Waugh v. Bailey — 22 N.Y. St. Rep. 534

Majority

p. 534

Harry S. Waugh, Resp’t, v. Charles O. Bailey et al., Purchaser, App’lts.

(Supreme Court, General Term, Mrst Hepan'tment,

Filed March 29,1889.)

Headnote

Title—Mortgage foreclosure—Orders of court—When title not-

AFFECTED BY,

A judgment was duly entered under foreclosure proceedings. After-wards and before the sale, Mrs. B., one of the defendants against whom the judgment was entered by default, made a motion to open the judg.ment as to her, on the ground that she had executed the mortgage under a promise that she would be paid $1,000, which she had not received. Pending the argument of the motion, it was stipulated and agreed be tween her and the plaintiffs that the sale should proceed as advertised and that the referee should retain in his hands $1,250, to hold the same pending the hearing of the motion to open the default: Held (1), that the title of the purchaser was not in the slightest degree affected by the order of the court; that the said sale proceed without prejudice to the claim of Mrs. B., pending the determination of her said motion; (2), that even if the purchaser had notice of Mrs. B.’s claim at the time of the sale, unless, the purchase was subject to the claim, he took a good title; he was protected by the order of the court and the stipulation of Mrs. B., embodied in the order.

Appeal from order requiring purchaser to complete his purchase and pay the balance of the purchase money.

C. H. Lovett, for app’lts; J. S. Mosher, for resp’t.

—This action was brought to foreclose a mortgage made by the defendants, Charles O. Bailey and. Delia T. Bailey, his wife, to one Frank A. Bailey, and by him assigned to the plaintiff. The summons and a copy of the complaint were served on the defendant Delia T. Bailey and also on the other defendants. She made default, and when the cause was in readiness as to all parties, judgment of foreclosure and sale was entered on the 8th of November, 1888, and the premises were advertised for sale .under said judgment for December 12, 1888.

On the 20th of November, 1888, the defendant Delia T. Bailey, under an order to show cause, moved to open her

p. 535

default and to be allowed to defend, alleging, among other things, that the mortgage was given in part to secure $1,000 agreed to be advanced to her at the time of signing, and that she had never been paid that sum.

Before the motion came on for final argument an order was entered on the 7th of December, 1888, by the consent of her attorney, as follows:

The defendant, Delia T. Bailey, having made a motion by William G-. McCrea, Esq., her attorney, to open her default herein and to be allowed to answer, and consenting that if said motion be granted, she shall set up as a defense only her claim to be paid $1,000 from the proceeds of the sale of the mortgaged premises, now upon the consent of said attorney and of plaintiff’s attorneys at the foot of this order in order to prevent delay in the sale, it is ordered by the court that the sale of the mortgaged premises, pursuant to the judgment entered herein, may proceed without prejudice to the aforesaid claim of the aforesaid Deha T: Bailey, pending the determination of her motion aforesaid, and that Leicester Holme, Esq., the referee appointed to sell, reserve from the amount directed by the judgment to be paid to the plaintiff the sum of twelve hundred and fifty ($1,250) dollars, and hold the same pending the hearing and determination of the aforesaid motion until the further order of the court.

Consented to. (A copy.)

JAMES A. FLACK, Cleric.

William G-. MoCrea, Attorney for D. T. Bailey; Carpenter & Mosher, Plaintiff’s Attorneys.

[l. s.] ,

The premises were duly sold on the 19th of December, 1888, to the appellant, and on the 27th of December the motion of Mrs. Bailey to open the default was argued and an order was made reciting, among other things, the above mentioned order of December 7th, by which it was ordered that the default of the defendant, Delia T. Bailey, be opened, and that she be allowed to set up as a defense her claim to be paid $1,000 and interest from the proceeds of the sale of the mortgaged premises. The purchaser thereupon made a motion to be relieved from his purchase, which motion being denied, this appeal from the order ■thereupon entered was taken.

We do not see how the title of the purchaser was in the ■slightest degree affected by the allowing of Mrs. Bailey to defend and claim a share in the proceeds of the sale of the mortgaged premises under her stipulation. It was by and with the consent of Mrs. Bailey that the premises were

p. 536

sold, and the default was opened expressly without prejudice to the sale, and her claim was restricted to the amount, of the proceeds of the sale which the referee was directed to retain out of the money directed by. the judgment to be paid to the plaintiff.

Under these circumstances it was of no consequence to-the purchaser as to what became of this claim of Mrs. Bailey. It could in no way affect his title. The decree directing a sale of the mortgaged premises was in no way modified; and this was done by the express consent of Mrs. Bailey. Even if it had been done without her consent,, still the appellant would have obtained a perfect title. Mrs. Bailey was in default. She was asking for favor, and the court had a right to impose all reasonable conditions, and if, in its judgment, the sale ought to proceed, notwithstanding her application to come in, the court had a right to make such direction, and to allow her to litigate her claim against the proceeds of the mortgaged premises without in any way affecting the title which the purchaser would acquire under the decree.

In the argument of the appeal great stress seems to be laid upon the question as to whether the purchaser had. notice of Mrs. Bailey’s claim at the time of the purchase. We do not see that that in any way affects the question, one way or the other. Even if the purchaser had notice of Mrs. Bailey’s claim, and purchased, unless the purchase was subject to the claim, he was entitled to a good title, and if that claim interfered with his title fie would be entitled to be relieved. But, as we have seen, it can in no way affect his title, he being protected by the order of the court, and the stipulation of Mrs. Bailey embodied within the order.

It seems to be reasonably clear that the order was right and should be affirmed, with ten dollars costs and disbursements.

' Bartlett, J., concurs.