United States Life Insurance v. Poillon — 27 N.Y. St. Rep. 899

Majority

p. 899

The United States Life Insurance Co., App’lt, v. George W. Poillon et al., Resp’ts.

(Supreme Court, General Term, First Department,

Filed December 2, 1889.)

Headnote

Leave to sue—Deficiency judgment—Heirs.

An application for leave to bring action against a person’s heirs to enforce a foreclosure deficiency judgment recovered against his estate is one which rests in the sound discretion of the court and where it would be inequitable to allow the enforcement of the judgment under all the circumstances of the case as they exist at the time of the application, the court should deny the motion.

Appeal from order denying appellant’s motion for leave to sne and directing said order to be entered nunc pro tune as of the 1st July, 1886, a date prior to the commencement of this action.

Flamen B. Candler, for app’lt; H. H. Man, for resp’ts, Poillon & Leveridge; W. W. Gage, for resp’ts, Jordan & Gage.

This action was brought to enforce against "the heirs of Cornelius Poillon a foreclosure deficiency judgment recovered on the 6th February, 1876, against Poillon’s administratrix. The action was commenced without leave of the court. A demurrer upon the part of one of the defendants that the complaint did not set forth a cause of action having been sustained upon the ground that leave to sue had not been obtained as required by § 1628 of the Code, the plaintiff obtained an ex parte order permitting it to sue and providing for the entry of the order as of a time prior to the commencement of the action. A motion was made to set aside this order, which was denied at the special term, but it was reversed at the general term upon the ground that notice should have been given to the defendants who had appeared in the action of the application. Thereupon the plaintiff renewed its application upon notice, when the application was denied and this appeal is taken.

Applications of this kind are necessarily addressed to the sound discretion of the court. If the circumstances are of a character that render it inequitable to allow the deficiency judgment to be enforced, then the court, being governed by principles of equity in granting or refusing such an application, should deny the same. The plaintiff in this action commenced its proceeding-in entire disregard of the provisions of the Code in this respect, and it was not until a demurrer had been sustained to its complaint that it made any effort whatever to obtain the order in question, and then made the application to the court without the knowledge of the parties who had appeared in the action.

We are of opinion that for the reasons stated in the opinion of the learned judge who heard the application in the court below that the same was correctly denied; and it would be unnecessary to add anything to what has been said upon the decision of the motion, were it not for the fact that the learned counsel for the appellant claims that it is unusual to finally dispose of the property rights of a litigant upon ex parte affidavits without giving him "the right to a trial in a plenary action.

p. 900

It is perfectly clear that the equitable considerations which call upon the court to deny this application could not be availed of as matters of defence in the action itself. And it was because these equitable considerations which might constrain the court to deny an application of this kind could not be set up by way of answer in the action that the provision of law obtained requiring applications to be made to the court for leave to sue under circumstances like those in the case at bar. If it had been possible to set up these considerations in the case itself there would be no necessity for a provision of law that application should be made to the court for leave to sue; and as already stated these applications are to be disposed of upon equitable principles; and if it should be inequitable to allow the enforcement of the deficiency judgment under all the facts and circumstances of the case as they existed at the time of the application, then the court is called upon to deny the motion.

The claim that the application should be considered as of the date when the deficiency judgment was entered cannot prevail because the question as to whether it would be equitable or inequitable to grant the motion must depend upon the facts existing at the time the application is made.

We think for the reasons stated in the opinion of the court below the order appealed from should be affirmed, with ten dollars costs and disbursements.

Bartlett, J., concurs._