Keeler v. Keeler — 1 N.Y. St. Rep. 673

Majority

p. 673

Harriet Keeler, appellant, v. Burr Keeler, respondent.

(Court of Appeals,

Filed March 26, 1886.)

Headnote

1. Mortgage—Foreclosure—Evidence of fraud in—Prior lien.

In March, 1861, Burr ICeeler, owning certain premises subject to a quit-rent, with right of re-entry to his landlord in case of non-payment, executed a mortgage for §900 to Patience Keeler, who assigned it to plaintiff. In 1867 Eliza Cruger owned one-sixtli and Toumans live-sixths of the rent of this and other lots, and the rents not having been paid since 1857, they brought separate actions of ejectment and issued writs of possession; Burr Keeler and his wife giving a written consent to Toumans to dispossess them, waiving all appeals and stays of proceedings theretofore obtained as never authorized. Toumans having acquired the title of Eliza Cruger, conveyed the premises to Jane Keeler, one of the mortgagors, taking back a purchase money mortgage for $1,422. This the court below held to be a prior lien to plaintiff’s mortgage, and also held that the question as to whether the writ of possession was fraudulent, and made to cut off plaintiff’s title could not be considered in this action of foreclosure, for the reason that there was no allegation in the complaint to that effect: Held, error; that the complaint was purely and simply for the foreclosure of the mortgage; all the allegations with respect to the proceedings in ejectment came from the defendants and the plaintiff had the right to'give evidence on the trial, for the purpose of avoiding the new matter set up as a defense, of any facts which might have been pleaded by way of reply when that pleading was in use.

2. Same—Right op owner op equity op redemption to have costs

RETAXED.

That plaintiff could redeem by paying back rents and legal costs, and was not estopped from having excessive costs retaxed by the agreement entered into by the mortgagor and landlord.

Appeal from order and judgment of general term, supreme court, third department, affirming judgment at Delaware October special term, adjudging that a mortgage held by defendant Youmans was a prior lien to the one held by plaintiff.

J. H. Maynard, for appellant, Harriet Keeler.

Wm. Kenyon, for respondents, Burr Keeler and others.

This action was brought in August, 1872, for the foreclosure of a mortgage. The complaint alleged

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that the defendant Burr Keeler, 2d, together with his wife, Jane Keeler, on the first of March, 1861, mortgaged to Patience Keeler a farm of fifty acres of land in Delaware county to secure an indebtedness of §900, with interest; that Patience Keeler assigned this mortgage in December, 1861, to the plaintiff in this action; that default had been made in the payment of the principal and interest of the mortgage; and the plaintiff demanded, as relief, a foreclosure and sale of the mortgaged premises. The complaint contained only the ordinary averments of a complaint for the foreclosure of a mortgage upon land in fee. It did not specify the title of the mortgagors, nor refer to any lease or any proceedings in ejectment, or contain any special matter whatever.

The defendants, Eliza Cruger and William Youmans, Jr., were made parties on the allegation that they had or claimed some interest as judgment creditors of the mortgagor, which interest accrued subsequently to the mortgage. The answer sot out the title of the mortgagor, and averred, among other things, that he held under a perpetual lease from John Kortright reserving rent, and that the title of the lessor to the rents having become vested in Eliza Cruger and William Youmans, Jr., they proceeded by ejectment for non-payment of rent, and recovered judgments for possession, and costs, against the mortgagor (who was the tenant), in February and March, 1871; that on the 22d of "August, 1872, they issued writs of possession on said judgments; and that on the same day the sheriff of Delaware county dispossessed the mortgagor, and delivered possession of the mortgaged premises to the plaintiffs on the judgments, and claimed that^ the plaintiff’s mortgage was cut off by those proceedings.

On the trial the defendants proved the title of the mortgagor to be that of a lessee in fee, the recoveries by Cruger and Youmans against him in ejectment for non-payment of rent, and the issuing of writs of possession to the sheriff. The proceedings claimed to be an execution of the writ were substantially similar to those in Newell v. Wigham, ante, 666 (just decided), with the additional circumstance that on the 10th of August, 1871, before the pretended execution of the writ of possession, Burr Keeler and his wife, the mortgagors, without the knowledge of the mortgagee or her attorney, gave a written consent to the defendant You-mans, authorizing him to proceed in the ejectments suits, and dispossess them under the judgments therein; they waiving all appeals and stays of proceedings theretofore obtained by Gilbert and Maynard, as never authorized. William Youmans, Jr., had at that time acquired the title of Eliza Cruger, and on the 23d of February, 1872, the day

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after the pretended dispossessions of the mortgagors, he conveyed the premises in question to Jane Keeler, one of mortgagors, and took back a mortgage for $1,422 for the purchase money, which mortgage he now claims, and the court below has adjudged, to be a lien on the premises prior to the plaintiff’s mortgage.

The plaintiff insisted, on the trial, that the writ of possession was never executed so as to cut off the plaintiff’s right to redeem under her mortgage; that she still had the right to redeem; and, further, that the pretended execution of the writ of possession was fraudulent and collusive, and designed to wrongfully deprive the plaintiff of the lien of her mortgage. The finding of the judge in respect to the execution of the writ of possession was similar to that in the Newell Case, and the reasons given for the reversal of the judgment in that case are also applicable to this.

