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Johnson v. Putnam Foundry & Machine Co.

167 A.D. 99 Court Second Department, Decision date 1915-04-09 English

Delivered by Burr, J.:

Contents

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Beda Johnson, Appellant, v. The Putnam Foundry and Machine Company, Respondent.
Second Department,
April 9, 1915.

Headnote

Real property — action under section 1638 of tlie Code of Civil Procedure for determination of adverse claim — effect of judgment in foreclosure upon defendant having estate in land and defendant having only a judgment lien thereon — appearance equivalent to personal service.
In an action under section 1638 of the Code of Civil Procedure for the determination of defendant’s adverse claim to certain real property, it appeared that on September 5, 1899, M. was the owner in fee of the premises in question, and on that day executed a mortgage thereon to D., who died in November following and bequeathed such mortgage to
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his wife. The defendant on March 22,1900, recovered a judgment against M., which became a lien on March twenty-fourth. On June 7,1902, Mrs. D. commenced an action to foreclose her mortgage, making M., his wife and defendant parties. The latter appeared by attorney and waived service of all papers other than notice of sale, and all surplus money proceedings. M. was at that time a non-resident, and although an attempt was made to serve him by publication, the papers were defective. On December 6, 1902, a judgment of foreclosure and sale was entered against all the defendants, under the provisions of which the premises were sold to Mrs. D. and such title as she acquired passed to the plaintiff in April, 1908. Subsequently M. executed and delivered to her a quitclaim deed. Thereafter defendant, before the expiration of his judgment lien, obtained leave to issue execution against M., and attempted to convey on a sale thereunder M’s. interest in the premises.
Held, that a judgment should be directed in favor of the plaintiff; that the interest of the plaintiff, who was a mortgagee in possession, could not be sold, at least since the quitclaim deed from M., on an execution issued thereafter.
Defendant’s appearance in the foreclosure action was equivalent to due personal service, and hence the judgment and sale cut off and extinguished any lien it had upon the premises.
A sheriff’s deed given in pursuance of an attempted sale under a judgment is such a cloud upon the title acquired upon the foreclosure of a prior mortgage that an action will lie to remove the same.
There is a distinction between the interests of defendants in a foreclosure action who have an estate in the land, and defendants who have only a judgment lien thereon. As to the former, the effect of the judgment is to transfer such estate or interest. As to the latter, its effect is to bar and extinguish the lien.
Appeal by the plaintiff, Beda Johnson, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Westchester on the 12th day of November, 1913, dismissing the complaint upon the decision of the court, a jury having’ been waived.
Harold Swain [Robert W. Cromley with him on the brief], for the appellant.
J. Mortimer Bell, for the respondent.

Plaintiff appeals from a judgment dismissing her complaint upon the merits in an action brought under the provisions of section 1638 of the Code of Civil Procedure for the determina

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tion of defendant’s adverse claim to certain real property situated in the city of Mount Vernon. The case was tried before the court without a jury.

The contentions of the respective parties arise from the following undisputed facts: On September 5, 1899, Albert W. Mott was the owner in fee of the premises in question and, on that day, executed a mortgage thereon to one William M. Denman, in which his wife joined. Denman died in November following, and by his will bequeathed such mortgage to his wife, Jennie A. Denman. The defendant, on March 22, 1900, recovered a judgment against Mott in the City Court of Mount Vernon, which was docketed in the office of the clerk of Westchester county on March 24, 1900, and became a general lien upon the realty owned by Mott in that county. On June 7, 1902, Mrs. Denman commenced an action to foreclose her mortgage, making Mott and his wife and the defendant parties thereto. The latter appeared by attorney and waived the service of all papers other than notice of sale and of surplus money proceedings. Mott was at that time a non-resident, and, although an attempt was made to serve the summons in said action upon him by publication, the papers, upon which the order for such service was made, were defective. Such proceedings were had and taken in such action that, on December 6, 1902, a judgment of foreclosure and sale was entered, in form, against all of the defendants named therein, under the provisions of which the premises were sold to Mrs. Denman; and, through several mesne conveyances, such title as she had passed to the plaintiff by deed on April 13, 1908. Subsequently, and on June 12, 1909, Mott executed and delivered to her a quitclaim deed, conveying to her all of his interest in said premises, which deed was recorded in the office of the clerk of Westchester county on July 10, 1909. Before the expiration of ten years after the docketing and entry of its judgment, defendant obtained leave to issue execution against Mott, and the sheriff of Westchester county, under such execution, attempted to levy upon and, on May 6, 1910, sold at public auction and attempted to convey to it all the right, title and interest which Mott had in the premises involved on March 24, 1900, or at any time thereafter.

