Mutual Life Insurance v. Cranwell — 32 N.Y. St. Rep. 376

Majority

p. 376

The Mutual Life Ins. Co., Resp’t, v. Margaret Cranwell, Impl’d, App’lt.

(Supreme Court, General Term, Fourth Department

Filed May 23, 1890.)

Headnote

1, Fobeclosube — Equities between defendants not affecting plaintiff CANNOT DELAY BECOVBBY.

In an action of foreclosure the appellant’s answer alleged that in 1888

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she conveyed the premises to certain of the defendants on an agreement that they should advance moneys to pay debts and the interest on the mortgage and reconvey in two years on repayment of the sum advanced, and also a breach thereof, and asked that the agreement be reformed and decreed to be specifically performed, and that defendants keep the premises free from the mortgage in suit. Held, that affirmative relief of this nature was not authorized by § 631 of the Code; that there was no defense to the mortgage and that appellant was not entitled to delay the foreclosure.

3. Reference.

So long as the order of reference remains in force the referee is fully empowered to act, and it is proper for him to overrule objections to his power to determine the issues between the parties.

3. Costs — Extra allowance.

The exercise of the discretion of the court in granting an extra allowance will not be reviewed where there has not been an abuse of it.

Appeal “ from, a judgment of the supreme court herein, entered in the. clerk’s office of the county of Oneida on the 9th day of September, 1889; judgment for foreclosure for $15,847.76.” In the notice of appeal it is stated “ The appellant intends to bring up for review upon such appeal, and also hereby appeals from the order of the supreme court, allowing said judgment and denying said motion to vacate the order of reference, etc., and granting $200 extra allowance as in a difficult and extraordinary case.”

Appellant and her husband executed and delivered to the plaintiff on the 10th of January, 1885, a bond in the penal sum of $20,000, and an ordinary real estate mortgage collateral thereto covering premises situated in the city of Utica, particularly described in the complaint. On the 26th day of May, 1885, appellant and her husband executed another bond in the penal sum of $10,000, conditioned to pay $5,000 and interest; and as collateral security thereto they executed another mortgage covering the real estate mentioned in the complaint, and delivered the same to the plaintiff; and in connection with the usual allegations in the complaint for the foreclosure of mortgages, it is alleged, viz.; “And the plaintiff further alleges, upon information and belief, that Charles C. Kellogg, Patrick F. Bulger, Benjamin R Robson, Erastus Z. Wright, George S. Dana, Eliza Ross and Eliza K. Ross have, or claim to have, some interest in or lien upon the said mortgaged premises or some part thereof, which interest in, or lien, if any, has accrued subsequently to the lien of said mortgage.” The only prayer of the complaint for a personal judg- ■ ment is in the following words; “ That the defendants, Margaret Cranwell and George W. Cranwell, may be adjudged to pay any deficiency which may remain after applying all said moneys so applicable thereto, etc.” The complaint contains a prayer for the appointment of a receiver, and it was stated in the argument that a receiver had been appointed.

On the 21st of May, 1889, the appellant served an answer containing some denials, and “for a second and separate answer and defense and as a counterclaim, alleged and directed against the said defendants, Patrick F. Bulger and Benjamin R. Robson, and in answer to both counts and cause of action in said complaint

