5 Johns. Ch. 89 | New York Court of Chancery | 1821
The plaintiff Cook obtained ajudgmerit at law against the defendant Hisscher, on the 9th of Ju/y, 18 j7. There was, at that time, aud had been for some time previously, a suit pending in this Court, by Henry Ostrom, to foreclose a mortgage given by Gerrit G. Van Zandt. The defendant Vesscher, who was a purchaser under Van Zandt, and owned the equity of redemption, was a party to the bill of foreclosure. A decree for the sale of the mortgaged premises was obtained on the 25th of ■May, 1818, and a sale made by the master on the 21st of July, 1818, and the defendant Mancius became the purchaser for 2,000 dollars, which was 920 dollars beyond the balance of debt, interest and costs due, at that time, to Ostrom. The plaintiffs now seek to recover that surplus from Mancius the purchaser, or else to redeem the mortgaged premises, or for some other general relief, under the special circumstances disclosed in the case.
The plaintiff was a junior incumbrancer, and .became such pending the mortgage suit, but it was long prior to the decree, and it would seem upon principles of equity, that he was entitled to have his judgment satisfied out of the residuary interest of the defendant V., in the land, after the mortgage debt and costs were paid. He had an equitable lien upon that equity of redemption, or upon the surplus moneys arising upon the sale. By the terms of the decree in Ostrom’s suit, (and which terms were procured as will be hereafter explained,) the residue of the moneys, if any, were directed to be paid over to the defendant V., in whom the equity of redemption resided; and they were paid over, by his order, to the defendant M., so as entirely to exclude the claim of the present plaintiff. If the plaintiff had been a judgment creditor at the commencement of the suit to foreclose the mortgage, the mortgagee would have been bound to have made him a party, or else the decree and sale would not have taken away his right to redeem, even as against Mancius the purchaser. This prin
Before we look more particularly into the facts in this case, there are one or two preliminary points to be disposed of.
It has been made a question, whether the plaintiff Cook, , . „ 1 was a competent witness in the cause, inasmuch as he may be responsible for costs, though a naked trustee. But as r ’ his testimony does not appear to be essential to the determination of the case, I have assumed, for the purpose of this discussion, that the objection to the competency of his testimony was well founded, and have not regarded it.
Another objection is made to the want of parties. The plaintiff C., the legal owner of the judgment avers, that he holds it only as trustee for James Kane, who is a party to the bill We have, then, the trustee and cestuy que trus parties to the bill. But it was vaguely intimated in the answer, put in upwards of a year after the bill was filed, that Oliver Kane had some interest in the judgment, and it was proved by one of the witnesses, Thomas Bridgen, that the plaintiff K. informed him that his interest in the judgment had been assigned to O. K. When this information was given, or the assignment made, does not appear. He
The facts connected with the sale, form the equity of this case. Mr. Henry, the Solicitor for Ostrom, the plaintiff in the mortgage suit, says that he drew the decree of sale, and inserted therein the usual clause, “ that the residue (if any) of the moneys be brought into Court, to abide the order of the Court,” and that those words were, afterwards, obliterated from the draft, and the words “ paid to the defendant Fisscher” substituted, at the instance and upon the application of the defendant V. That alteration has probably produced the present suit. The solicitor acted without the knowledge of any judgment creditor existing entitled to the surplus, and without any suspicion of the design of the defendant V., who knew of the judgment, and who concealed that knowledge from the solicitor. Mr. Henry says he believed that V. would be entitled to the surplus moneys. The concealment from the solicitor, when he was requested to alter the decree, of the fact of there being an unsatisfied judgment creditor, whose lien attached upon the equity of redemption, is the circumstance of which J complain. It may be laid down as a clear rule of ethics, that it is wrong to procure an act to be done, which would
