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Clark v. Simmons

8 N.Y.S. 74 Court N.Y. Gen. Term Decision date 1889-12-10 English

Decision Majority — Barnard, P. J. · Concurring — Pratt, J.,

Contents
p. 74
Clark v. Simmons et al.
(Supreme Court, General Term, Second Department.
December 10, 1889.)

Headnote

1. Foreclosure of Mortgages—Assignment—Merger.
The assignment of a second mortgage, and judgment of foreclosure thereon, to a purchaser at a previous foreclosure sale under a first mortgage, does not merge such judgment in the fee, and is no ground for vacating it, the sale thereunder being made subject to the rights of the prior purchaser.
2. Same—Judgment for Deficiency
Code Civil Froc. N. Y. § 1627, provides that final judgment, in an action to foreclose a mortgage, may award payment “ of the residue of the debt remaining unsatisfied after a sale of the mortgaged property. ” Held, that where a mortgage on land, partly in New York and partly in another state, was foreclosed in New York as to the land therein, and that land was sold, plaintiff could have judgment for deficiency without foreclosing as to the land in the other state, as the New York courts could • not order a sale of that land.
Appeal from special term, Orange county.
Action by Ann C. Clark to foreclose a mortgage against Isabella F. Simmons, and James A. Simmons, her husband. Upon consent of defendants, judgment of foreclosure was entered, and it was also provided that judgment should be entered for deficiency after sale of the mortgaged premises, which were partly in New York and partly in New Jersey. This judgment was modified so as to exclude the New Jersey land, and the land in New York was sold subject to the rights of John R Conkey, a purchaser at foreclosure sale under a prior mortgage. Meanwhile the judgment and mortgage had been assigned to said Conkey by mesne assignments. The modification of the judgment had been granted on an application by defendants to vacate it on the grounds that (1) the court had no jurisdiction to order a sale of the land in New Jersey, and (2)'the judgment had become merged in the fee acquired by Conkey. On report of the sale, a deficiency was shown against defend
p. 75
ants, and they moved for an order to stay the entry of a judgment for deficiency against them, “until the property mortgaged had been sold;” but this motion was denied, and the report was confirmed, and a judgment for the deficiency was entered. Code Civil Proc. § 1627, provides that,' in an action to foreclose a mortgage, final judgment may award payment “of the residue of the debt remaining unsatisfied after a sale of the mortgaged property.” From the order refusing the stay of entry of judgment for deficiency, and that confirming the report of sale, defendants appeal.
Argued before Barnard, P. J., and Pratt, J.
Olcott, Mestre & Gonzalez, (William N. Dykman, of counsel,) for appellants. Foster & Stephens, (Geo. W. Stephens, of counsel,) for respondent.

The plaintiff held a second mortgage on land partly in this state and partly in New Jersey. The judgment of foreclosure and sale in this action directed the land in both states to be sold. Before the sale the defendant Simmons applied at special term to have the judgment modified so as to exclude the sale of the New Jersey land. This order was made. The premises had then been sold under the first mortgage, and been purchased by one Conkey. Conkey owned the second mortgage. The defendant Simmons also asked at the special term that the judgment be vacated, because the judgment had become merged in the fee so acquired by Conkey. This part of the ruling was denied. The judgment in this action provided that the plaintiff recover a judgment for the deficiency after the sale of the New York land. This part of the judgment was consented to when the judgment was entered, and no motion was made to change the decree in this respect. The condition on the second sale, that it should be subject to Conkey’s rights acquired in the first sale, would manifestly convey a title subject to the payment of the amount due on the first mortgage. Conkey was the purchaser at the first sale, and owned the second mortgage, and made the condition. No wrong was done, and none intended. The entire bond was due on the second mortgage loan, and its reduction by a void sale did not injure those who were bound to pay the entire bond.

The plaintiff was not bound to sell the land in New Jersey before obtaining a judgment for the deficiency on the bond. Under the old practice, an action at law on the bond and a foreclosure in equity could go on together. Dunkley v. Van Buren, 3 Johns. Ch. 330 . The object of the Revised Statutes and of the Code, § 1627, was to have one remedy by providing a judgment for a deficiency after sale. This means a sale that the courts of this slate can order. The bond given to the plaintiff could be sued after the second sale without going through a foreclosure as to the land in New Jersey. The orders should therefore be affirmed, with costs and disbursements as of one appeal.

(concurring.) We discover no irregularity in the proceedings of the plaintiff. The second mortgage was at all times subordinate to the first mortgage, and to the rights acquired under it. Had the sale been first made under the second mortgage, no irregularity would have been claimed, yet the final result would have been the same. In that case the sale would have been made subject to the first mortgage. In the present case the purchaser occupies the place of the first mortgagee, and has succeeded to his rights. The sale under the second mortgage was made subject to such rights. The practice was proper, and the appellant cannot be allowed the relief demanded.

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