Ladd v. Stevenson — 20 N.Y. St. Rep. 746

Majority

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William J. Ladd, App’lt, v. Anna L. Stevenson,as Administratrix, etc., et al., Resp’ts.^[1]

(Court of Appeals,

Filed January 29, 1889.)

Headnote

1. Judgments taken through mistake, etc—Power of court to relieve' from—Code Civ. Pro., § 724.

The whole power of the court to relieve from judgments taken through “mistake, inadvertence, surprise or excusable neglect” is not limited by Code of Civil Procedure, § 724, but in its control over its judgments it may open them upon the application of any one for sufficient reason in the furtherance of justice. Its power to do so does not depend upon any statute, but is inherent.

2. Contract—Security for performance—Effect of breach.

Where a contract provides for the giving of “ satisfactory security ” for the performance thereof, on failure to perform, it does not create any lien or mortgage binding or affecting the real property belonging to the party liable for the breach. :

3. Judgments—Lis pendens—When parties entitled to be made parties

to action after judgment and be allowed to defend—Code Civ. Pro., § 452.

The filing of a notice of the pendency of an action against real estate of the defendant entitles his legal representatives, and those purchasing from him, even after judgment has been rendered against him, to be made parties to the action, and to move the court’and be heard in reference to any judgment rendered therein affecting their rights.

Appeal from a judgment of the supreme court, general term, first department, affirming a judgment in favor of the defendant rendered at special term.

On or about the 1st day of March, 1878, the defendant Willett agreed, in writing, to repay to the plaintiff a loan of $12,500 in equal monthly installments, and in a certain contingency mentioned “to give said Ladd satisfactory security for the repayment of said loan by installments-above mentioned, or to pay the same forthwith in cash. ” The contingency upon which the security was to be given happened. The agreement contained nothing showing what kind of. security was to be given, and there was no written stipulation to give security upon real estate. On the 22d day of May, 1878, the plaintiff caused the agreement to be recorded as a mortgage in the office of the register of the city and county of New York, and on the next day commenced an action in the supreme court against Willett in his complaint alleging the execution of the agreement; that the defendant had failed. to repay the

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entire loan, or to give satisfactory or any security for the repayment of the same, and that it was the intention and purpose of tj^e agreement that the defendant should mortgage to the plaintiff all his right, title and interest in certain real estate mentioned in the complaint, and demanding judgment that he specifically perform the agreement and execute a mortgage upon the real estate mentioned for the repayment of the loan with interest, and that he and all persons claiming under him subsequent to the commencement of the action be barred and foreclosed of all right, claim, lien or equity of redemption in the premises, and that the premises' be decreed to be sold according to law, and out of the proceeds of such sale the plaintiff be paid the sum óf $12,500, with interest thereon, besides costs.

On the same day he filed a notice of the pendency of the action in which it was • stated that the object of the action was to obtain judgment against Willett that he “ specifically perform the said agreement, and that he execute a mortgage upon the following, described real estate and property for the repayment of $12,500 with interest by installments, as specified in said contract, and that the premises in said county to be affected herein are described as follows;” then follows a description of twenty pieces of real estate in the city of New York. In January, 1879, Willett answered the complaint, denying any breach .of the agreement, and setting up various payments, on account. No steps were taken in the trial of the issues thereafter until February, 1884, when the cause was tried. Willett, at that time, had no personal interest in the real estate, as he had disposed of all his property and was, insolvent, and he actually directed his attorneys to let the case go by default, but this they did not do. Some months later the trial judge decided the case in favor of the- plaintiff, and on January 15, 1885, judgment was entered , upon his decision directing the sale of the real estate in question for the purpose of satisfying the amount due under the agreement above mentioned, besides costs; and on the 15th day. -of April, 1885, in pursuance of that judgment, the plaintiff advertised the property for sale,.- Between May, 1878, and; February, 1884, an action was brought for the.partition of the same real estate in the city of New York, and notice of the pendency of that action was filed June 9, ,1879. Willett was a party to that action, bnt Ladd was not. The action was carried to judgment and sale, and in 1881, the property was conveyed by referee’s deed to Ver-' non B. Stevenson. Willett’s share of the money received; by the referee went to payoff a $20,000 mortgage which was prior to plaintiff’s contract.. -.In 1.882 Stevenson con-,veyed the same premises by a full covenant deed to

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Samuel Glover, and in 1883, Glover conveyed them by full covenant de§d to the defendants Goelet, who are now the-owners thereof. On the 28th day of March, 1885, Anna L. Stevenson, as the administratrix of Vernon K. Stevenson, who had died, presented a petition to the court asking' to be made a party defendant in the action, and that the judgment in the action be vacated, set aside or modified, and that she be permitted to defend. On the 4th of April, 1885, the defendants Goelet made a like application to the court. Both applications were granted, and they were permitted to appear and answer the complaint.

Upon the trial of the issues made by the answers of these-defendants the plaintiff was defeated upon the merits and his complaint was dismissed. Thereupon he appealed from the order setting aside his former judgment and allowing Mrs. Stevenson and the Goelets to come in and defend, and also from the judgment to the general term, where the order and judgment were affirmed, and then he-appealed from the order and judgment of the general term, to this court.

Frederick P. Forster, for app’lt; E. Ellery Anderson, for resp’t.

The court had the power in the exercise of its-discretion to set aside the judgment entered in favor of the* plaintiff after the first trial, and to permit the three defendants, Stevenson and the Goelets to appear and answer. Mrs. Stevenson, as administratrix of her husband’s estate,, was interested to the full amount of plaintiff’s claim, for in case he could enforce his judgment against the real estate-she, as administratrix, was liable to the Goelets upon the-covenants contained in her husband’s deed and the bond of indemnity given by him to the Goelets; and the Goeletswere interested in the real estate in consequence of their-purchase of the same and their ownership thereof. Therefore under section 452 of the Code it was proper that they should be made parties defendants. And notwithstanding-section 724 of the Code, the court had the power to set aside the judgment and allow them to come in and defend. Dinsmore v. Adams, 5 Hun, 149 ; Ailing v. Fahy, 70 N. Y., 571 ; Hatch v. The Central Nat. Bank, 78 id., 487; Vanderbilt v. Schreyer, 81 id., 646; O'Neil v. Hoover, 17 Week. Dig., 354.

In consequence of the filing of the notice of the pendency of this action the first judgment bound these defendants as. if they were parties to the action. Persons thus situated, bear such a relation to the action that they could not only claim to be made parties during the pendency of the action,.

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but they can also move the court and be heard in reference to any judgment rendered therein affecting their rights.

The whole power of the court to relieve from judgments taken through “mistake, inadvertence, surprise or excusable neglect,” is not limited by section 724; but in the exercise of its control over its judgments, it may open them upon the application of any one for sufficient reason in the furtherance of justice. Its power to do so does not depend upon any statute, but is inherent, and it would be quite unfortunate, if it did not possess it to the fullest extent.

The present ■ judgment is right upon the merits. The plaintiff had no written stipulation giving or agreeing to give him a lien upon real estate. If he had any agreement for a lien upon this real estate, it all rested in paroi, and there was no part performance and no ground whatever authorizing the maintenance of the action.

The order and judgment appealed from should, therefore, be affirmed with costs.

All concur.