Hauselt v. Patterson — 4 N.Y.S. 772

Majority

p. 772

Hauselt v. Patterson et al.

(Supreme Court, General Term, First Department.

January 28, 1889.)

Headnote

Mortgages—Deficiency Judgment—Liability of Heir.

Under 1 Rev. St. N. Y. p. 749, g 4, providing that, whenever any real estate subject to a mortgage shall descend to the heir of the mortgagor, he shall discharge such mortgage himself, without resorting to his ancestor’s estate, unless the mortgage debt is directed by the ancestor’s will to be paid from his estate, the mortgagee can maintain an action for the amount of a defieiencyjudgmentdirectlyagainstthe heir.

Appeal from special term, Hew York county.

Action by Charles Hauselt against Elizabeth Patterson, Christopher Pine, and others, to enforce a deficiency judgment recovered by plaintiff against the executors of John H. McCunn, deceased, upon the foreclosure of a mortgage executed by the said McCunn to plaintiff against defendants, the heirs of said McCunn, and their grantees. Judgment dismissing the complaint, and plaintiff appeals.

Argued before Van Brunt, P J., and Daniels and Bartlett, JJ.

Kauffman & Sanders, for appellant. Christopher Fine and Preston Stevenson, for respondents.

In December, 1854, one John H. McCunn made and executed his bond in the penal sum of $10,000, to the City Eire Insurance Company, conditioned for the payment of $5,000, which bond was secured by a mortgage upon premises 406 West Twenty-Third street, in the city of Hew York. In July, 1872, McCunn, being a resident of the city of Hew York, died seised in fee of said premises, and also of other real estate, in value over its incumbrances of nearly $300,000. The said McCunnleft him surviving certain heirs at law, upon whom this real estate descended. Such heirs accepted such real estate, having subsequently executed conveyances of inter

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est therein. In August, 1873, the City Fire Insurance Company commenced an action for the foreclosure of this mortgage, making the executors, heirs at law, etc., of said McCunn defendants, and such proceedings were had that a judgment of foreclosure of the premises mortgaged was entered. The premises were sold, and after payment of the taxes and liens, and the costs and expenses of foreclosure, nothing remained out of the proceeds applicable to the payment of the bond and mortgage;' and in November, 1881, a judgment for deficiency of $7,606.54 was duly entered in favor of the plaintiff against the executors of said McCunn. This action was commenced in July, 1885, against the heirs of said McCunn and their successors, to recover the amount of said deficiency. Subsequent to the commencement of said action leave was granted to the plaintiff to maintain the action, and said order was entered mina pro tuna as of the date of the original bringing of the suit. Upon the trial, the complaint was dismissed, and from the judgment thereupon entered this appeal is taken.

The ground upon which the plaintiff seeks to maintain his action against the heirs of McCunn is that such right of action is given by section 4, vol. 1, p. 749, Rev. St., which is as follows: “Whenever any real estate subject to a mortgage, executed by any ancestor or testator, shall descend to an heir, or pass to a devisee, such heir or devisee shall satisfy and discharge such mortgage out of his own property, without resorting to the executor or administrator of his ancestor or testator, unless there shall be an express direction in the will of such testator that such mortgage be otherwise paid.” It is to be observed that the liability created by this section is entirely separate and distinct from that which is created by section 32, p. 452, 2 Rev. St., which makes the heirs and devisees of every person who has died respectively liable for the debts of such person to the extent of the estate which shall have descended or been devised to them by such person. In the case at bar it is urged that the heirs of John II. McCunn, by accepting the real estate which descended to them upon his death, became personally and individually liable by force of the section first above referred to for the amount secured by the mortgage upon the premises in question. It seems to us that a very brief consideration of the relation of the parties to this real estate, and the obligations raised by the statute, will show that the contention of the plaintiff is well founded. It seems to be clear that the mortgagee had a right to collect the amount due upon this bond from the estate of John H. McCunn, and that the fact that he had a mortgage to secure said bond would be no defense to any such claim. Under the decisions where this section came in question it is distinctly intimated that it was not the design of this statute to deprive a party of his right to enforce this personal liability. It is distinctly asserted that the creditor has the right to pursue his remedy, as though that statute had never existed, against the estate of the deceased obligor in the bond. Wright v. Holbrook, 32 N. Y. 587 . It is asserted that the sole object of the statute was to change the rule of the common law, under which the heir and devisee had a right to call upon the representative of the decedent to pay off the mortgage.

