Candee v. Burke — 8 N.Y. Sup. Ct. 546

Majority

p. 546

WILLIAM CANDEE, Respondent, v. S. ANGELINE BURKE AND OTHERS, APPELLANTS.

Headnote

Foi'edosure by advertisement—Notice of sale—Surplus money — Effect of receipt of, by mortgagor — Foreclosure sale —purchaser at, necessary party to am, action to home it declm'ed void.

In foreclosure by advertisement, if the notice of sale gives to the public the means of ascertaining the facts, required to be stated in the notice of sale, by accurate reference to the record of the mortgage in the clerk’s office, it is enough; and a strict conformity to the provisions of the statute, is not essential to the validity of the foreclosure. '

The receipt of surplus money on a foreclosure sale by the mortgagor or his representatives, does not estop the party from questioning the validity of the sale, though it is evidence to be considered in passing on the question of the regularity of the proceedings.

The purchaser at a foreclosure sale is a necessary party to any action to have the sale declared void.

Appeal from a judgment entered on the verdict of a jury at the Onondaga circuit. The action was in ejectment to recover possession of four parcels of land situated in Onondaga county. The defense interposed is set forth in the opinion.

J. O. Hunt, for the appellants.

William O. Huger, for the respondent.

This appeal is in the same action in which the judgment on the demurrer has just been affirmed; this being an appeal from the judgment, on the merits.

p. 547

It becomes necessary to state more fully the defenses set up by the defendant in his answer, than was done in deciding the appeal from the judgment on the demurrer.

The first defense denies the complaint, except two or three allegations.

The second, third and fourth defenses set up an adverse possession of the one hundred acres, secondly described in the complaint, by Enos Burke, the husband, S. Angeline Burke, and the father of the other defendants, and, since his death, for more than twenty years prior to bringing the action.

In the fifth defense, it is alleged that S. Angeline was married to Enos Burke, in 1839, and that, during the time they lived together as husband and wife, he became seized in fee of said one hundred acres, secondly described in the complaint. That Burke died in 1862, leaving said Angeline, him surviving; that she had not joined him in any conveyance of said land, and that she is entitled to possession, etc., of one-third part of said land, as for her dower therein.

In the sixth defense, it is alleged that, in August, 1842, Burke and said S. Angeline mortgaged said one hundred acres, secondly described in the complaint, to one Remington, for $1,800 ; that in 1844, said premises were sold on foreclosure of said mortgage, and bid in by one Worden. That S. Angeline was not a party to said foreclosure. That Burke remained in possession, claiming title, and the defendants have been in possession since his death, claiming title under Enos; and that her right of dower has not been barred, and she is now entitled to dower therein, and to redeem the same.

The seventh and eighth defenses set up adverse possession to the one hundred acres, just described in said complaint.

In the ninth defense, Mary Burke alleges title to one-third of one-seventh of the parcel, thirdly described in said complaint.

In the tenth defense, the defendants allege that, in August, 1844, an arrangement was made between Enos Burke and the plaintiff, and Daniel Oandee, by which, Burke was to convey to them the one hundred acres firstly described in the complaint, and caused the other one hundred acres to be conveyed to them by Hicks Worden, in order to defraud said Burke’s creditors; and that the conveyance was made accordingly.

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The eleventh defense is a like defense of fraud, as to the other parcels of land described in the complaint.

Defendants put in an amended answer in addition to the former answer, in which they alleged the said several parcels of land were conveyed to the plaintiff as security, and subject to their right to redeem,- and alleging that the whole amount advanced by the defendant had been paid, and praying an accounting and conveyance.

The defense set up in this answer, and such of the defenses in the former answer as set up a counter-claim, were replied to, setting up a former suit for the same cause of action, in bar, in which the judgment was for the defendant.

After the entering of judgment on the,,demurrer, the parties went down to trial on the issues of fact. The plaintiff gave in evidence, deeds to himself and Daniel Can dee, of the two hundred acres described in the complaint, and a deed from Ruth Graham and others, to plaintiff, of the remaining parcels. He also put in evidence the mortgage from Burke and wife to Remington, above mentioned, and offered the proceedings to foreclose said mortgage by advertisement, which evidence was objected to by defendant’s counsel, on the ground that the mortgage had not been legally foreclosed.

The objections to the proceedings were,

First: That S. Angeline Burke was not served with notice of the sale, and her right of redemption remained, and that, as to her interest, there could be no recovery.

Second: That the same right of redemption extends to the heirs of Burke who are in possession with her.

Third: The foreclosure was absolutely void, because the notice of sale did not contain the name of the mortgagee.

