Hyperlawhypertext legal database Probesco v. Anglo-American Dry-Dock & Warehouse Co. 31 N.Y.S. 110

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Probesco v. Anglo-American Dry-Dock & Warehouse Co.

31 N.Y.S. 110 Court N.Y. Gen. Term Decision date 1894-10-26 English

Delivered by DYKMAN, J.

Contents

Majority

p. 110
(81 Hun, 389.)
In re MOORE. PROBESCO v. ANGLO-AMERICAN DRY-DOOK & WAREHOUSE CO. COCHRANE et al. v. SAME.
(Supreme Court, General Term, Second Department.
October 26, 1894.)

Headnote

Mortgages—Action for Debt Pending Foreclosure.
Under Code Civ. Proc. § 1628, providing “that, while an action to foreclose a mortgage upon real estate is pending, no other action shall be commenced to recover any part of the mortgage debt without leave of the court,” the holder of a minute fraction of a mortgage debt, after that fraction has been proved and" allowed in an action to foreclose the whole debt, will not be granted leave to sue merely for his portion of such debt.
Appeal from special term, Kings county.
Petition by James Moore against the Anglo-American Dry-Dock & Warehouse Company for leave to sue. From an order denying said petition, the petitioner appeals.
Affirmed.
An action was commenced by Thomas Cochrane and William W. Flannagan against said defendant to foreclose a real-estate mortgage, and is still pending. Thereafter an action was commenced by Samuel K. Probesco against said defendant for the sequestration of the corporate property and the appointment of a receiver, and a judgment was rendered for plaintiff. This petition was filed by the holder of 1-240 part of the principal of a debt evidenced by bonds and secured by a mortgage, for leave to bring suit at law, not for the recovery of the entire mortgage debt, but of his minute fraction thereof, after that fraction had, in an action to foreclose, been proved and allowed without contest by any other bondholder.
Argued before BROWN, P. J., and DYKMAN and CULLEN, JJ.
Everett P. Wheeler, for appellant.
Lucien Birdseye, for respondent

This is an appeal from an order made at the special term, denying the petition of James Moore for leave to sue the Anglo-American Dry-Dock & Warehouse Company. The petitioner is the owner of two bonds for $1,000 each, issued by the company. They are part of an issue of 500 bonds of $1,000 each. All of the valid bonds of this issue are secured by second mortgage to Thomas Cochrane and William W. Flannagan. In 1891 an action was commenced to foreclose this mortgage, and that action is still pending. A protracted litigation ensued respecting the validity and consideration of many of the bonds. The judgment entered was reversed in part by the general term, and a new trial was ordered before the referee. 23 N. Y. Supp. 404 .

The motion is based upon section 1628 of the Code of Civil Procedure, which is as follows:

“While an action to foreclose a mortgage upon real property is pending or after final judgment for the plaintiff therein, no other action shall be com
p. 111
rnenced or maintained, to recover any part of the mortgage debt without leave of the court in which the former action was brought.”

This statute manifests the intention of the legislature to place a restriction upon holders of bonds secured by a mortgage which is in process of foreclosure, and, unless a cogent reason is presented for the signature of the court under that section, it should be denied. In this particular case our conclusion is that all the bondholders should abide the result of the foreclosure suit, and that the order appealed from should be affirmed. All concur.