Hutchinson v. Wall — 56 N.Y. Super. Ct. 104

Majority

p. 104

JOHN HUTCHINSON, et al. v. FRANKLIN G. WALL, ET AL. In the Matter of the Application of the Plaintiff, Respondent, to compel John R. Foley, Appellant, to take Title.

Headnote

Foreclosure—Fur chaser when not relieved by reason of judgment directing payment of a claim not alluded to in the complaint.

A purchaser on a sale under a judgment of foreclosure and sale entered on default of all of the defendants, adjudging that plaintiff be paid out of the proceeds of sale a claim for a sum of money theretofore paid by him as interest on a prior mortgage, will not be relieved on the ground that the complaint did not allude to such claim, and made no demand for relief in regard to it.

Before Sedgwick, Ch. J. and Freedman, J.

Decided June 20, 1888.

Appeal by purchaser from order directing him to complete purchase made by him, at a sale under the judg- . ment in the action.

The action was for the foreclosure of a mortgage.

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The complaint alleged, among other things, that the defendants' had failed to comply with the condition of the bond and mortgage, by omitting to pay the sum of two thousand five hundred dollars, which became due and payable on October 27, 1887, and there was justly due the plaintiffs upon the said bond and mortgage, the sum of two thousand five hundred dollars, with interest from April 27, 1887, to October 27, 1887, at the rate of five per cent, and thereafter at the rate of six per cent.; and demanded that the defendants and all persons claiming under them subsequent to the commencement of this action, be barred and foreclosed of all right, claim, lien and equity of redemption in the mortgaged premises; that the said premises be decreed to be sold according to law; that the moneys arising from the sale be brought into court; that the plaintiffs be paid the amount due on the said bond and mortgage, with interest to the time of such payment, and the costs and expenses of the action so far as the amount of such moneys properly applicable thereto will pay the same.

The other facts sufficiently appear in the opinion."

Thomas Darlington, attorney, and Samuel Jones of counsel, for appellant, argued :—

I. The judgment in this case rendered was more favorable to the plaintiffs than that demanded in the complaint. Under § 1207 Code Civil Procedure this is prohibited Some of the defendants, more particularly Mrs. Chapman, are entitled to come in and set aside the judgment, and they are not confined to moving within the year., Simonson v. Blake, 20 How. 484 ; Andrews v. Moinlaus, 8 Hun 65 ; Willis v. Fairchild, 51 Super. Ct. 405. The case of Peck v. N. Y. & N. J. Railway, is not an authority against Mr. Foley, purchaser. In that case, Levy, the petitioner, was a bondholder, and the foreclosure Avas made by his trustee, for his benefit. He could not demand as a right to have the judgment vacated. The complaint

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was not before the court, and the court assumed that it was all right. The Peck foreclosure was all right and under that foreclosure, a good title was made and Demurest mortgage rights extinguished. Here as purchasers, we are directly interested. The judgment under which we are to take title, is a matter of record, must be examined by us, and we are directly chargeable with notice of its contents. The rule has been repeatedly declared that “the purchaser will not be compelled to accept a doubtful title, nor one where he can only acquire possession by litigation and judicial decision.” Jordan v. Poillon, 77 N. Y. 518 ; Shriver v. Shriver, 36 Ib. 575 and 584. The court of appeals merely decided that they had no jurisdiction of that case. The remarks of the court, having no jurisdiction, do not approve the course of the courts below; they say, p. 251: “It may have been improper.” On page 253 : “ The discretion may not have been wisely exercised, and injustice may have been done,” and they refer pointedly to “the petition of one situated like Levy.” In this case the parties ask relief against the purchaser. He, the purchaser, is rightfully here, and entitled to be heard. He is not an outsider. The complaint is here. It alleges only $2,500 and interest due and no more was due upon the mortgage, but upon some outside matters not alleged in the complaint, not a part of the mortgage, without bringing in the parties, or affording an opportunity of being heard, they take a judgment in direct violation of law.

Leavitt & Keith, attorneys, and John Brooks Leavitt of counsel, for respondent, argued:—

I. The order was right. Peck v. N. Y. & N. J. Ry. Co., 85 N. Y., 246 ; DeForest v. Farley, 61 Ib., 628 ; Blakely v. Calder, 15 Ib., 617; Thomas on Mortgages, § 1005.

II. If the court will permit a stranger to the record to impeach collaterally, not its j urisdiction to render its

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decree of sale, but the correctness of its decision as to the amount to be paid to the plaintiffs out of the proceeds, it will then be time enough to discuss the question argued by the appellant, whether the court was in error in following the usual custom of allowing a second mortgagee to tack on to his security interest on a first mortgage paid by him. It does not concern Mr. Foley. He need not trouble himself about it. Nor can he be allowed to do so. Peck v. N. Y. & N. J. Ry. Co., and others cases, supra.

III. Section 1207 of the Code cannot be invoked by a stranger to the action to support a claim that a judgment is without jurisdiction. See Opinion of Earl, J., in the Peck case, at page 250. .

IY. Section 1207 was not violated. The judgment granted was not more favorable than the judgment demanded. See Peck case, supra.

Y. Even if the court were wrong in determining the amount due, it was at most an irregularity, which can at any time, on the application of the right party, be corrected, without setting the sale aside. See Peck case, at page 251.

The action was in foreclosure of mortgage upon real estate. The judgment was taken by default against all of the defendants. It appears from the record, that the referee reported that the plaintiff had paid $507.50 as interest upon mortgages prior to the mortgage in action, and that the plaintiff was entitled to payment of the amount out of' the proceeds of sale. This conclusion of the referee was made part of the judgment. The complaint had not alluded to this claim of the plaintiff or made any demand for relief in regard to it.

The purchaser objected below, that he should not be compelled to take title because the defaulting parties could successfully object to the judgment so far as it gave plaintiff judgment for anything not demanded in

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the complaint, and those parties would after the purchaser had taken title have the right to have the judgment and sale under it, set aside.

In my opinion the rights of the defaulting defendants would be to have the judgment set aside so far only as it was defective in giving judgment for the amount of interest paid upon the prior mortgages, if they had such right, which it is not necessary to determine. This would not involve setting aside the sale.

The order is affirmed with $10 costs.

Freedman, J., concurred.

Cases cited

Jordan v. Poillon 77 N. Y. 518 N.Y. 1879-06-17 p. 106