Darmstadt v. Manson

It is contended that the premises involved in the foreclosure action were worth enough to have met all of the charges against them. The defendants, whether they knew of the judgment of foreclosure or not, had no real or apparent interest in the sale of the premises, since the plaintiffs, by failing to proceed in the usual way, through no fault of the defendants, took the risk of selling under the judgment which they had procured. As this did not require the defendants to protect themselves against deficiency by bidding upon the property or otherwise, it would seem to be unjust to permit them now to come in and sue upon the bond. It has been universally held that section 1628 of the Code of Civil Procedure confers no absolute right upon a plaintiff to sue separately, after a foreclosure, a person liable for the mortgage debt, and who might have been made a party to the foreclosure action, but that the right to do so should be granted only when satisfactory reasons are shówn why the personal liability .was not prosecuted in the foreclosure suit itself. It was pointed out by Judge Rapallo in Equitable Life Ins. Society v. Stevens, 63 N. Y. 341 , 345, that under the Revised Statutes, “so far * * * from its being made compulsory on the court to grant such permission in all cases, the general rule was against it, and special circumstances must be shown to justify a separate proceeding at law.” And in Scofield v. Doscher, 72 N. Y. 491 , it was said that the “aim of the statute is to dispose of the matter in one proceeding.”

We find in the record no special reasons given why the defendants, two years after the premises had been sold under a judgment which might have charged them with liability for a deficiency and required them at that time to protect themselves against a sale of the property for less than the liens against it, should now be called upon to answer in an action at law for a recovery upon the bond. The plaintiffs, by their own neglect, have placed the defendants in a different position than they would have occupied two years before—in a position which the plaintiffs cannot, in the nature of things, restore; and, having elected to stand upon their judgment and to sell the premises, it would be unjust to these defendants to permit this action. They have no defense. They would simply be called upon to pay the deficiency to the full extent of their obligation in the bond, even though the plaintiffs themselves may have purchased the premises at practically a nominal figure. In other words, where a plaintiff travels outside of the usual course of the law, to the prejudice of the rights of the defendant, he ought not to be permitted to avail himself of special provisions resting in the discretion of the court; and, the discretion being the discretion of the Supreme Court, we have no hesitation in saying that the order appealed from should be reversed, and

The order appealed from should be reversed, with $10 costs and disbursements, and motion denied, with $10 costs. All concur.