The decree was entered in May, 1818, as of course, and there is no evidence that the judgment creditor had any knowledge of the pendency of the suit upon the mortgage, until within a few days of the sale. In June, 1818, an arrangement was made between the defendant V, the owner of the equity of redemption, and the defendant M., the subsequent purchaser at the master’s sale, to secure those surplus moneys for their joint benefit. It would appear from the answer, that the defendant V. was indebted to the defendant M. on simple contract to the amount of 212 dollars and 15 cents; and the latter applied to the former for information respecting the mortgage suit, and the land to be sold under the mortgage, and understood from him that by the decree, the defendant V. would be entitled to the surplus moneys; and for his greater satisfaction, the defendant M. called at the solicitor’s office to look at the decree. The subsequent agreement between the two defendants, made on the 20th of June, ISIS, was, that the defendant M. should accept of an order from the defendant V. upon the master, for the surplus moneys, whatever they might be, in full of the above simple contract demand. On the day of sale, the defendant M. attended as a bidder, and on that day, hut previous to the sale, the order was drawn. He says, that his motive in attending the sale, was to purchase, in order to secure his demand, according to the above arrangement. The defendant accordingly discovered an anxiety to have the sale go on,, and urged it on, though the plaintiff’s counsel was present and pressing a postponement. The latter offered his check, or that of another person, for the mortgage debt and costs, to the agent who attended on behalf of the solicitor for Ostrom, the mortgagee. The plaintiff C. offered, moreover, to procure the money, if the check was objectionable, but he was referred to another immediate agent of Oslrom, who was present, and does not recollect
The plaintiff C., who had made unavailing efforts to stay the sale, or to discharge the mortgage debt, and preserve the lien of his judgment, took other steps to prevent the surplus moneys from passing under the control of the defendant V. Here, also, his vigilance failed him. The attorney for the plaintiff C., and in his name, gave written notice to the master immediately upon the sale, that he was the holder of an unsatisfied judgment as trustee of the plaintiff K., and that he was entitled to the surplus moneys on the sale of that day. It seems extremely probable from circumstances, that this notice came immediately to the knowlege of 3Í., the purchaser. He had a conversation with the attorney of the plaintiff C. prior to the sale, relative to the plaintiff’s, judgment; and just before the sale the defendant M. had a conversation with the plaintiff C., relative to the amount necessary to be hid, in order to make the requisite surplus to satisfy the judgment. The purchaser M. was thus duly apprized, when he purchased, not only of the existence of the judgment, but of the actual and avowed claim of the plain-jiff C. to the surplus. The master as well as the purchaser
The defendant M., by this arrangement with the defendant V., and by his purchase, with knowledge of all the equity of the plaintiffs’ case, and with explicit and monitory notice, not only obtains payment of his simple contract debt, out of land bound by a judgment, and in preference to that judgment, but he makes an absolute profit of 704 dollars and 85 cents; nor is this all. On the 15th of August, 1818, (being only twenty-five days after the sale, but subsequent to the commencement of this suit,) he contracts to sell the land for 4,000 dollars, and a deed was afterwards executed in pursuance of that contract, and the consideration secured.
It appears to me, that the plaintiff’s lien upon the equity of redemption ought not to be defeated by the transactions which took place, and that he has pressing claims upon the Court for its assistance. There can be but one question in the case, and that is, as to the most suitable and effectual relief to be afforded to the plaintiff. The prayer is for general, as well as for particular relief; and any relief may be granted suitable to the case, and consistent with the allegations and proofs. I consider that the plaintiff is entitled to redeem, as against such a purchaser, acting with such previous arrangement with the owner of the equity of redemp
I shall, accordingly, decree a reference, to ascertain the amount due to the plaintiffs, and that the defendants pay the amount thereof, together with the costs of this suit, within thirty days after notice of this decree; or in default thereof, and upon the plaintiff’s bringing into court, for the use ofthe defendant M., the 1,080 dollars, (the amount of the mortgage debt and costs,) togetberwith interest thereon, from the 26th day of July, 1818, (the time ofthe purchase,) and upon bringing into Court, to be cancelled, the sheriff’s deed upon the sale of the mortgaged premises tb the plaintiff C., on the 24th of July, 1818, that then, and in such case, the premises be sold by a master, on the usual notice, to satisfy the mortgage debt and costs and interest, and the amount to be reported due to the plaintiffs upon the judgment, and the 10 dollars paid on the purchase under the sheriff’s sale, and the costs of this suit.
Decree accordingly.