8 Paige Ch. 511 | New York Court of Chancery | 1840
decided, that on sales under decrees made subsequent to the act of May, 1840, to reduce the expense of foreclosing mortgages in the court of chancery, the surplus moneys arising upon the sale, beyond the amount of the complainant’s debt and costs, and of the pri- or liens upon the premises, could not be disposed of, or ordered to be distributed, until after the master’s report of the sale had been filed and such surplus moneys brought into court; that as judgment creditors, and others, who were not made parties to the suit, and whose liens or claims upon the mortgaged premises were subsequent to the complainant’s mortgage, would be foreclosed by the sale, they must have an opportunity to come in and make their claims to such surplus, according to the 136th rule of the court; that the answer of the defendants, setting up their junior mortgage, was not evidence of the existence of that mortgage as against defendants who suffered the bill to be taken as confessed, or against incumbrancers who were not made parties; and that such incumbrancers would still have the right to insist that such mortgage was not due, or that it was junior to the judgments or decrees under which they claimed.
But the chancellor held it was proper that sufficient of the premises should be sold to satisfy the junior mortgage of Suydam, Sage & Co. without the expense of a new foreclosure suit; so far as it could be done consistently with the rights of the other incumbrancers. He therefore directed the master to inquire, preliminarily, what was due to those defendants upon the mortgage set up in their answer, and what was due upon all prior liens upon the mortgaged premises subsequent to the complainant’s mortgage, and then to sell enough of the premises to satisfy the amounts thus ascertained, as well as the complainant’s debt, and costs; and to bring into court all the surplus
