Barnes v. Decker — 49 N.Y. Super. Ct. 221

Majority

p. 221

AMBROSE E. BARNES, Appellant, v. PETER P. DECKER, et al., Impleaded, &c., Respondent.

Headnote

Foreclosure of mortgage—right to redeem—pan-ties.

The- owner of real property, parcel B, subject to a mortgage which also covers other property, parcel A, in which last-named property he has no interest, is not a necessary party to an action to foreclose a prior mortgage

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on said parcel A; and though the said parcel A be sold under the decree for such sum as leaves nothing to be applied on the second mortgage, covering also plaintiff’s premises, he cannot, by virtue of his said ownership of parcel B, be allowed to come in and redeem.

Before Sedgwick, Ch. J., O’Gorman, and Ingraham, JJ.

Decided May 9, 1883.

Appeal by plaintiff from judgment ordered at special term, dismissing the complaint.

The facts are as follows: There were two parcels of land in the city of New York, which may be called respectively A and B. Upon A there was a first mortgage and also a second mortgage, which second mortgage was also upon B. B was conveyed to the plaintiff, and was made by the conveyance subject to the mortgage upon it, it being recited that such mortgage rested in part upon other land. The first mortgage upon A was foreclosed. The plaintiff in the foreclosure action made as a party defendant one Schwenke, who had been the owner of the second mortgage, but before the foreclosure action had assigned it to the attorney, who appeared for the plaintiff in the foreclosure action. Schwenke had no knowledge of the pendency of the action, but an attorney appeared for him, at the request of the attorney for plaintiff in that action. The usual judgment of sale and foreclosure was entered. At the sale, the property was sold.at such a sum, that there was no surplus to be- applied to the second mortgage. It was bought by the plaintiff in that action. There was a claim upon the trial, that the conduct of the parties connected with the foreclosure was fraudulent as to plaintiff in this action , but as the relief he claimed depended upon his right to redeem the first mortgage of A, the subject of the foreclosure, enough facts have been stated for the purpose of the decision. The claim to redeem was placed upon the fact that parcel B was subject to the mortgage, the payment of which it was claimed should be borne, in whole or in part, by parcel A. The plaintiff demanded judgment, that he be entitled to redeem, etc.

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Charles W. Dayton, for appellant.

R. Clarence Dorsett, for respondent Decker; Harrison & Langdon, for respondents Blake, Wheeler and Harrison; Abner C. Thomas, of counsel.

The proper function of a foreclosure action is to extinguish the right, reserved by courts of equity to the mortgagor and his legal representatives, and termed the equity of redemption. This right belongs solely to the mortgagor and those who have derived the same interest in a lien upon the mortgaged premises under him. The person asking to redeem must have not only a jus ad rem, but a jus in re (Story's Eq. Jur., § 1023; Grant v. Duane, 9 Johns. 612 ; Lomax v. Bird, 1 Verm, 182 ; Boardman v. Catlett, 13 Sm. & Marsh. [Miss.] 149; McDougald v. Capron, 7 Gray, 278 ; Porter v. Reed, 19 Maine, 363). There is another right than the right to redeem which is similar to it, and the confusion between these two rights is all that gives any color to the plaintiff’s argument. That is the right which every surety has to pay the debt and be subrogated. In some cases it is not a matter of great importance to determine whether the one right or the other is being exercised; but they rest on entirely different principles and are easily distinguishable from each other (Ellsworth v. Lockwood, 42 N. Y. 89 , 97). The right to redeem is an interest in the title junior to the mortgage lien. A right to pay and be subrogated, grows out of the obligation of suretyship. Those holding any portion of the title are necessary parties to the action to foreclose, but no mere surety is a necessary party. Thus, a mortgagor who has conveyed the title is not a necessary party to the action (Drury v. Clark, 16 How. 424 ); though such a mortgagor, if his grantee has assumed, may pay the debt and demand an assignment of the security (Johnson v. Zink, 52 Barb., 396 ). So, the personal representatives of a deceased mortgagor are not necessary parties to the foreclosure, though they may eventually be liable for deficiency (Leonard v. Morris, 9 Paige, 90). And the

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creditors at large of a deceased mortgagor who have not obtained any judgment lien cannot become parties, even on their own application (The People v. Erie Railway Co., 56 How. 122 ). It has also been held that, when a part of the mortgaged premises has been alienated by the mortgagor the grantee is not a necessary party to foreclose as to che balance remaining in the mortgagor (Hosgood v. Nichols, 1 Paige, 220).

It is provided by statute, with respect to a referee’s deed in an action to foreclose, as follows : “ Such a conveyance is as valid as if it was executed by the mortgagor and mortgagee, and is an entire bar against each of them and against -each party to the action, who was summoned, and every person claiming from, through or under a party by title accruing after the filing of the notice of the pendency of the action (Code, § 1632). Such a deed is, therefore, equivalent to a deed executed by the plaintiff, and all the defendants (Parker v. Rochester & Syracuse R. R. Co., 17 N. Y. 283 ), and if a conveyance by all of the parties to an action to foreclose a mortgage, would convey a complete title, then all necessary persons have been joined. In this case there can be no doubt that a grant from all of the persons joined as' defendants in the foreclosure would have been ample to carry every interest, and that no deed from the plaintiff would have been required to perfect the title. The plaintiff had no interest in the title to be covered by a conveyance.1

The precise question as to the necessity of making a person holding an interest in the land bound for a mortgage debt a party to a foreclosure against other land also bound for the same debt, was determined in Kirkham v. Dupont,

Cal. 559. In this case A. and B. owned land in common, which they mortgaged to secure a debt of A.' Afterward A mortgaged his individual interest to D. The first mortgage was foreclosed without making the junior mortgagee of A.’s share a party. In an action to foreclose the junior mortgagee he offered to reclaim the whole of the property mortgaged. It was held that he could not do this, and that the sale was absolute, and that he could only redeem as to

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the interest on which he had a lien. (See also Green v. Dixon, 9 Wis. 532 ; Hosford v. Nichols, 1 Paige, 220).

—[After stating the facts as above.]—At the time of the action for foreclosure, the plaintiff had no interest in the premises mortgaged. He was not an owner of any incumbrance upon the premises. Of course he had not any title to the second mortgage upon parcel A, and which was upon his land, parcel B. It may be supposed that upon his paying or tendering the amount of the second mortgage, he might acquire an interest in the mortgage, so far as it affected parcel A. This would have involved an affirmative act, from which he voluntarily refrained. He having no interest in the equity of redemption of parcel A. it was not required of the plaintiff in the foreclosure action to make the plaintiff here a defendant in that action, for the purpose of foreclosing such right of redemption as was connected with the second mortgage. On the other hand, this right of redemption was foreclosed, not simply because the former owner, Schwenke, who appeared upon the record to be the then present owner, was made a defendant, but because the real owner was the attorney for that plaintiff and would be by force of the record estopped from claiming that the owner of the mortgage was not foreclosed. There is, moreover, no proof that the plaintiff conspired with his attorney, who was the owner of the second mortgage, to make Schwenke a defendant, instead of the real owner, for the purpose of misleading the plaintiff, nor is there proof that he was misled thereby.

As the relief demanded upon the trial was based upon the claim to a right to redeem, there is no necessity of inquiring if the plaintiff had, at any time, any other kind of relief.

Judgment affirmed, with costs.

O’Gorman and Ingraham, JJ., concur.

Cases cited

Ellsworth v. Lockwood 42 N. Y. 89 N.Y. 1870-03-18 at 97 p. 223
Packer v. Rochester & Syracuse Railroad 17 N. Y. 283 N.Y. p. 224