Majority
p. 485Gustavus Wolfers, Pl’ff, v. John J. Duffield et al., Def’ts. (Supreme Court, General Term, First Department, Filed October 13, 1893.)
Headnote
Foreclosure—Surplus proceedings—Stay.The distribution of the surplus on a foreclosure sale will not be stayed to await the determination of a pending action brought by the heir of a former owner of the land to set aside his deed on the grbund of fraud, as all questions as to the fraudulent character of the conveyance can be tested in the surplus proceeding.
Appeal by Mary J. Vaughan from an order of the special term denying motion to stay proceedings before the referee in an action for the distribution of surplus moneys.
The facts as to the action by Miss Vaughan to set aside the deed are as follows: On November 15, 1876, Thomas Vaughan, the father of Mary J. Vaughan, conveyed the premises to one John Hayes, whose deceased wife was the daughter of said Thomas
p. 486
Vaughan. The conveyance was alleged to have been without any consideration whatever, and to have been obtained by fraud. On the day after such conveyance was made Thomas Vaughan died. In May following Miss Vaughan, who was then his only heir at law and the sole beneficiary under his will, brought-suit against Hayes, by her guardian, she being then an infant, to set aside the conveyance, alleging that at the time it was made Thomas Vaughan was utterly incapacitated from attending to any business whatever, and that it was procured by Hayes by fraud. Issue was joined, but the action has not been brought to trial. At the time of the conveyance to Hayes the premises were subject to a mortgage of $15,000 to Grustavus Wolfers, plaintiff in the foreclosure Suit, which had until July 22,1878, to run. The first instalment of interest on that mortgage, after the deatli of Vaughan, amounting to $525, came due on January 22, 1877. Hayes failed to pay the interest, and early in April the mortgage was foreclosed in a suit in which Wolfers was plaintiff and Hayes was the only defendant, Hayes not answering, and the premises were sold, by virtue of the judgment of foreclosure obtained by default on July 11, 1877, to defendant John J. Duffield. At the time of the conveyance to Duffield he gave back to Wolfers a mortgage of $15,-000, which is the mortgage foreclosed in this suit.
Bliss & Schley (W. T. Schley, of counsel), for app’lt; P. H. Vernon, for resp’t.
As in the surplus proceedings all questions as to the fraudulent character of the conveyances can be tested, there seems to be no reason why these proceedings should be stayed until -the revival and trial of an action commenced sixteen years ago. The appellant in that action would have no right to a trial by jury if it is an action to set aside a conveyance as fraudulent. If the appellant’s action is for the recovery of damages for fraud and deceit, a recovery in the action would in no way establish any lien upon the surplus moneys in the proceeding. The order appealed from should be affirmed, with costs.
Van Brunt, P. J., and Parker, J., concur.