Union Dime Savings Institution v. Duryea — 67 N.Y. 84

Majority

p. 84

The Union Dime Savings Institution v. Joseph W. Duryea et al. Gibbons L. Kelty et al., Respondents, and Henry C. Bispham, Appellant.

Headnote

Under the provision of the Code (§ 282), authorizing the court where, upon appeal from a judgment, an undertaking requisite to stay execution has heen given, to exempt by order from the hen of such judgment real estate upon which it is a lien, and to direct an entry on the docket of judgment that it is “ secured on appeal,” and declaring that thereupon such judgment shall cease, during the pendency of the appeal, to he a lien upon the property so exempted “as against purchasers and

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mortgagees in good faith,” one who has, during the pendency of the appeal, taken a mortgage “ in good faith ” upon property so exempted, in payment of an antecedent debt, is protected, and his mortgage has a preference over the judgment.

It is not necessary for him to show that he parted with value on the faith of the mortgage.

Weaver v Barden ( 49 N. Y., 286 ) and Barry v. White (52 id., 138) distinguished.

(Argued September 20, 1876;

decided October 3, 1876.)

Appeal on the part of defendant, Henry C. Bispham, from order of the General Term of the Supreme Court, in the first judicial department, reversing an order of Special Term, respecting the distribution of surplus money arising upon a foreclosure sale in this action. (Hem. of decision below, 3 Hun, 210 .)

The facts sufficiently appear in the opinion.

Beny. T. Kissam for the appellant.

Alexander Ostrander for the respondents.

The respondents were bona fide holders of the mortgage for a valuable consideration. (Cary v. White, 52 N. Y., 138 ; Weaver v. Barden, 49 id., 286 ; King v. Harris, 34 id., 330; Brown v. Leavitt, 31 id., 113; Wood v. Obessin, 13 id., 509; Wood v. Robinson, 22 id., 564; Boyd v. Cummings, 17 id., 101; Ayrault v. McQueen, 32 Barb., 305 ; Stettheim v. Meyer, 33 id., 215; Caldwell v. Hicks, 37 id., 458; Padgett v. Lawrence, 10 Paige, 170; Peck v. Mallams, 10 N. Y., 545 ; Lawrence v. Clark, 36 id., 128; Bk. of N. Y. v. Vandervoorst, 32 id., 553.) The appellant’s lien, which was suspended when the docket of his judgment was marked “ secured on appeal,” was not restored by the order for anew trial as against respondents. (King v. Harris, 34 N. Y., 330 ; Weaver v. Barden, 49 id., 286; Cary v. White, 52 id., 138.)

This is a controversy about surplus money arising upon the foreclosure of a mortgage. The important facts are as follows: Hay 1, 1871, the defendant Allen conveyed the

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land to the defendant Keech, subject to the mortgage foreclosed, and took back a mortgage for a portion of the purchase-money. March 17, 1873, defendant Bispham recovered a judgment against Keech for upwards of $1,200, which was on the same day docketed in the county clerk’s office. From this judgment Keech appealed and gives the usual undertaking upon the appeal. July 28, 1873, an order was made by the court directing an entry to be made on the docket, “ secured on appeal,” and the entry was so made October 15, 1873. While the docket was thus marked and the appeal was pending, Keech executed a mortgage on the land for upwards of $1,200 to the defendants Kelty & Oo.

A reference was made to ascertain the rights in the surplus money, and the above facts appeared. All parties conceded 'that the Allen mortgage should be first paid, and Bispham and Kelty & Go. each claimed a preference in the balance. The referee decided against the claim of preference made by Bispham, and he filed exceptions which were sustained at Special Term. Kelty & Oo. appealed to the General Term and there the order of the Special Term was reversed, and the decision of the referee affirmed, thus giving the mortgage of Kelty & Co. preference over the judgment of Bispham.

The decision of the General Term is clearly right. The Code (§ 282), provides that where there has been an appeal from a judgment, and an undertaking requisite to stay execution shall have been given, the court may, upon motion, by order exempt from the lien of the judgment the real property upon which the judgment is a lien, and in such case direct the entry, “ secured on appeal,” to be made in the docket, and that “ thereupon such judgment shall cease during the pendency of such appeal to be a lien upon the property so exempted as against purchasers and mortgagees in good faith.” The respondents having taken their mortgage while the judgment was thus secured and the judgment debtors’ real estate exempted from its lien, they are protected if they took their mortgage m good fcdth. It was not requisite for them to have parted with value at the time, provided they took their mortgage

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fairly and honestly, and for full value. That they acted in good faith is not questioned, and their antecedent debt furnished a good and full consideration. There are cases arising under the recording acts and cases in which a purchaser of property seeks the protection of a court of equity as against the legal title or a prior equity, where the party must show not only that he is a purchaser in good faith, but for value actually parted with on the faith of the purchase, and in such cases a mere precedent debt does not ordinarily furnish a sufficient consideration. (Weaver v. Barden, 49 N. Y., 286 ; Cary v. White, 52 id., 138.) But here Bispham did not have any legal or equitable right as against a class of persons to which the respondents belonged. The object of the statute was to permit the judgment debtor in such a case to deal with his property as if the judgment had never been a lien thereon, upon the sole condition that the purchaser or mortgagee shall act in good faith.

Other suggestions contained in the brief submitted on the part of the appellant have been duly considered, and they are either wholly groundless, or were in no form made in the court below.

It follows that the order must be affirmed, with costs.

All concur.

Order affirmed.