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set forth, the said defendant, Margaret Cranwell, impleaded with said other defendants, alleges that heretofore and on or about the 19th day of July, 1888, an agreement was made and entered into between said defendant, Margaret Cranwell, and said defendant, Benjamin R. Robson, and also said defendant, Patrick F. Bulger, acting as attorney for said Robson and in his own behalf, and to secure notes held by him, that said Cranwell should convey to said Robson the property described in said complaint, and also other property belonging to said Cranwell. * * * That in consideration thereof and therefor, said Robson should loan to said defendant Cranwell sufficient money to pay certain then pressing debts and obligations due from her to said defendant Kellogg and said Wright and Dana and said note to said Patrick F. Bulger, and for interest, insurance and taxes. * * * And the said parties, Cranwell, Robson and Bulger further covenanted and agreed that said Robson should reconvey the said property to said Margaret Cranwell two years from said date, by a good and sufficient, deed upon the payment to said Robson or said Bulger of the amount of money advanced or loaned by said Robson, or either of them, to said Cranwell, or paid out for her,-or on her account, to pay said specified debts to said Kellogg, Wright and Dana, and Bulger, or to plaintiff, with interest, insurance and taxes, and also the sum of $500 to said defendant Bulger for. his services and for the said loan or accommodation and as a bonus thereon. That said Cranwell agreed to retake or repurchase said property and pay therefor the said amounts so paid out by said Bulger and Robson, and the said $500, not to exceed the sum of $4,610, over and above said plaintiff’s mortgages; * * * and pay the sanie at the expiration of two years from said date ; that said deed to said Robson was and was intended to be only a mortgage upon said terms.” The answer contains numerous other allegations relating to the agreement between Mrs. Cranwell and defendants, Robson and Bulger, alleging divers breaches of the agreement between her and said defendants, Robson and Bulger ; and her answer contains a prayer for relief between her and Robson and Bulger, and that “ said agreement alleged between said defendants, Cranwell, Bulger and Robson, be declared, adjudged, and, if necessary, reformed, and thereupon specifically performed; and that said defendants be required to specifically perform, and in all respects to carry out the provision of said contract and satisfy said subsequent incumbrances, and that pursuant thereto said defendants, Robson and Bulger, be directed and required to hold and care for the property described in said complaint, and to keep the same free from the mortgages in said complaint described.” Before the trial a copy of her answer was served upon the defendants, Robson and Bulger. At the close of the evidence the referee held and decided, viz.: “ There is no defense made out here, and I think the plaintiff is entitled to the ordinary decree of foreclosure and sale in this case.” A report was made and delivered by the referee, and in a special finding-made by the referee in regard to the prior action of foreclosure commenced in 1886, the referee found: “ That such prior action

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was duly settled and discontinued, and an order to that effect duly entered in said clerk’s office prior to the commencement of this action.” There were sixteen requests to find conclusions of law made to the referee, and he refused; to such refusals exceptions were taken; and there were fourteen exceptions filed to the referee’s report. Bulger and Robson do not appeal.

M D. Mathews, for app’lt; H. J. Gookingham, for resp’t; William Kernan, for Bulger and Robson.

(1). We are of the opinion that there was abundant evidence before the referee to warrant his finding as a matter of fact that the action which was commenced by the plaintiff in 1886 to foreclose the mortgages now in suit was settled and discontinued prior to the commencement of this action. See folios 436, 439, 443, 446, 454, 457, and the stipulation signed by Ward Hunt, then plaintiff’s attorney, dated December 3,1886, found at page 92^ of the appeal book, and the order entered thereon in the Oneida county clerk’s office, in pursuance of the stipulation cancelling the notice of the pendency of the action filed November 13, 1886. Wormer v. Canovan, 7 Lans., 36 .

(2). Undoubtedly, as between the appellant and Robson, he was a mortgagee in possession of the premises at the time of the commencement of this action. After a careful examination of the defendant’s answer and the conveyance made by her to Robson, and the contract which was entered into by Robson with her to reconvey the premises to her at the expiration of two years, and after a careful scrutiny of all the evidence that was offered, as well as that which was received by the referee, we are of the opinion that the appellant had no defense to the bonds and the mortgages set out in the complaint as against the plaintiff; she was, therefore, not entitled to delay the foreclosure of the mortgages held by the plaintiff. Appellant has called our attention to § 521 of the Code of Civil Procedure; substantially the same provision was found in § 274 of the Code of Procedure. The latter section was construed in Mechanics’ & Traders' Savings Institution v. Roberts, 1 Abb. Prac. Rep., 381, where it was held, viz.: “ The affirmative relief which the court is authorized by § 274 of the Code to grant to a defendant is affirmative relief against the plaintiff only, not against a co-defendant.” Construction was also given to that section of the Code of Procedure in Kay v. Whittaker, 44 N. Y., 565 , and it was there held, viz.: “Under the provision of the Code, § 274, for determining the ultimate rights of the parties on each side, as between themselves, the relief which defendants may have, as against each other, must be based upon the facts involved in the litigation of the plaintiff's claim, and as a part of the adjustment of that claim, and not upon claims with which the plaintiff has nothing to do, and which are properly the subject of an independent litigation between such defendants.”

