Wolfers v. Duffield — 25 N.Y.S. 374

Majority

p. 374

WOLFERS v. DUFFIELD et al.

(Supreme Court, General Term, First Department.

October 13, 1893.)

Headnote

Mortgage Foreclosure—Distribution op Surplus — Stay op Proceedings.

Distribution, of the surplus proceeds of a mortgage foreclosure sale will not be stayed until one claiming as sole heir and next of kin of the grantor of an adverse claimant can bring to trial a pending action to set aside for fraud the deed from her ancestor to such adverse claimant, since all questions as to the alleged fraud can be determined in the distribution proceedings.

Appeal from special term, New York county.

Action by Gustavus Wolfers against John J. Duffield and others to foreclose a mortgage given by defendant Duffield to plaintiff' on premises situate on the corner of Seventy-Eighth street and Second avenue. After the property had been sold under foreclosure, Mary J. Vaughan filed a claim to all the surplus money, and moved to stay the proceedings for the distribution thereof until trial could be had of an action brought by her in 1877 (15 years before the action to foreclose was brought) to set aside a deed of the premises from her father to one John Hayes. From an order denying the motion said Mary J. Vaughan appeals.

Affirmed.

The facts as to the action by Miss Vaughan to set aside the deed are as follows: On November 15, 1876, Thomas Vaughan, the father of Mary J. Vaughan, conveyed the premises to one John Hayes, whose deceased wife was the daughter of said Thomas Vaughan. The conveyance was alleged to have been without any consideration whatever, and to have been obtained by fraud. On the day after such conveyance was made Thomas Vaughan died. In May following, Miss Vaughan, who was then his only heir at law and the sole beneficiary under his wifi, brought suit against Hayes, by her guardian, she being . then an infant, to set aside the conveyance, alleging that at the time it was made Thomas Vaughan was utterly incapacitated from attending to any business whatever, and that ■ it was procured by Hayes by fraud. Issue was joined, but the action has not been brought to trial. At the time of the conveyance to Hayes the premises were subject to a mortgage of $15,000 to Gustavus Wolfers, plaintiff in the foreclosure suit, which had until Jtdy 22, 1878, to run. The first installment of interest on that mortgage, after the death of Vaughan, amounting to $525, came due on January 22, 1877. Hayes failed to pay the interest, and early in April the mortgage was foreclosed in a suit in which Wolfers was plaintiff and Hayes was the only defendant, Hayes not' answering, and the premises were sold, by virtue of the judgment

p. 375

of foreclosure obtained by default on July 11, 1877, to defendant John J. Duffield. At the time of the conveyance to Duffield he gave back to Wolfers a mortgage for $15,000, which is the mortgage foreclosed in this suit.

Argued before VAN BRUNT, P. J., and PARKER, J.

Bliss & Schley, (W. T. Schley, of counsel,) for appellant

P. H. Vernon, for respondent.

As in the surplus proceedings all questions as to the fraudulent character of the conveyances can be tested, there seems to be no reason why these proceedings should be stayed until the revival and trial of an action commenced 16 years ago. The appellant in that action would have no right to a trial by jury if it is an action to set aside a conveyance as fraudulent. If the appellant’s action is for the recovery of damages for fraud and deceit, a recovery in the action would in no way establish any lien upon the surplus moneys in the proceeding. The order appealed from should be affirmed, with costs.