84 N.Y.S. 359 | N.Y. App. Div. | 1903
The question presented, is whether, in an- action such as this,-the contingent’ remaindermen were necessary, partiesor, differently
The learned judge at' Special Term in granting the motion compelling the purchaser to complete its purchase, stated that the doctrine of Nodine v. Greenfield (7 Paige, 544) “ has been repeatedly followed, never overruled, and must now be deemed the established law of this State.” In view of the controlling influence which this decision exercised over the Special Term, it becomes important to examine into the facts of that case, and see precisely what questions were determined. The objection to the title therein was that children who were in existence at the time when the bill of foreclosure was filed, and who were the first devisees of the remainder in fee after the termination of the life estate of the widow, were not made parties to the suit. The contention that their equity of redemption was, therefore, not extinguished at the time of the sale in that suit, was sustained, and in the opinion it was said : “ Where there is a contest in chancery in relation to real estate, or where a mortgagee wishes to foreclose a mortgage, in a case where there are several future and contingent interests in the equity of redemption, it is not necessary to make every person having or claiming a future and contingent interest in the premises a party to the bill, in order to bar his right or claim by the decree in the cause; but is sufficient if the person who has the first vested estate of inheritance, and all other persons having or claiming prior rights or interests in the premises, are brought before the court.” While this decision, therefore, directly decided that certain vested remaindermen were necessary parties, we have dicta from which the rule, frequently followed, has been deduced that in foreclosure actions it is only necessary to bring into court as parties those having the first vested estate of inheritance and those having prior rights.
In ordinary foreclosure suits we have thus the general rule established that it is sufficient to have as parties the first person in being who has a vested estate of inheritance, together with those claiming prior interests; and that in such suit those who may have a claim in remainder or in reversion after such vested estate of inheritance may be omitted as parties. This rule was based upon the English authorities and upon the fact that at common law contingent remainders were regarded as being mere possibilities which could
As affecting foreclosure suits, taking the rules as stated to' be established, it remains to be determined whether or not this is a •simple foreclosure suit. Its purpose is to establish an equitable lien upon this property; and to that end it seeks, fh’st, to set aside two satisfaction pieces of mortgages filed many years ago, and to re-establish ‘such'mortgages, and then to foreclose them. Here it appeared that the property in question was owned by one Joseph Rosenfield, and that after his death the. executors and special guardian of his children executed two mortgages pursuant to chapter 257 of the Laws of 1886 (as amd. by Laws of 1891, chap. 209). The Court' of Appeals in Zosey v. Stanley (147 N. Y. 560) held that under the provisions of that law the trust estate only could be mortgaged and that the estate in remainder would not be- affected by any mortgage authorized under that act. As this mortgage which the plaintiff held, therefore, did not cover all the interest which Joseph Rosenfield had in the property at his death, but only covered the trust estate held by the executors, it is sought in this action to re-establish the mortgage which was a lien on the entire estate or interest which Joseph Rosenfield had in the property at the time of his death. This, together with the other mortgage sought to be reinstated as a lien, was long since satisfied. To re-establish these mortgages as liens, testimony was introduced tending to show that the money obtained by the executors upon the mort
An action such as this, which is intended to establish an equitable lien which shall be more extensive than the mortgage which the plaintiffs held, and then to foreclose such lien when established, is, in our opinion, something unlike and dissimilar to an ordinary foreclosure suit. Were it sought to create a mortgage on the property, then, seemingly, in such an action, all persons having an interest in the property should be made parties. With respect to those having an interest therein, what is the difference in principle or in result between an attempt to create a mortgage on the property and re-establishing a mortgage thereon which has been once legally satisfied ? By the amendment made in 1897 to section 87 of the Real Property Law (Laws of 1896, chap. 547, as amd. by Laws of 1897, chap. 136) it was provided that a trustee could not be authorized by the court to make a mortgage binding his estate and future estates until written notice of the application had been served upon “ the beneficiary of such trust and every other person in being having an estate vested or contingent in reversion or remainder in said real property.”
In an action such as this wherein it is sought to establish an equitable mortgage or lien, seemingly the same practice should be followed with a view to effectually cutting off contingent interests in the property.
Here the infant son of Mrs. Jeffries, it is claimed, has a contingent estate in the premises; and it is agreed, we take it, that as such he would have been a proper party. The plaintiffs insist, however, that he is not a necessary party. It is not essential for us to determine flatly that he is (which is the view we would be inclined to take if a decision were required); but to render this title unmarketable it is only necessary that upon that question there exist a
To obviate the objection made, certain of the respondents suggest that under the will as it should b'e construed the alleged contingent remaindermen had no interest in the property. It is urged that the purchaser should be compelled to take .on the ground that, under the will of their father, Joseph Rosenfield, the children then alive took a vested estate absolutely upon the remarriage of their mother, and that, therefore, there was no contingent remainder in favor of their issue or any one.else outstanding. We would gladly assent to this view as a means of curing the objection if such a construction -were entirely free from doubt ; but where, as here, there is a serious dispute as to the construction of the will, we can only repeat what has already been said in our discussion of another point that before reaching a determination which would exclude the son of Mrs. Jeffries, who it is insisted has a contingent estate in the property, he ought upon.that- question to have his day in court. The other contention, that this purchaser acted at the sale with knowledge of the fact that this contingent remainderman was not a party and is, therefore, estopped, is, we think, equally without merit. The bank, wanting the . property, was not required, even with the knowledge of the question involved, to permit ’ some one else to purchase it a lower price, perhaps eventually to' find that the title would be upheld as marketable and good; This would be asking the bank to run the risk- of losing- the property. It had the right to purchase at the. sale, even though it knew of and intended to raise the question affecting the title, and thus submit,, as in this case was done, to the court its rights as a purchaser.
Having reached the conclusion that this is not a simple foreclosure suit, and that there is no disposition to extend the rule as to necessary parties in actions affecting real estate, it is sufficient for the determination of the present appeal to say-that upon the ques-. tion Whether the contingent remaindermen were or were not neces-. sary parties — which we are not called upon to decide — there is such a grave doubt that the Special Term should not have compelled the purchaser- to complete the.sale and accept a title which, in the face of this objection, was, we think, unmarketable.
Hatch and Laughlin, JJ., concurred; Van Brunt, P. J., concurred in result; Patterson, J., dissented.
Order reversed, with ten dollars costs and disbursements, and motion to compel purchaser to take the property denied, with ten dollars costs.