Riesgo v. Clark

This action was brought to foreclose a second mortgage upon certain premises owned by the Glengariffe Realty Company, the mortgagor. There were made parties defendant to this action James F. A. Clark and others, as survivors of the firm of Clark, Ward & Co., in liquidation, as persons having, or claiming to have, some interest or lien upon the mortgaged premises which had accrued subsequent to the lien of the mortgage and was subject and subordinate thereto. This complaint contained the usual allegations, including that required by section 1639 of the Code of Civil Procedure, which was as follows:

“That no; other action has been had for the recovery of the said sums secured by the said bond and mortgage or any part thereof.”

These defendants, James F.

The action being at issue, it came on for trial at the Special Term on the 9th of January, 1906, when the counsel for the defendants submitted an affidavit that he was engaged in the trial of a case in another branch of the court, and that he would be engaged in such trial for the remainder of the week, and for that reason he asked for a postponement of the trial of the case. This motion was denied, and the plaintiff thereupon called a witness who testified that he was an attorney and counselor at law and represented the plaintiff in loans made to them. The bond and mortgage was then introduced in evidence, and the plaintiff testified that he was present at the time the mortgage was given, and -that $100,000 was at that time advanced by the plaintiff to the Glengariffe Realty Company. At this point Mr. Cleveland, who was counsel for the appellant, appeared and stated that since the 13th of November he had been continuously' engaged in the trial of a case. In answer to a question by the court, he stated that he would probably be engaged for two days more, stating to the court that he would be very likely able to get off from the other trial on the following day or the day after. Counsel for the plaintiff opposed an adjournment upon the ground that there was another installment of interest upon the first mortgage which would become due on the 1st day of February, which the plaintiff would be required to pay if there

“If you will not undertake to enter Into that understanding, the inquest may now proceed.”

This being assented to, the court stated that the trial would stand over until the next day, the case to be considered on trial to be taken up the next morning. The next morning Mr. Cleveland again appeared and made an application to further adjourn the case, as he could not leave the other trial in which he was engaged. The court stated that, in view of what had happened the day before, he did not think the case should be further delayed. There was some further discussion between counsel and the court about a proposed amendment to the answer of these defendants, plaintiff’s counsel apparently making no objection to the proposed amendment; but, counsel for the other defendants objecting, the court denied the motion to amend the answer, to which there was an exception. Whereupon Mr. Cleveland stated, “I propose to take no further part in this trial,” and left the courtroom, and the court proceeded with what was called an inquest, which the plaintiff had commenced the day before. Evidence was then offered, proving that the plaintiff had paid six months’ interest and also insurance; that the defendant had paid nothing on account of the principal of this mortgage, but had paid $8,000, one year’s interest, on the 15th of March, 1905; that he had made a computation of interest upon the amounts which were due; and that the net amount of principal due, after deducting all payments, was $99,136.89, which, with the interest paid on the former mortgage and the insurance and interest thereon, makes a total of $107,808.50. The defendant offering no testimony, the court directed a judgment of foreclosure and sale. From this judgment the defendants have appealed.

It is doubtful whether the defendants have a right to appeal from the judgment entered under these circumstances. After the application of defendant’s counsel to adjourn the trial and for an amendment was denied, he withdrew from the trial and it proceeded without him. But, assuming that they have a right to appeal, as no exception was taken to the evidence, the only question presented is raised by the exception to the conclusions of law which was subsequently taken by these appealing defendants, and by the exception to the fourteenth finding of fact, which found that no other action had been had for the recovery of the sums secured by the said bond and mortgage or any part thereof, upon the ground that there was no evidence to support it. We think that the court was justified in refusing to postpone the trial. The day that the case was first on for trial, the attorney for these defendants entered into an implied agreement with the court that he would appear on the next day and continue with the trial without objection. The trial was considered commenced, to be continued on the next day. When the case was called on the following morning, the counsel was bound by his agreement, and was bound to make arrangements to continue the trial, or, if he could not do so because of" his engagements,

