no right to bring him into court upon this bill of foreclosure, to try the validity of his title to the mortgaged premises."
In the case at bar, the plaintiff in Platt's foreclosure suit did not make Van Wagner a party as a prior incumbrancer, admitting the validity of the prior lien, and seeking only to have ascertained its amount, to the end that it might be paid and discharged out of the proceeds of the sale of the mortgaged premises, but he only sought to have foreclosed liens subsequent to that created by his mortgage. Under a decree made where the complaint contained allegations similar to those in the present case, prior liens or incumbrances are wholly unaffected, and it presents no bar or impediment to a party to such decree, from enforcing such prior lien or incumbrance. Such is the view taken by the legislature, when declaring the effect of a foreclosure in chancery, when it is declared that the deed to be executed by the master, "shall vest in the purchaser *Page 448 
the same estate (and no other or greater) that would have vested in the mortgagee if the equity of redemption had been foreclosed, and such deeds shall be as valid as if the same were executed by the mortgagor and mortgagee, and shall be an entirebar against each of them, and against all parties to the suit,
in which such sale was made, and against their heirs respectively, and all claiming under such heirs." (2 R.S. 192, § 158.) This court said, in Lewis v. Smith (supra), in reference to this section of the revised statutes, that, taking all the expressions together, it is obvious that the "entire bar," which is spoken of, refers to rights and interests in the equity of redemption, and does not embrace interests which are paramount to the title of both mortgagor and mortgagee. Such interest would be other and greater than would have vested in the mortgagee, if the equity of redemption had been foreclosed.
There is nothing in conflict with this doctrine in the case ofDrury v. Clark (16 How. Pr. Rep. 424); and that case is in harmony with it. In alluding to the points contended for by the defendant in that case, Judge EMOTT observes that if they are maintained, the plaintiff will be compelled to state a variety of issues to different defendants; issues in which he has no interest, and to await their determination among the defendants, whom he is bound to make parties. This should not be permitted, if possible, and is not, I think, required. The complaint before us states that these various defendants have or claim each some interest in or lien upon the mortgaged premises; but, in every case, such lien or interest is subsequent and subject to the plaintiff's mortgage. He states sufficiently all that is necessary for the plaintiff's purpose. The fact that these defendants have or claim some interest in the lands mortgaged, makes them proper parties to the foreclosure; and the fact that these interests are subsequent to the plaintiff's lien, renders it unimportant to him, or to the purposes of his suit, so long as that is confined to the foreclosure and sale under his mortgage, what the particular rights of these *Page 449 
defendants are. They are only interested in the eventual surplus, if any, and their respective interests are material only among themselves, and not to him. All that the plaintiff asks, is a foreclosure of his mortgage against their estates or interests; and it is sufficient for that purpose, and to justify making them parties, that they have or claim some interest, or estates in the premises; but these, whatever they are, are subject to his mortgage. Any detail of their titles, or the extent and relative priority of their interests, would be superfluous if the suit is confined to the first mortgage, and the judgment proceeds no further.
It must be deemed, therefore, to be well settled, upon principle and authority, that the decree or judgment in the Platt foreclosure suit, in no sense, affected or impaired the validity of Van Wagner's judgment, or the lien created by it, and presented no obstacle to the subsequent sale of the premises covered by that mortgage, under the execution issued upon that judgment.
