Lenihan v. Hamann

Headnote

Proceedings in bankruptcy against mortgagee or owner of the equity of redemption of mortgaged premises do not suspend action in a State court already commenced for the forelosure of the mortgage, and, unless restrained by injunction from the United States Court in bankruptcy, the plaintiff may proceed to judgment in the action and a sale of the mortgaged premises. The foreclosure suit does not become defective for want of parties by the institution of the bankrupt proceedings, and -where no assignee in bankruptcy is appointed before the final judgment in such action, the judgment is regular, and a purchaser under it acquires a good title as against the mortgagor or owner of the equity of redemption, parties to the action, and all parties claiming or to claim under them, including any assignee in bankruptcy that should thereafter be appointed.

Appeal from an order of General Term affirming order of Special Term denying motion on the part of William A. Martin to be released from a purchase of certain real estate sold under judgment herein.

The action was for the foreclosure of a mortgage. After the commencement of the action, before final judgment petitions in bankruptcy were filed against the owners of the equity of redemption, but at the time of perfecting final judgment no assignee had been appointed. Upon sale William A. Martin became the purchaser of the mortgaged premises. He made a motion to be discharged from his purchase upon the ground that the title was defective by reason of the commencement of such proceedings in' bankruptcy. Held as above.