Colgan v. Dunne — 21 N.Y. St. Rep. 315

Majority

p. 315

Jane Colgan, as Adm’x, etc., Resp’t, v. Patrick Dunne, John Dunne and Kate Victory, App’lts.

(Supreme Court, General Term, Second Department,

Filed December 10, 1888.)

Headnote

1. Statute of limitation—Running of—Deficiency judgment on mortgage FORECLOSURE—ACTION AGAINST LEGATEES—WHEN BARRED—CODE of Civil Procedure, §§ 1837-1844.

An action may be maintained against legatees under a will to recover the amount of a deficiency judgment rendered on foreclosure of a mortgage given by testator to secure a bond and is barred only at the expiration of twenty years from the maturity or the bond. Such action is based on a sealed instrument, and exists independently of sections 1837-1844 of the Code of Civil Procedure.

3. Same—Liability of legatees.

Although a portion of the proceeds of the sale were used to defray the expenses of the foreclosure, instead of being applied to the reduction o£ the mortgage debt, the legatees, to the extent of their legacies, are liable for the full amount of the deficiency judgment.

Appeal from a judgment entered on the decision of the trial judge at the Kings county circuit.

The action was brought by plaintiff to charge the above defendants and others, as legatees under the last will of Michael Dunne, deceased, with the amount of a deficiency judgment arising from the foreclosure of a certain bond and mortgage made by Michael Dunne in favor of this plaintiff on the 17th day of August, 1865, and due and payable on the 17th day of August, 1868. The bond was in the penal sum of $6,000 conditioned for the payment of $3,000 as aforesaid; the mortgage contained an express covenant to repay said sum. The mortgage was duly foreclosed and a deficiency judgment entered upon the bond of said Micheál Dunne on the 5th day of December, 1882, in the sum of $854.18, with interest from June 29, 1882.

The answer admits that they were legatees under the last will of Michael Dunne, deceased, and the court found on the trial that as such legatees +hey received in the aggregaté some $50,000 of the estate of said Michael Dunne,

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and separately the following proportions: Patrick Dunne, one-fourth thereof; John Dunne, one-fifth thereof; Catharine Victory, one-eighth thereof, and the remainder to-other defendants not parties to the appeal. The court further found that no assets of the estate of Michael Dunne, deceased, were delivered by the executors to the next of kin of said decedent. It was also found that the sum of $854.18, with interest from June 29, 1882, was still due on the bond of Michael Dunne, deceased, and judgment for said amounts, with costs, etc., was thereupon awarded against the defendants in the following proportions: against Patrick Dunne, one-fourth thereof; John Dunne, one-fifth thereof; Kate Victory, one-eighth thereof, etc. Due permission by this court to plaintiff to bring and maintain this action was also found.

William M. Benedict, for app’lts; William J. Carr, for resp’t.

Appellant contends that the action is not based upon a sealed instrument but upon the statute liability created by sections 1837-1844 Code Civil Procedure and that it accrued in 1872, when the estate was distributed, and that it is barred by the six year or by the ten year limitation.

We think the right to pursue the legatee for the debt of the testa,tor exists independent of the statute.

Courts of law and courts of equity have from the earliest times sustained the creditor’s right to satisfaction of his debt from the assets of testator in the hands of the legatee.

Bract., book 2. c 26, fol. 61; 2 Bl. Comm., c. 32; 6 Bac. Abr. Legacies, h., 3 Red. Wills, § 56; 1 Washb. Real Prop., c. 3, § 73; 16 Peters 25 ; Noel v. Robinson, 1 Vern., 90-94; Newman v. Barton, 2 id., 205; Nelthorp v. Hill, 1 Ch. Cas., 136.

The theory is that the testator cannot cut off the right of his creditor to satisfaction of the debt from testator’s estate. In form the action is against the legatee. In substance it is against the property of testator in defendant’s hands.

The statute regulates the procedure but does not create the right.

It follows that the action must be regarged as brought upon a sealed instrument and the period of limitation is twenty years.

That period had not elapsed since the execution of the bond and mortgage.

The introduction of the deficiency judgment did not injure defendant.

The effect of that proof was to limit the plaintiff’s re

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covery; not to enlarge it. Proof of the mortgage and its-recitals established a cause of action for $3,000 and interest.

By introducing the judgment in foreclosure, plaintiff in, effect showed that except as to the amount of the judgment the bond and mortgage were paid.

It cannot be justly said that defendants are held liable for the costs of that suit.

Proper statement would be that a portion of the proceeds of sale being used to defray the expenses of the foreclosure that amount was not applied to the reduction of the mortgage debt which, therefore, remained a liability for which defendants must respond.

Judgment affirmed, with costs.

All concur.