It is also insisted that it was the duty of Van Wagner to collect the amount of his judgment out of the Ninth avenue property; and that having released that property from the lien of his judgment, he was precluded from resorting to the Eighth avenue property for that purpose. The general rule undoubtedly is, that when a party holds a lien upon several parcels of property, and seeks to enforce it, equity will compel him to resort to the property, in the inverse order of its alienation, when the same may have been in the meantime alienated. And if the holder of such lien has notice of the rights or equities of others, or releases from the operation of his lien, property primarily liable for it and adequate for its discharge, he cannot thereafter resort to that portion of the property subject to his lien, secondarily liable for its payment. In the case now under consideration. Platt had purchased property worth $4,400 beyond the five prior mortgages or incumbrances, except the judgment; and Southard had bought property worth $2,150 beyond the two prior mortgages or incumbrances *Page 450 
thereon, except the judgment; and they both bought at the same time and place. Before Southard obtained his deed, Van Wagner released to Platt, who had become the purchaser of the Ninth avenue property on a sale upon a foreclosure of his mortgage thereon, all his right and interest in said property. The effect of such release was to discharge the Ninth avenue property from the effect and lien of Van Wagner's judgment, and leaving it to rest solely on the Eighth avenue property. Southard, as the mortgagee of that property, by virtue of his mortgage, dated the 29th of May, 1855, had a superior equity to Platt, under his mortgage dated the 13th of July, 1855, on the Ninth avenue property, to have the latter property first applied to the payment of the Van Wagner judgment. A mortgagee is an alience to the extent of his mortgage, quite as much as a grantee. (Kellogg v. Rand, 11 Paige, 59, 64.) Southard, therefore, by virtue of his mortgage, had an equity to insist that the Ninth avenue property, that aliened by Gilmore, should be first applied to the payment of the Van Wagner judgment. But this equity terminated when his mortgage was discharged, by the credit to him of the amount thereof in his purchase of the Eighth avenue property, subject to the Van Wagner judgment. That judgment was a lien on both parcels, and to be paid proportionally by each. The utmost that can be urged is that the release of Van Wagner discharged the Ninth avenue property from its proportionate part of the amount of that judgment, leaving the Eighth avenue property to respond to its proportionate part. It did not have the effect, as contended for by the counsel of the appellants, to discharge and satisfy the judgment wholly. A portion remained due in any aspect, and a sale by virtue thereof passed a good title to the purchaser. It was not a sale under a paid or satisfied judgment. Koon being a bona fide purchaser, therefore, acquired title to the premises, and as such owner was entitled to the surplus moneys arising upon the sale of the premises in this action. He holds the same under *Page 451 
a prior title to that of Southard, whose title was subordinated, to the one which he acquired.
There remains to be considered the fifth objection, namely: That Van Wagner, and those claiming under him, are estopped from enforcing this judgment against the Eighth avenue property, on the ground that at the time of the sale under the Platt mortgage, and the purchase of the premises by Southard, it was announced that there were no other liens upon the premises than the two mortgages to Myer and Quackenbush, and that he did not then assert the lien and validity of his judgment as he ought to have done. The facts, as found by the referee, bearing upon this point, are that the sale, at which Southard purchased the Eighth avenue property, was made in fact subject to the two mortgages to Myer and Quackenbush, and that no other liens were announced at the sale; that Van Wagner was present at the sale; that Southard had no actual notice of the Van Wagner judgment when he bid on the foreclosure sale, and paid his ten per cent. for the Eighth avenue property, but he knew of it some months before he took his deed or paid the balance of his bid. And the referee found, as a conclusion of law, that the omission of Van Wagner, at the sale on the foreclosure, to give notice of his judgment, did not estop him now, or those claiming under him, from setting up the same. It is to be observed here that the referee has not found, as claimed, that it was announced at the sale, that there were no other liens upon the premises than the two mortgages to Myer and Quackenbush.
If Van Wagner had, at the sale, announced that his judgment was not a lien, or remained silent when such an announcement had been made, I think he would have been estopped from afterwards claiming it to be a lien. But the referee does not find that anything was said at the sale about the lien of the judgment, and therefore Van Wagner was not called on to say anything in relation to it. But a complete answer to this objection is, that before Southard *Page 452 
completed his purchase he had full knowledge of all the facts. It appears that Southard, although he did not know of the existence of the Van Wagner judgment when he bid at the foreclosure sale and paid his ten per cent, yet he did know of it some months before he took his deed and paid the balance of his bid. He was not, therefore, a bona fide purchaser, without notice of the judgments. If he had not elected to take the property subject to the judgment, and he had purchased it under such circumstances as would entitle him to have the property relieved from the lien of the judgment, the court, on his application, would have released him from his bid, and directed a return to him of the ten per cent paid. He cannot now be permitted to set up that he did not know of the existence of this lien, after having elected to complete his purchase with full knowledge of it. Upon the facts found by the referee, there is no ground for applying the rule of estoppel as recognized and approved by this court in Thompson
v. Blanchard. (4 N.Y. Rep. 303.)
Southard's executors are not personally charged with the costs of the proceeding by the order appealed from, and on this appeal we cannot review the adjustment of costs. We cannot look into the adjustment to ascertain that any items have been allowed not authorized by the code. The sum at which they were adjusted must necessarily include the expenses of the two references and hearings before the referee, and there is nothing to show in the appeal papers that the sum was arbitrarily fixed. The judgment directs that the costs be paid by the appellants, executors of Thomas Southard, deceased; and this is a direction to pay the same out of the assets of the deceased in their hands, and not that the executors should pay the same personally. (3 R.S. 5th ed. p. 555, § 317.)
The order appealed from should be affirmed.
Order affirmed. *Page 453