In order to meet and remove the objection to the foreclosure, the plaintiff put in evidence a receipt from Burke for the surplus moneys arising from said sale: also the evidence of one Edwards, taken on a former trial, that “ the surplus money was received by Burke and Worden.” It would seem to have been the opinion of the plaintiff’s counsel, as well as of the court, that the receipt of the surplus moneys estopped Burke, and those claiming under him, from questioning the regularity of the foreclosure. It was

p. 549

said by the chancellor, in Wood v. Jackson^[3] that the receipt of the surplus moneys, arising from a sale of land on execution, did not preclude the owners from questioning the validity of the sale, as they had done nothing to encourage the purchasers to bid. I am unable to perceive any reason why the same principle should not be applied to the receipt by the mortgagor or his representatives, of surplus money arising on the sale of the mortgaged premises. Although the receipt of the surplus may not estop the party, it would seem to be evidence to be considered in passing on the question of the regularity of the proceedings. If the owner retain the surplus money, no court would set aside the foreclosure, without requiring him to refund what he had received.

The question recurs, was the foreclosure void, because Mrs. Burke was not made a party, or because the mortgagee’s name was not inserted in the notice % The only effect of omitting to serve on Mrs. B., was to leave her right of redemption unforeclosed, which she may assert at any time; it does not render invalid the foreclosure as to the other parties properly served. Had the name of the mortgagee been altogether omitted from the notice, there would perhaps be some ground for holding the foreclosure irregular, as not complying with the requirements of the statute. But his name is signed to the notice of sale, and the mortgage is in all other respects correctly described.

If the legislature, in prescribing the contents of the notice, intended to secure to the public, accurate information as to the mortgage, and. description of the premises, and not strict compliance with its provisions, the notice in question gives effect to the intention. If any person desired to know who the mortgagee was, who was not fully satisfied that the person signing the notice was such, could readily inform himself, by reference to the book in the clerk’s office, mentioned in the notice.

The case of Judd v. O’Brien^[4] is authority for holding, that, if the notice of sale gives to the public the means of ascertaining the facts, required to be stated in the notice of sale, by accurate reference to the record of the mortgage in the clerk’s office, it is enough; and a strict conformity to the provisions of the statute, is not essential to the valdity of the foreclosure. There is, however,

p. 550

another and more conclusive answer to the objection of defendants’ counsel, and that is, that the sale cannot be declared void, except in a proceeding, to which the purchaser Hicks Worden is a party. He is not a party to this suit. Worden may have conveyed with covenants; to declare the sale void, is to divest him and his grantor of the title, and to subject him to liability on his covenants. This, surely, should not be done, without affording him an opportunity to be heard.

The defendants’ counsel objected, on various grounds, to the admission in evidence of the judgment record in the former suit, and which was set up in plaintiff’s reply, as a bar to the relief demanded in such former suit.

It is unnecessary to consider these objections, as the judgment on the demurrer, that defendants ’ counsel permitted to be entered against his client, instead of asking him to withdraw his demurrer, which, if done, would have left the reply denied, rendered unnecessary any proof of the former action, as they were admitted, for all purposes of the action, by the demurrer.^[3]

The will of Daniel Candee was properly received in evidence. The plaintiff took under a conditional estate in fee, and, until a breach of the condition, he could maintain an action of ejectment.^[4]

The defendants’ counsel claimed the right to give evidence in support of his defenses, setting up adverse possession by the defendants and their ancestors, for more than twenty years before suit was brought. The court refused to permit such evidence to be given, holding that the judgment in the former action, was a bar to the defense of adverse possession. To which ruling, the defendants’ counsel excepted. The only subject for inquiry, is, whether the question of adverse possession was involved or decided in the former action; if it was, the judgment in that .case, forbids an investigation of that subject in this action. Ho such allegation is made in the complaints in the former action, nor is there any adjudication on that question. Indeed, a claim of adverse possession in that action, would have been inconsistent with the claim for redemption, resulting from. the relation of mortgagor to mortgagee. I entertain no doubt but that the defendant was entitled

* Cutler v. Wright, 22 N. Y., 472 .

† † 4 Kent’s Com., 123, 540; Olmsted v. Harvey, 1 Barb., S. C., 102 .

p. 551

to give evidence on the trial, under his defense of adverse possession.

The defendants connot he permitted to set up the alleged combination between Enos Burke and Daniel Candee, and the defendants, to defraud the creditors of said Burke; with that question they have nothing whatever to do. Burke could not set up any such defense, and his heirs are estopped, as well as himself.

If the defendant Mary Burke is entitled to any share of said lands, the share can be ascertained on the next trial.

The judgment must be reversed, costs to abide event.

Judgment reversed, costs to abide event.

Footnotes

* 8 Wend., 9 , 31.
† † 21 N. Y., 186 .