The only question, therefore, that requires any consideration is whether the allegation of the complaint that no other action had been commenced to recover the amount due upon this bond and mortgage was required to be proved, in the face of a denial of knowledge or information sufficient to form a belief as to that fact. By the bond given by the mortgagor it acknowledged itself indebted to the plaintiff in the sum of $100,000. It gave to the plaintiff a mortgage upon its real property to secure the payment of that sum. Whether or not the plaintiff had instituted any other action for the recovery of the sum secured by the said bond and mortgage was no part of the plaintiff’s cause of action, which was upon the bond and the mortgage to secure the payment of the amount due on the bond. Whether or not the plaintiff had realized from any source any money which could be applied to reduce the amount secured by this bond and mortgage was an affirmative defense, so that it cannot be said that this allegation constituted any part of the plaintiff’s cause of action. Section 1629 of the Code of Civil Procedure provides that:

“The complaint, in an action to foreclose a mortgage upon real property, must state whether any other action has been brought to recover any part of the mortgage debt, and, if so, whether any part thereof has been collected.”

This allegation is not made a part of the plaintiff’s cause of action by any provision of the Code. It does not seem that a mere denial of knowledge or information sufficient to form belief by the defendants of that allegation, when inserted, raises an issue, so that the plaintiff must prove the fact alleged before being entitled to judgment, especially where a defendant withdraws from the trial of the case. The fact that at the time the execution of the bond and mortgage the amount secured thereby was actually paid to the mortgagor, and that the plaintiff had received on account of the principal a small sum of money, which was credited, and that the balance was due upon the mortgage, proved the plaintiff’s cause of action, and upon that proof, in the absence of any defense offered by the defendants, the plaintiff was entitled to judgment. I do iiot understand that existence of a former proceeding to recover the amount secured to be paid by a bond and mortgage would of itself be a defense, and this provision of the Code seems to require the insertion of such an allegation in the complaint for the information of the court upon the trial, and not to raise an issue which, by the mere denial of the allegation, would require the plaintiff to prove the negative of an affirmative defense. It would seem to be analogous to those cases where a formal allegation is required in a complaint, but of which no proof is required upon the trial, like an allegation of a breach of a contract to pay a sum of money, where it is essential that the plaintiff should allege a breach of the contract of

A consideration of the language used in the Code shows clearly the object of this provision. The complaint must state whether any other action has been brought to recover any part of the mortgage, and, if so, whether any part thereof has been collected, the clear intent being to compel the plaintiff to allege in the complaint the facts to show that no part of the mortgage has been collected; but, the mere maintenance of a former action not being a defense, the failure of the plaintiff to prove that no action had been commenced would not be a ground for refusing to award the plaintiff a judgment. If the complaint had alleged that an action had been brought on the bond, but nothing had been recovered, the complaint would not have been demurrable, nor w.ould such an allegation in an answer be a defense; but I think the proof upon the trial was sufficient to justify the finding that no action had been commenced in which any sum had been collected which was applicable to the payment of the amount due on the mortgage. • The evidence was that the amount specified in the bond had been actually paid to the mortgagor when the mortgage was executed; that the plaintiff had received a sum of money, a part of which was applicable to the payment of the principal of the bond; that the only sum that had been paid by the mortgagor to the plaintiff was the sum of $5,000, of which $4,136.89 was payable for interest and $681.11 was credited on the principal, leaving a net amount of principal due, after allowing that deduction, of $99,133.89. This was direct proof that the plaintiff had received nothing on account of the principal, except this sum of $681.-11, which was credited upon the principal, and for the balance of the principal, with the other payments to which the plaintiff was entitled to judgment, judgment was awarded. It seems to me, therefore, that this proof was sufficient to sustain the finding that no other proceeding had been instituted to collect the amount due upon this bond and mortgage, from which anything had been received which could be credited thereon, and that upon this the plaintiff was entitled to judgment. No case has been cited upon the construction to be given to section 1629 of the Code, as it does not appear that such' a claim has ever been before made.

It follows that the judgment appealed from must be affirmed, with costs. All concur.