Suydam v. Bartle

9 Paige Ch. 294 | New York Court of Chancery | 1841

The Chancellor.

The commencement of an action at law for the recovery of a debt secured by a mortgage, does not prevent the filing of a bill of foreclosure in this court unless a judgment has been obtained in that action. And the suggestion of the court in the case of Pattison v. Powers, (4 Paige’s Ref. 551,) that the action at law must be discontinued before a foreclosure suit could be commenced in this court, was incorrect. The effect of the 159th section of the title of the revised statutes relative to the court of chancery, (2 R. S. 191,) is only to deprive the plaintiff of the right to proceed, in the action at law, without the special permission of the court of chancery, where the foreclosure suit is instituted. (Williamson v. Champlin and others, 1 Clark’s Ch. Rep. 8; and S. C. 8 Paige’s Rep. 70.) The object of the legislature unquestionably was to relieve the mortgagor from the expense of a double litigation. And where it is evident that the complainant could have had a perfect remedy against all persons who were liable for the payment of the debt, by a decree over against them for the deficiency, if he had chosen to make them parties to his foreclosure suit, it might not be a proper exercise of discretion for the court of chancery to permit any further proceedings to be had in the action at law after the filing of the bill of foreclosure.

In the present case, however, the debt secured by the mortgage was but forty thousand dollars, and the amount due to the complainants upon their various acceptances considerably exceeds that sum, as stated in the petition. And it is doubtful whether there could have been a decree over against Westfall for his portion of the excess, even if he had been made a party defendant in this suit. (See 2 R. S. 191, § 160.) A defence has also been put in by West-fall to the action at law, which defence cannot be disposed of in the foreclosure suit in which he is not a party. This is”, therefore, a proper case to permit the complainants to proceed in the court of law, so far at least as shall be necessary to test the validity of the defence set up by the defendant Westfall in that suit.

An order must be entered, authorizing the complainants to proceed to trial and judgment in the action in the supreme court. But they are not to be permitted to take out execution on that judgment without the further order of this court, upon due notice of the application to West-fall, and to the other defendants in the action at law who have appeared to this bill of foreclosure. The costs of this application, and the complainants’ costs in the action at law, if they succeed in recovering a judgment against Westfall, must abide the further order of this court.