p. 229in November, 1877. Judgment of foreclosure was had December 24, 1877, and the mortgaged premises were sold April 29, 1878, under the decree in that action, for $1,000, leaving a deficiency of $4,137.04, for which judgment was entered against the defendants in the foreclosure suit. Execution was thereupon issued, and returned wholly unsatisfied; no taxes were paid on the premises after the year 1869, and no interest on the moneys secured by the mortgage, after the year 1873 ; neither the administratrix of Daniel Bedell, the guarantor, nor any of his next of kin or heirs at law, were made parties to the action to foreclose the mortgage in question, nor did it appear that they had any notice of the action.
The petitioner asked leave to prosecute the representatives of the widow, Lydia Bedell, and the surviving next of kin of the guarantor, to recover the amount of such deficiency.
The petition having been granted, and an order entered in accordance therewith, George S. Bedell, Emma A. Benson, individually and as executrix, &c. of Lydia Bedell, and Louisa R. Snyder, appealed therefrom.
J?. -27. Dana (Dana <& Clarkson, attorneys), for the appellants.
This permission to bring a suit is applied for under 2 R. S., 191, § 153, and whether it shall be granted must be determined on the merits, and is discretionary with the court (Equitable Life Ins. Co. v. Stevens, 63 N. Y. 341 ; Eagle v. Underhill, 3 Edw. Ch. 250 ; Suydam v. Bartle, 9 Paige, 294). This section of the Revised Statutes applies to guarantors, and those who have assumed the mortgage, as well as to the mortgagor (Pattison v. Powers, 4 Paige, 549 ; Scofield v. Doscher, 72 N. Y. 491 ). The application should have been made in Kings county (Code of Civ. Pro. § 982-984); especially as the venue is laid there (Id. § 769). It is also irregular for that reason, and
p. 230because it is not subscribed by the petitioner or' an attorney of this court, by a person who says that he is attorney in fact for petitioner (Hall v. Sawyer, 47 Barb. 117 ). The petitioner does not show a sufficient excuse for not making the representatives of Daniel Bedell parties to the foreclosure suit. The guaranty was to Enos Collins alone, and did not pass to his representatives or assignees (Smith v. Starr, 4 Hun, 123 ).
Albert Mathews for the petitioner, respondent.—
The petitioner must be authorized by the court to bring the suit (2 R. S., p. 191, § 153; Schofield v. Doscher, 72 N. Y. 491 ). A widow is deemed next of kin within the meaning of the statute (Ins. Co. v. Hinman, 4 Abb. Pr. 313 ; S. C. on appeal, 34 Barb. 410 ). In such actions the plaintiff may recover the value of all the assets received by all the defendants in the suit, if necessary to satisfy his demand (2 R. S. p. 451, § 24). It is doubtful if the appellants could have been made parties to the foreclosure suit (L. 1863, p. 658, c. 392, § 1; Code of Civ. Pro. § 484 ; 2 R. S. p. 191, § 154; Id. p. 452, § 32; Leonard v. Morris, 9 Paige, 92 ; Erwin v. Loper, 43 N. Y. 521 ; Rhodes v. Evans, 1 Clarke v. Ch. 171; Shaw v. McNish, 1 Barb. Ch. 328 ; Baggot v. Boulger, 2 Puer, 169; Selover v. Coe, 63 N. Y. 428 ). It was at least doubtful if the petitioner was not bound to exhaust his remedy against the mortgaged premises before making claim under the statute against the appellants (Halsey v. Reed, 9 Paige, 455; Mersereau v. Ryers, 3 N. Y. 263 ; Bache v. Doscher, 41 Superior Ct. 155; Schaff v. O’Brien, 7 N. Y. Weekly Dig. 349). Where it is doubtful if a third person is liable in the foreclosure suit, he may be prosecuted separately at law even at the same time (Suydam v. Bartle, 9 Paige, 296); it is not like an application to proceed “at law” during the pendency of the proceeding “in chancery” to foreclose the mortgage
p. 232sideration the circumstances, and to exercise a sound discretion in granting or refusing the application, and that the remark of the Chancellor Walworth in Suydam
v. Bartle, 9
Paige, 294, that when it is evident “ that the complainant could have had a perfect remedy against all persons who were liable for the payment of the debt by a decree over "against them for deficiency, if he had chosen to make them parties to his foreclosure suit, it might not be a proper exercise of discretion for the court of chancery to permit any further proceedings to be had in the action at law after the filing of the bill of foreclosure” was equally applicable, where the application for leave to sue is made after decree, and in the course of the opinion of the court of appeals in the case first above cited, the court says it is not difficult to see that cases might arise in which leave to sue upon the bond should not be granted upon any terms. The mortgagee may have so acted as to induce the party liable for the deficiency to refrain from protecting the property at the sale, and the property, though amply sufficient to pay the mortgage debt, may have been bought in by the mortgagee for a trifling, sum. Other circumstances might exist which would induce the court to withhold its leave to sue upon the bond.” These cases establish that the petition in this case is to be disposed of by the exercise of a sound discretion.
We think there is no reason to doubt, but that the appellants might properly have been made parties to the action for foreclosure, with a view to charge them personally, in proportion to the assets received by them, with any deficiency that might accrue. Their liability arose out of the obligation of their intestate and ancestor, to wit, the covenant of guaranty executed by him on his assignment of the mortgage to enforce the guaranty against his estate, through them ; they might
p. 233properly have been made parties under the act of May 4, 1863, and
2 Rev. Stat. p. 19, § 154.
But whether this was so or not, we think the facts in this case disclose equitable reasons for denying the application. The liability on the guaranty accrued on December 1, 1869. It is shown apparently without contradiction that the mortgaged premises were then of sufficient value to realize the amount due, that the original mortgagee, Harriet Ann Miller, had by a subsequent reconveyance assumed the payment of the mortgage, and that her subsequent grantee had also assumed the same, and that both were at that time solvent and responsible, and have since become insolvent.
It also appears that default in payment of the interest was made in the year 1873, and that the taxes on the premises were suffered to remain unpaid after the year 1869 ; that no claim was presented upon the guaranty against the estate of Daniel Bedell under the advertisement of the administratrix, for such claims ; that neither her representatives nor any of his next of kin were made parties to the foreclosure, nor did it appear that any notice of such foreclosure was given to them.
The premises were sold under the foreclosure decree for the sum of $1,000, not enough to extinguish the interest and taxes, leaving as a deficiency an amount larger than the original mortgage. It may be that upon all these facts, no strictly legal defense to the action would arise, but it must be apparenkthat the extreme negligence of the petitioner and his assignor has operated to put the appellants in a position where the enforcement, of this large deficiency against them would be greatly inequitable and unjust. The petitioner seems to have so acted by his great delay as to deprive the appellants, who stand in the relation of sureties, of their remedies over against other parties who were personally bound for any deficiency, and
p. 234also, not only to have prevented them from protecting the property at the sale, but to have subjected them to serious loss by reason of its depreciation, if they are now held responsible for the deficiency.
These circumstances seem to us quite abundant to call for a denial of the petition.
It is urged that a right of action against the appellants exists upon the guaranty and upon their liability as distributees independently of the statute.
It is not necessary for us to consider that question further than to say that if the position be well taken, that alone is a sufficient answer to this application, because, if the petitioner have such rights there was no necessity of applying for an order of the court, and the order should not be granted, inasmuch as it might be, in such case, a serious embarrassment to the appellants.
We are of the opinion that the order of the court below should be reversed, and the motion denied, with $10 costs and disbursements.