Purdy v. Wilkins — 95 Misc. 706

Majority

p. 706

Edward C. Purdy, Plaintiff, v. Mayme D. Wilkins, Sometimes Known as Mayme De Ware, et al., Defendants.

(Supreme Court, Albany Special Term,

June, 1916.)

Headnote

Foreclosure — of mortgages — sale in — what constitutes primary fund for payment of mortgage debt — when sale set aside — liens.

Mortgaged premises constitute the primary fund for the payment of the mortgage debt and only where the mortgagee has endeavored to collect the same out of the land can a just judgment for deficiency be entered.

Upon a sale on the foreclosure of a mortgage for $950 upon several pieces of property in which the equity was sworn to be from $5,000 to $12,000, plaintiff bid in the property for $1,300

p. 707

and entered a deficiency judgment for $1,085.93 because under his bid there was not enough money to discharge back taxes and water rents amounting to $1,191.69, expenses of sale $87.50, and unpaid costs $20.81. The prior liens against said premises exclusive of unpaid interest amount to $12,800. On motion to set aside the sale, held, that plaintiff having neglected to foreclose against one of the properties was in no position to enter a judgment for deficiency, and that the sale should be set aside and a resale ordered on the ground that the price at which plaintiff bid in the property was grossly inadequate.

Motion to set aside a judgment of foreclosure and sale.

Charles B. Templeton, for defendant Wilkins, for motion.

Crawford & Cogan (Henry J. Crawford, of counsel), for plaintiff, opposed.

The defendant, Mayme D. Wilkins, a colored woman, kept a disorderly house, and owned subject to incumbrances several lots, three on Dallius street and three on Madison avenue, viz., 49, 51 and 53 in the city of Albany. In making some improvements she became in debt to the plaintiff, and thereafter she executed a mortgage covering all of the above premises; in the sum of $950 to secure the debt. The mortgage has been foreclosed. In the proceeding the referee to compute the amount due reported $970.36. A sale was had, and the plaintiff bid 'the properties foreclosed in for $1,300, took title and thereafter entered a judgment of deficiency for $1,085.93. The deficiency arose because under the bid there was not enough money to discharge back taxes and water rents, amounting to $1,191.69, expenses of sale $87.50, and unpaid plaintiff’s costs $20.81. The prior liens against

p. 708

these premises exclusive of some unpaid interest amount to $‘12,800.

Thomas J. Graveline, who has qualified as a public expert on values, and whose interest in the affairs of an easy victim of business capacity is not apparent, swears the fair value of all these properties is $24,500 — nearly twice as much as there is against them. There is too-—not to be overlooked — the judgment of deficiency" resulting from the amount of the $1,300 bid. There can only be a just judgment of deficiency where the mortgagee has endeavored to collect the debt out of the land pledged. It constitutes the primary fund for the payment of the debt. Here it seems undisputed that the plaintiff neglected to foreclose against No. 51 Madison avenue, and therefore is in no position to enter a judgment for deficiency. Spring v. Haynes, 21 Maine, 126.

The injustice of the plaintiff’s conduct becomes apparent when an execution issued upon such judgment is used to take the defendant’s household furniture, and that at a time when because of the unlawful trade she pursued she was sentenced to jail and banished the city. The plaintiff should have his money, but he ought not to take more of the defendant’s property than is necessary in satisfaction. I think the proceeding for a deficiency is unjustifiable; that the sale of a property for $1,300, whose equity is sworn to be worth from $5,000 to $12,000, is grossly inadequate. Under all the circumstances I cannot free myself of the conviction that the erring woman, because of her infirmities of character, caught in legal toils, is being shorn'. The power of the court in the premises, by a very learned and sound judge, is described as follows: “Courts of equity exercise a supervision of sales made under their decrees, which is not in all cases controlled by legal rules, but may be guided by con

p. 709

siderations resting in discretion. They may set aside their own judicial sales, upon grounds insufficient to confer upon the objecting party an absolute right to a resale. They may relieve against mere mistakes, accidents or hardships, or oppressive or unfair conduct of others’ though such conduct may not amount to a violation of law.” Fisher v. Hersey, 78 N. Y. 389 .

Provoked to the exercise of discretion, the court sets aside the sale in foreclosure herein and orders a resale.

Ordered accordingly.