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We think that the difficulty in this case has arisen from confusing the interests of defendants in a foreclosure action, who have an estate in the land, with defendants who have only a lien thereon by way of judgment. As to the former, the effect of the- judgment is to-transfer such estate or interest. As to the latter, its effect is to bar and extinguish the lien. (Continental Insurance Co. v. Reeve, 135 App. Div. 737 ; Hope v. Shevill, 137 id. 86, 90.) In the latter case, Mr. Justice Thomas says: “ The purpose of an action to foreclose a mortgage is to extinguish liens and transmit through the mortgage to the purchaser on the sale the fee of the land.” The Putnam Foundry and Machine Company is such a lienor. As its hen was subsequent to the mortgage, it was a proper party defendant; and a general allegation of lien, such as was made in this case, is sufficient. (Drury v. Clark, 16 How. Pr. 424 ; Albany City Nat. Bank v. Hudson River Brick Co., 79 Hun, 387 .) The relief asked for against it was not the sale and transfer of its estate or interest in the land, for it had none, but that it be barred and foreclosed of all lien thereon. A conveyance upon a sale, made pursuant to a judgment of foreclosure, is “ an entire bar * * * against each party to the action who was duly summoned.” (Code Civ. Proc. § 1632.) Defendant’s appearance in said action was equivalent to due personal service. (See Code Civ. Proc. § 424.) The judgment in express terms provides that “each and all of the defendants * * * he and they are hereby barred and foreclosed of all * * * lien * * * in the said mortgaged premises.” Under that judgment, a sale was had and a conveyance given, under which plaintiff’s predecessor in title entered into possession of the property, and she and such predecessors have been in constant possession of the same since that time. The court had jurisdiction of the subject-matter of the action and of the person of the defendant Putnam Foundry and Machine Company. The judgment, and the sale under it, cut off and extinguished any lien that it had upon the land. (Flannery & Co. v. Baldwin Fertilizer Co., 94 Ga. 696 ; Youker v. Treadwell, 4 N. Y. Supp. 674 ; Montgomery v. Tutt, 11 Cal. 307 , 316.) A junior lienor cannot avail himself of defective service upon the mortgagor. (Semple v.
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Lee, 13 Iowa, 304 ; Fergus v. Tinkham, 38 Ill. 407 .) If it should he urged that by collusion between a mortgagor against whom are several judgments, and a mortgagee, an action for the foreclosure of a prior mortgage may be brought, to which the mortgagor and his judgment creditors are parties defendant and in which the judgment creditors only are served, and thereafter a judgment of foreclosure and sale is entered barring the latter from any interest or lien upon said premises, and that thus the mortgagor might be put in a .position where he could hold said premises subject only to the mortgage itself, it is a complete answer to the suggestion, first, that the court should not grant such a judgment; second, if it inadvertently did, the judgment was not void, but only voidable; and, until set aside, it is conclusive. (Goebel v. Iffla, 111 N. Y. 170 ; Jenkins v. Fahey, 73 id. 355, 359.) The judgment creditor had it within his power, by timely appearance in the action, to see that only a proper judgment was entered; and if erroneously an improper one was granted, to move promptly to set it aside. The judgment of foreclosure and sale here attacked was rendered in December, 1902, and no motion has been made respecting the same. But if we are entirely wrong about this, the court has found that the plaintiff, who succeeded to the interests of the mortgagee who was the purchaser at the foreclosure sale, is a mortgagee in possession. And, at least since the quitclaim deed from Mott, this finding is in accordance both with the evidence and the law. (Howell v. Leavitt, 95 N. Y. 617 ; Townshend v. Thomson, 139 id. 152, 161.) The equitable estate which has existed, at least since June, 1909, could not be sold under an execution which was not issued until March, 1910. (Bates v. Ledgerwood Mfg. Co., 130 N. Y. 200 ; German National Bank v. Queen, 159 App. Div. 236 .) The sheriff’s deed, given in pursuance of such an attempted sale, is such a cloud upon plaintiff’s title that an action will lie to remove the same. (Code Civ. Proc. § 1638.)

We think that the judgment should be reversed on the facts as well as the law, and judgment should be directed in favor of the plaintiff, with costs and disbursements of the action and of this appeal. The findings of fact numbered XII and XIII,

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respectively, are reversed and set aside. Plaintiff may submit findings of fact and conclusions of law in accordance with this decision.

Jenks, P. J., Stapleton and Rich, JJ., concurred; Thomas, J., concurred in result.

Judgment reversed upon questions of fact as well as of law, and judgment directed in favor of plaintiff, with costs and disbursements of this action and of this appeal. Findings to be submitted for settlement. Order to be settled before Mr. Justice Burr.

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