Van Loan v. Squires — 21 N.Y. St. Rep. 526

Majority

p. 526

Bronx Van Loan v. Mary J. Squires et al.

(Supreme Court, General Term, First Department,

Filed January 28, 1889.)

Headnote

1. Practice—Foreclosure —Necessary party.

The owner of the equity of redemption is a necessary party to an action for the foreclosure of a mortgage.

2. Same—Appeal—Order—Code Civ. Pro., § 1300. ;

An appeal from an order may be taken from a “ specified part thereof.”

3. Same—Foreclosure.

Where in an action for the foreclosure of a mortgage, an order was made- ■ amending the proceedings by making the owner of the equity of redemption a party, and imposing, as terms, the costs of all preceding proceedings. Held, that as these proceedings were unauthorized, and of no-benefit to such owner, they could not, as a matter of equity, be made a. charge upon her interest in the equity of redemption.

Appeal by Mary E. McKinley and William Sharpe-from so much of an order amending the proceedings in the action by making her a party defendant, as imposed as, terms the payment of all costs, charges and expenses, subsequent to the death of Mary J. Squires, including referee’s and auctioneer’s fees.

Joseph 0. Brown, for app’lts; J. Alex Beall, for resp’ts.

The action was for the foreclosure of a¡. mortgage upon property situated in the city of New York. It was owned by Mary J. Squires. The action was commenced in December, 1876, and it was not until August, 1886, that an order of reference was entered referring the--case to a referee to compute and ascertain the amount due-to plaintiff for principal and interest upon the mortgage debt, and on the 17th of the same month, judgment for -the foreclosure and sale of the property; was entered upon the report of the referee. Mary J. Squires, the owner of the equity of redemption died in February, 1878, and

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the action was at no time revived, by making any person a defendant in it, representing her interest. The proceedings of the reference resulting in the judgment, were accordingly not only irregular, but they were without authority. For the owner of the equity of redemption is a necessary party to the action for the foreclosure of a mortgage.

Hall v. Nelson ( 23 Barb., 88 ), is not in conflict with either of the authorities referred to in behalf of the respondents, for the reason that the decease of the parties in those cases took place after the judgment.

At the time of the decease of Mrs. Squires, which succeeded the decease of her husband, she left her surviving as her sole heir, Mary E. McKinley, one of the appellants, and she applied to the court for leave to become a party to the action as the owner of the equity of redemption. But she was not such owner at the time when the order to show -cause was made on the 1st of August 1888. She did, however, own the equity of redemption in the property, until the last of May, 1888, when she conveyed it to William W. Sharpe, the other of the appellants. And it appears that it was one of the conditions of the sale of the equity of re-, demption, that the previous proceeding, including the order of reference, should be vacated and set aside, and it was under this obligation that the motion was made in her behalf to make her a party to the action, and that, by the order, was done as of the 1st of March, 1878, which would render her sale and conveyance of' the property to Sterne, subject to the.action. There was no loches on her part in making the application. It appears by her affidavit that she only acquired information concerning the action and the proceedings taken therein, within a few weeks prior to the time of making her affidavit on the 13th of April, 1888.

Facts were set forth in the affidavit of Henry T. Brennan from which he inferred that Mrs. McKinley must have had information concerning the action during the lifetime of her mother. But the inference has not been so far supported by the facts stated, as to overcome this positive denial in her own affidavit. And a similar answer is applicable to the affidavit of Simon Sterne, indicating a probability that Mrs. McKinley was informed of the action five months or more before the motion. The motion was, therefore, made with reasonable diligence after this information had. been acquired by Mrs. McKinley.

To defeat the appeal, the objection has been taken that it is ineffectual, for the reason that only so much of the order as imposes terms upon Mrs. McKinley,.has been appealed from by the notice of appeal, and the cases of Tribune Association v. Smith (40 N. Y. Superior Ct., 81), and Havemeyer v. Havemeyer (44 id., 171 ), have been brought to the attention of the court in support of this objection. But

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they seem to have been decided without any reference to> the provision contained in the Code, allowing an appeal from an order to be taken from "A specified part thereof.”1 This was the law as it was contained in the Code of Procedure, amended and enacted in 1849 and made section 327, audit has since in the same form been continued in force, and .will now be found as section 1300 of the Code of Civil Procedure.

This section was so framed and continued as to entitle the party whose substantial rights are affected by an order, to appeal from that part of it, deemed to be injurious to the. party appealing. And it has been the practice notwithstanding these decisions, to sanction and consider such appeals, and the point accordingly arises whether Mrs. McKinley should have been charged with the payment o£ these costs and expenses as a condition to the leave given her to become a party to the foreclosure suit.

At the sale Henry T. Brennan, the assignee of the bond and mortgage, became the purchaser of the property and he probably went into possession under his purchase. Since then'he appears to have parted with his interest. For oni -the nineteenth of July, 1888, he transferred and assigned his purchase and interest in the bond and mortgage, to» Simon Sterne.

These parties were willing to allow the proceedings to remain in the defective and incomplete condition they have-been in since the decease of Mrs. Squires, the owner of the equity of redemption. And in that condition of the case, Mrs. ‘McKinley and the purchaser from her, Mr. Sharpe, would be entitled to redeem the premises from the mortgage, by paying the principal and interest remaining now unpaid upon it. But the court considered it to be its-proper disposition that Mrs. McKinley should be made a party to the action as of the 1st of March, 1878, which would render a sale of the property made after this order legal and regular, vesting a good title in whoever should become-the purchaser.

Each party is willing to leave this part of the order in force. Neither the plaintiff nor the purchaser, nor hist grantee, has in any way drawn in question the regularity or propriety of this part of the order. But it has become a. fixed and permanent part of the,action, and under it Mrs. McKinley is to be brought in as a defendant. . The sole-controversy has been reduced to the terms. And as a matter of equity there was no justifiable ground for charging her with the costs and expenses of the preceding unauauthorized proceedings. They were of no benefit either to herself or to the property, and if an action to redeem the mortgage-should be prosecuted by her, she could not be charged with these costs and expenses, for the reason that they were in

p. 529

curred without authority, and the latter part of the order, providing that they shall be repaid out of the proceeds of any subsequent sale, in no way remedies the injustice of this requirement. .For, even in that event, the costs and expenses of the* unauthorized proceeding would still be a charge upon her interest in the property, which it should not legally or equitably be made to bear. 'What was done-in the action after the decease of Mrs. Squires, was without jurisdiction and a nullity, and the expenses of the proceedings could not legally be made a charge upon the interest of Mrs. McKinley in the equity of redemption.

So much of the order as imposed these terms as a condition to the right of Mrs. McKinley to become a party to the suit, should therefore be reversed, with the usual costs and disbursements of the appeal to the appellants, to abide the event of the action.

Van Brunt, Ch. J., and Brady, J., concur.