p. 12The People’s Trust Company, Appellant, v. Joseph Gomolka and Others, Defendants, Impleaded with Eugene B. Howell, as Receiver of the Long Island Real Estate Exchange and Investment Company, Respondent.Headnote
Mortgage—foreclosure —• proper parties defendant — payment to assignor subsequent to assignment.Where, after the assignment of a mortgage, the mortgagor pays interest to the assignor without notice or knowledge of the assignment, the assignee may make his assignor a party defendant to a suit of foreclosure for the purpose of recovering the payments received by him.
As such suit is in equity, an assignor who receives the payments after the assignment is a proper, although not necessary, party defendant.
Moreover, such assignor is made a proper party defendant by an allegation that he has some lien or interest which, if it exists, accrued subsequent to the mortgage and is subordinate thereto.
Appeal by the plaintiff, The People’s Trust Company, from an interlocutory judgment of the Supreme Court in favor of the defendant Eugene B. Howell, as receiver, etc., entered in the office of the clerk of the county of Queens on the 12th day of June, 1907, upon the decision of the court, rendered after a trial at the Queens County Special Term, sustaining the said defendant’s demurrer to the complaint on the ground that it does not state facts sufficient to constitute a cause of action, and also on the ground that it improperly unites two causes of action.
T. Ellett Hodgskin, for the appellant.
Robert H. Wilson, for the respondent.
The real estate mortgage which the plaintiff is foreclosing by this suit was assigned to it with the. bond by the defend'ant The Long Island Real Estate Exchange and Investment Company, the mortgagee therein, who is the demurrant. The complaint alleges that the defendant mortgagor claims that after such assignment to •the plaintiff, and without notice or knowledge thereof, he made
p. 13certain payments on the said bond and mortgage to the said mortgagee, and prays that the amount thereof may be ascertained, and that it be adjudged that the said mortgagee (or its receiver, he being made a party) pay tire same to the plaintiff. This is manifestly all germane to the foreclosure of the mortgage. The mortgagor is entitled to be credited by the plaintiff with all payments so made by him to the said mortgagee after it assigned the-bond and mortgage to the plaintiff. The amount of such payments must be ascertained, and the said mortgagee is a proper party to that inquiry, and therefore a proper party to this suit. The case of
Reynolds v.
Ætna Life Insurance Co. (
28 App. Div. 591 ) is similar to the present one.
The right to demur is quite different in equity to what it is in a common-law action. In equity it is not necessary that all parties defendant be necessary parties, as in an action at law; it suffices that they are proper parties. A cause of action has to be alleged against the main defendant or he may demur, but one brought in merely as a proper party is in a very different position. He may be made a party only because he has some claim^or controversy which is germane to the main issue. And if the controversy cannot be completely decided without bringing in another party, the trial court may suspend the trial until he be brought in (Code Civ. Proc. § 452).
It seems to have been overlooked also that this complaint contains the usual allegation that each of the defendants has or claims to have some lien or interest which, if it exists, accrued subsequent to the mortgage and is subordinate thereto, and which is enough to make a defendant a proper party.
The judgment should be reversed.
Woodward, Jerks and Miller, JJ., concurred; Rich, J., dissented.
Interlocutory judgment, with costs, reversed, and demurrer overruled, with costs.