The further point is here presented more clearly than in either of the other cases, that the trial judge erred in his ruling that the question whether the execution of the writs of possession was fraudulent and collusive, and done for the purpose of cutting off the title of the plaintiff, could not be considered, for the reason that there was no allegation in the complaint to that effect. This, we think, was error. The complaint was purely and simply for the foreclosure of the mortgage. All the allegations with respect to the proceedings in ejectment came from the defendants, and the plaintiff had the right to give evidence on the trial, for the purpose of avoiding the new matter set up as a defense, of any facts which might have been pleaded by way of reply when that pleading was in use. Mandeville v. Reynolds, 68 N. Y., 528 ; Meyer v. Lathrop, 73 id., 315.

By the judgment appealed from, the mortgaged premises were directed to be sold under the plaintiff’s mortgage, subject to the mortgage given by Jane Keeler to the defendant Youmans for $1,422, on the 23d of February, 1872. The amount secured by this mortage included the costs for which judgment was entered in the ejectment suits, amounting to $1,084.94, besides interest for 1871. By the relaxation of the costs in the large number of the Kortrigght suits, of the class to which the cases against Burr Keeler belonged, it was ascertained that the costs legally incurred in these actions amounted only to about $220.49. Whatever costs Mr. Youmans is entitled to in those actions would have to be paid by the plaintiff in this action, to redeem her interest as mortgagee of the leasehold estate, and the amount thus payable is consequently a matter of much importance to the parties in this controversy, and was strenuously litigated in this action. It appears from the findings that an order was obtained for the retaxation of

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the costs in the numerous ejectment suits, and that in the mass of them they were reduced as above si ate 1; but that afterwards, on the 12th of September, 1873, an order was obtained in the case against Keeler, and some others of the cases known as the “Kortright Oases,” staying the proceedings for retaxation, on the ground that the cases had been settled, and directing that the clerk should not re-adjust the costs in those cases without leave of the court being first obtained; and, it appearing to the court that in some of the cases which had been settled, the defendants on the record, with whom the settlements had been made, were not the real or the sole parties in interest, but that other parties were interested as mortgagees or incumbrancers, the order further provided that in such cases motions might be made, or notice for a re-adjustment of the costs by the clerk.

At the time that order was made the present action was pending. A stipulation was afterwards entered into on the part of the plaintiffs and defendants in the ejectment suits called the “ Kortright Oases,” including the action against Keeler, which was signed by Mr. Youmans, and by Gilbert and Maynard, then the attorneys for the plaintiff in this action, for the retaxation of the costs in the Kortright Cases in conformity with the opinion of Balcom, J., excepting those cases actually settled and ended. But that stipulation contained a provision that it should not prejudice or affect the right of any person interested in the premises hr controversy, in any of the cases that were settled and ended, to make a motion or institute any other proceeding or action, as they might be advised, to have said costs retaxed and re-ad justed:

The rights of Harriet Keeler, the plaintiff, as mortgagee of the premises in question, to move for a retaxation of the costs notwithstanding the settlement made between the landlord and the mortgagor, was thus preserved by the stipulation of the parties. But, even in the absence of such a stipulation, it is difficult to see on what principle the interest of the mortgagee should be bound by the consents and waivers given by the mortgagor, and why it would not be a fraud upon the rights of the mortgagee to enforce them | against her. - She had the legal right to redeem on payment x of the back rent and the costs legally incurred. It was demonstrated by a retaxation that the judgments had been entered for an amount largely in excess of the costs legally incurred,—in fact, nearly five times the legal amount,—and, although it was competent for Burr Keeler, the mortgagor, to waive objection to these costs on making his settlement with Youmans whereby he was to acquire the fee, the dealings between those parties should not be allowed to affect the rights of the mortgagee, whose mortgage was duly

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recorded, and who has done no act in affirmance of the judgments for costs. The amount of those costs cannot, however, he adjusted in this action. It is brought simply for the foreclosure of the mortgage. No writ of possession having been executed, the purchaser under the mortgage will acquire the leasehold title, subject only to the payment of the amount due for back rents and the legal costs. If the plaintiff desires to avail herself of the right to have the costs retaxed, she should make her motion for that purpose, to which motion we see no answer other than the delay which has intervened. That delay may well be attributed to the pendency of this action, and to the fact that after the judgment was rendered herein, which sustained the validity of the execution of the writ of possession, a retaxation would have been of no avail to the plaintiff so long as that judgment remained in force.

These matters will doubtless be taken into consideration by the court, to whom the application for a retaxation may be made in pursuance of the stipulation, and we will not anticipate its decision.

On a new trial a proper judgment can be rendered for the foreclosure of the plaintiff’s mortgage, and a sale of the mortgaged premises, subject only to the prior liento the extent of the back rent due on the lease, and the costs legally incurred in the ejectment suits, and against these the claim of the plaintiff to allowances for use and occupation may be determined upon the facts which may be established on such new trial.

The judgment is reversed, and a new trial ordered, with costs to abide the event.

All concur.