This being the case, the holder of the bond and mortgage having the right to collect from the estate of the deceased obligor if he so desired, let us see for a moment what obligation then arose between the estate of the deceased and the persons upon whom the real estate had descended. It is clear that the estate of the deceased person would have a right, after having paid the amount of this bond and mortgage, to recover the same by force of the statute in question from the heirs at law of the deceased, because the heir, under these circumstances, had received the real estate, and had not complied with the obligations which the statute had imposed upon them, namely, to discharge the indebtedness out of their own property. The personal estate of the deceased mortgagor had become only secondarily liable, and the primary liability for the discharge of this mortgage was upon the persons who had received the real

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estate upon which it was a charge; and the estate, having paid this amount •„ at the demand of the creditor, had undoubtedly its action over against the heirs to recover back the amount. This condition is plainly suggested in the sections already cited. Sucli being the legal rights of the parties in case the holder of the bond and mortgage seeks to recover from the estate of the deceased obligor, it is clear that there is an obligation upon the part of the heirs to pay and discharge this debt, and such obligation naturally runs to the holder of the obligation for the debt, although the holder might resort to the original debtor, and recover from him, yet thereby the obligation of the heir to pay is not discharged. We have, then, a case of an obligation upon the part of the heir to pay, which has been created by the statute upon the heir’s acceptance of the real estate which has descended to him, and this necessarily implies an obligation to pay to the person who owns the debt. We have, then, a case entirely within the provisions of the case of Lawrence v. Fox, 20 N. Y. 268 ; and it is no answer to the claim upon the part of the creditor who seeks to enforce this statutory liability directly from the heir to assert that there is no privity of contract between them. This is an obligation arising under the statute in favor of the creditor, and the creditor has the same right to pursue the same directly as though the heir had received this real estate from the representatives of the deceased upon a distinct contract to pay the debt. This obligation is personal to the heir, and if he accepts the real estate descended upon him, and exercises rights of ownership, he takes it with the obligation created by this statute, and which he can only discharge by the payment of the debt. This obligation creates no lien of itself upon the real estate mortgaged, or upon any real estate of the testator which has descended, but simply a contract obligation to pay a debt existing. So far as the liability of this statute was concerned, the grantees or devisees or the heirs at law of such heir are not responsible. The estate of an heir at law is undoubtedly liable, as it would be for any other contract debt of such heir, but such liability, as has been already observed, does not follow the real estate of the mortgagor, except so far as it may be specially pledged by the mortgage itself. We are aware of the authorities cited upon both sides in support of the various contentions which have been presented upon this appeal. But it does not seem that the question has been suggested before, or that it has ever been adjudicated upon.. The obligations arising under this section seem to be so clear that the only conclusion which can be arrived at is the one which has been above suggested. The judgment, therefore, so far as it dismissed the complaint against any one of tife heirs of John H. McOunn who were living at the time of Ills death, or the personal representatives of any such heirs as have died, was erroneous, and must be reversed, with costs to the appellant, to abide the event; and the judgment, so far as it dismissed the complaint as to any of the grantees of any one of those heirs and their devisees or heirs, must be affirmed, with costs. All concur.

Cases cited

Wright v. Holbrook 32 N. Y. 587 N.Y. p. 773
Lawrence v. Fox 20 N. Y. 268 N.Y. p. 774