In Lansing v. Hadsall, 26 Hun, 621 , which was decided in this department in 1882, we followed Kay v. Whittaker, supra, and in the opinion delivered by Smith, J., it was further said: “The provisions of the Code referred to are simply declaratory of the

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pre-existing practice in chancery,” Jones v. Grant, 10 Paige, 348 ; and in referritig to the rule in Elliott v. Pell, 1 Paige, 268, and in stating the exceptional cases in which a decree should he made, the chancellor said it “ must be founded upon and connected with the subject-matter in litigation between the complainant and one or more of the defendants.” The rule has .recently been reaffirmed in Smith v. Hilton, 50 Hun, 239 ; 19 N. Y. State Rep., 340; Albany City Savings Institution v. Burdick, 87 N. Y., 40 .

In the case of Jones v. Grant, 10 Paige, 348, parties who were somewhat similarly situated to property affected by foreclosure proceedings sought by petition “for summary relief,” and the chancellor again asserted, the rule, and stated: “Ho such decree can be made between co-defendants, founded upon matters not stated in the bill, nor in litigation between the complainant and the defendants, or either of them.” In that case the petition was. dismissed, “ but without prejudice to the rights of the petitioners to proceed either by a suit at law, or by a bill in equity, founded upon the decree in this cause and the matters stated in their petition, to recover compensation in damages.”

We think it proper that the judgment in this case should be modified so as to contain a protective clause somewhat similar to the one we have just quoted, and as so modified, the judgment of foreclosure should be affirmed.

(3) . After the order made at the special term held at Rome on the 4th of June, the parties appeared before a justice of this court, who designated a suitable person to act as referee, and thereafter an order as of the term commencing the 4th of June was prepared and entered, and apparently, from the note at the foot of the order, it,was entered-with the clerk of Oneida.on the 27th of June, 1889. The reference was brought on for hearing before the referee named in the order. Ho motion was made to set the order aside until after the hearing of the referee. While that order stood the referee was fully commissioned by the. court to act as such referee. He therefore properly overruled the objections that were made before him in respect to his power to determine the issues between the plaintiff and the appellant. After his report was made upon the issue which he was authorized to hear and determine, and after his report was made in pursuance of an order authorizing him to compute the amount due as to the noniimswering defendants, which order was made at the Jefferson special term, a motion was made at the Onondaga special term to confirm the referee’s report and fora judgment; when that motion came on to be heard the appellant sought to have the order of reference vacated. ■

We think the special term properly denied the motion to vacate the orders of reference.

(4) . As to the order granting an extra allowance. We think a case was made calling for the exercise of the discretion of the court under § 3253 of the Code of Civil Procedure. The language of that section authorizes the court “ in its discretion ” to award “ in an action of foreclosure a sum not exceeding two and

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one-half per centum upon the sum due or claimed to be due upon the mortgage, nor the aggregate sum of $200.”

It was held in Morss v. Hasbrouck, 13 Wk. Dig., 393, third department, that such discretion will not be reviewed where there has not been an abuse of it. See also Hamilton v. Manhattan Railway Company, 29 N. Y. State Rep., 28. We think the order granting the allowance should stand.

Judgment modified by inserting a clause therein to the effect that the same shall be without prejudice to the right of the Cranwells to proceed either by a suit at law or a bill in equity to enforce the agreement set up in the answer against Eobson and Bulger or to recover compensation in damages, and as so modified judgment affirmed, with costs. See Jones v. Grant, 10 Paige, 351. Order appealed from affirmed, without costs.

Martin and Merwin, JJ., concur.