Bolles v. Duff , 41 How. Pr. 355 ( 1870 )

By the Court.—Peckham, J. [After stating the facts].

Is the judgment in the suit of Roberts against Whitney, a bar? I incline to think it is not. It is settled in this State that in an ordinary action for foreclosure and sale of the premises, the usual decree for that purpose is final, so far at least as to be appeal-able to this court, without waiting for the order confirming the report of sale (Morris v. Morange, 38 N. Y., 172).

In England a strict foreclosure was the usual remedy. The power to give possession to the purchaser on a foreclosure sale was doubted, but finally exercised by the court of chancery (See Kershaw v. Thompson, 4 Johns. Ch., 609, and cases cited). By our statute the court was given power over the whole subject, though the act was in a good degree declaratory (2 Rev. Stat., 191, 192). Strict foreclosures are now rarely pursued or allowed in this State, except in cases where a foreclosure has once been had and the premises sold, but some judgment creditor or person similarly situated, not having been made a party, has a right to redeem-; —as to him a strict foreclosure is proper.

In general a mere strict foreclosure is a severe remedy. It transfers the absolute title without any sale, no matter what the value of the premises.

The defense in this case claims that the suit of Roberts •y. Whitney and Earle was simply to redeem, and that the failure to pay the sum decreed to be due within the time allowed, and the complaint being dismissed, operated as a strict foreclosure, and the estate of the mortgagor was thereby forfeited (Ferine v. Dunn, 4 Johns. Ch., 140, and cases there cited ; Beach v. Cooke, 28 N. Y., 535 ; Hansard v. Hardy, 18 Ves., 460 ; Wood v. Surr, 19 Beav., 551).

But the main purpose of that suit was not merely to redeem. The object was to have the assignment to Whitney and Earle (which was absolute on its face) adjudged to be in fact merely a mortgage. After a long litigation as to that point, the assignment was so held.

The time allowed to a party, to pay the amount deemed to be due on a bill to redeem,, is usually six months (Perine v. Dunn, supra; Smith Ch. Pr., 2 ed., 275). In the case at bar but two months were allowed, though the case had been defended upon a false and unconscientious claim, and the amount to be paid was large.

The court in making that decree, did not probably have their attention directed to its effect, in case the plaintiffs should be unable to pay within the specified time; and though it specifies nothing as to its being or operating as a foreclosure, in case the plaintiff fail to pay, yet it is in that respect in the usual form of decrees in such cases (Smith Ch. Pr., 2 ed., 725).

But if the defendant Duff insists upon this forfeiture, he must show that the decree clearly gives it to him. It seems that there never was in this case any final order obtained (upon proof of the fact that there had been no payment) that the complaint should stand dismissed. The authorities in England are quite uniform that this final order is necessary in a strict foreclosure, and that until that final order is obtained, the mortgage is. not foreclosed, and no title passes to the mortgagee (2 Dan. Pl. & Pr., 1205 ; Sheriff v. Sparks, 1 West., 130 ; Thompson v. Grant, 4 Madd., 438; Faulkner v. Bolton, 7 Sim., 319 ; 2 Fish, on Mortg., 1037, § 1881 ; Smith Ch. Pr., 725; Hansard v. Hardy, 18 Ves., 460; Wood v. Surr, 19 Bear., 551). No case is cited in this State to the contrary of this rule ; but Chancellor Kent, in Ferine v. Dunn (supra), seems to give it sanction. See his comments there as to the case of Jones v. Hendrick.

Without extending this rule beyond the cases to which it is now applied, I think it sound in its application here, to a strict foreclosure, implied from the dismissal of a bill to redeem. Until that order be obtained, the records of the court do not show which party has finally obtained the judgment, or who is the owner of the land. Until that order is obtained, the complainant may apply to have the time to pay the'amount decreed to be due, extended.

There are several objections as to the decisions of the court upon admitting or rejecting evidence. But this disposition of the case makes them immaterial.

The action is properly instituted by this receiver under the circumstances of this case, and I think substantial justice is done by the decree. The main complaint of the defendant Duff is that he is not permitted to make a speculation at the expense of the creditors of Trimble, and perhaps of Trimble too, if the proceeds of the property should reach him. If Duff is in any degree right in his estimate of the value of the property, the question of Trimble’s participation in any part of the proceeds of this property can never be a practical one. But no facts are found that exclude him.

The order appealed from is reversed, and the judgment of the special term affirmed with costs. •