Court Opinion

ID: 5337373
Source: CourtListenerOpinion
Date Created: 2022-01-08 05:40:49.363631+00
Date Added: 2024-06-11T08:29:30.995282
License: Public Domain

Untermyer, J.
(dissenting). The single question presented on this appeal is whether section 1083-b of the Civil Practice Act applies to a guaranty, executed on June 12, 1931, of the payment of the principal and interest of a “ share or part ” of a bond and mortgage executed and delivered on June 28, 1926. The mortgage was executed simultaneously with the bond, although the guaranty of payment was not executed until several years thereafter.
Section 1077-a suspends, during the period of the emergency, actions to foreclose mortgages on account of default in the payment of principal. Section 1077-b suspends actions on bonds secured by mortgage on account of any default in the payment of principal “ if the indebtedness originated or was originally contracted for simultaneously with such mortgage and is secured solely by such mortgage, or upon any guaranty of payment of the principal or installment or amortization of principal, of any mortgage within the scope of section ten hundred seventy-seven-a or upon a guaranty of any obligation secured by such mortgage, so long as no action or proceeding shall be maintainable to foreclose such mortgage,” provided that interest at the rate prescribed shall be paid upon such bond. Section 1077-b further provides that “ No action shall be maintainable or judgment be entered during such emergency upon any guaranty of payment of any share or part of any bond and /or mortgage or group of bonds and /or mortgages represented by a certificate, bond, debenture or other instrument * * * so long as interest at the rate prescribed shall be paid.”
It seems evident to me that the Legislature differentiated between an action on a bond executed simultaneously with the mortgage and a guaranty of payment of such a bond even though not given simultaneously therewith. In the case of an action on the bond such a provision was necessary, so that only the usual bond executed simultaneously with the mortgage would be brought within the operation of the statute. In the case of an action on the guaranty of such bond this condition was not 'imposed, obviously because it was intended that a guarantor shopld occupy the same position as the maker of the bond which had been guaranteed
*102Sections 1083-a and 1083-b must be read in the light of the other sections of this emergency legislation enacted at the same time and for a related purpose. Section 1083-a provides a limitation upon deficiency judgments during the period of the emergency by requiring that the fair market value of the mortgaged premises shall be allowed against the mortgage debt. By section 1083-b this relief is extended to actions on bonds secured by mortgage maintained “ against any person or corporation directly or indirectly or contingently hable therefor.” Here again, as in section 1077-b, the Legislature has distinguished between the debt “ secured by a mortgage on real property and which originated simultaneously with such mortgage ” and an action “ against any person or corporation directly or indirectly or contingently fiable therefor.” As I read these provisions they do not apply at all unless the bond and mortgage were simultaneously executed, but if they were so executed, then they apply to “ any ” party who is “ directly ” liable as maker of the bond or “ contingently ” liable as guarantor. The manifest purpose of this was to protect, during the period of the emergency, not only the party who had executed a bond simultaneously with a mortgage, but all persons who, whether simultaneously or subsequently, had guaranteed the payment of the debt. Although the precise question was not decided in Klinke v. Samuels (264 N. Y. 144), the observations of the court in that case are equally appropriate here. “ Any other interpretation would lead to strange results. Should the defendant pay in full he could not, although subrogated to the mortgagee’s rights, recover from the mortgagor either in foreclosure or on the bond more of a deficiency than that provided in sections 1083-a and 1083-b. Again, if he had been made a party defendant in an action to foreclose the mortgage as he might have been (Civ. Prac. Act, § 1079, subd. 1, par. 7), any deficiency judgment entered up against him as it could have been (Vanderbilt v. Schreyer, 91 N. Y. 392; Hochstein v. Schlanger, 150 App. Div. 124; affd., 208 N. Y. 513), would have been limited to the equities as stated in section 1083-a of the amendment.”
The order appealed from should be affirmed, with twenty dollars costs and disbursements.
Order reversed, with twenty dollars costs and disbursements, and motion granted.