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Colgan v. Dunne

3 N.Y.S. 309 Court N.Y. Sup. Ct. Decision date 1888-12-13 English

Delivered by Pratt, J.

Contents

Majority

p. 309
Colgan v. Dunne et al.
{Supreme Court, General Term, Second Department.
December 13,1888.)

Headnote

1. Limitation of Actions—Running of Statute—Mortgage—Foreclosure — Defi-
ciency Judgment.
An action against legatees for the amount of a deficiency judgment rendered on foreclosure of a mortgage given by testator to secure a bond, is based on a sealed instrument and exists independently of Code Civil Proc. N. Y. §§ 1837-1841, authorizing a creditor to recover to the extent of the legacy received by his debtor’s legatee, and is barred only at the expiration of 20 years from the maturity of the bond.
2. Mortgages—Foreclosure—Deficiency—Liability of Legatees.
The legatees, to the extent of their legacies, are liable for the full amount of the deficiency judgment, though a portion of the proceeds of sale were applied to the costs of foreclosure, instead of to the reduction of the debt.
Appeal from circuit court, Kings county.
Jane Colgan, administratrix of the estate of Anthony Davin, .deceased, brought this action against Patrick Dunne and others, legatees under the will of Michael Dunne, deceased, to recover the amount of a deficiency judgment rendered upon the foreclosure of a mortgage executed by said Michael Dunne. The bond and mortgage were dated August 17,1865, and due three years from date. The deficiency judgment was rendered December 5, 1882, and this action was commenced in December, 1885. Judgment for plaintiff, and defendants appeal.
Argued before Barnard, P J., and Dykman and Pratt, JJ.
WUliam, M. Benedict, for appellants. William J. Carr, for respondent.

Appellant contends that the action is not based upon a sealed instrument, but upon the statute liability created by sections 1837-1841, Code Civil Proc., and that it accrued in 1872, when the estate was distributed, and that it is barred by the six-year or by the ten-year limitation. We think the right to pursue the legatee for the debt of the testator exists independent of the statute. Courts of law and courts of equity have from the earliest times sustained the creditor’s right to satisfaction of his debt from the assets of testator in the hands of the -legatee. Bract. Bom. Law, bk. 2, c 26, fol. 61; 2 Bl. Comm. c. 32; 6 Bac. Abr. “Legacies,” h.; 2 Bedf. Wills, § 56; 1 Washb. Beal Prop. c. 3, § 73; Watkins v. Holman, 16 Pet. 25 ; Noel v. Robinson, 1 Vern. 90-94; Newman v. Barton, 2 Vern. 205; Nelthrop v. Hill, 1 Ch. Cas. 136. The theory is that the testator cannot cut off the right of his creditor to satisfaction of the debt from testator’s estate. In form the action is against the legatee. In substance it is against the property of testator in defendant’s hands. The statute regulates the procedure, but does not create the right. It follows that the action must be regarded as brought upon a sealed instrument, and the period of limitation is 20 years. That period has not elapsed since, the execution of the bond and mortgage. The introduction of the deficiency judgment did not injure defendant. The effect of that proof was to limit the plaintiff’s recovery; not to enlarge it. Proof of the mortgage and its recitals established a cause of action for $3,000 and interest. By introducing the judgment in foreclosure, plaintiff, in effect, showed that, except as to the amount of the judgment, the bond and mortgage were paid. It cannot be said justly that defendants are held liable for the costs of that suit. Proper statement would be that a portion of the proceeds of sale being used to defray the expenses of the foreclosure that amount was not applied to the reduction of the mortgage debt, which therefore remained a liability for which defendants must respond. Judgment affirmed, with costs. All concur.

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