Farmers National Bank v. Lloyd , 30 N.J. Eq. 442 ( 1879 )

The Chancellor.

William S. Coleman applies to be made a defendant in this suit (which is for foreclosure and sale of mortgaged premises), with a view to protecting his interest under a judgment recovered by Daniel Zelley against him and Elijah T. Smith, who was the owner of the property at the time when the judgment was recovered, but subsequently sold and conveyed it to the complainants’ mortgagor who afterwards gave their mortgage. The judgment, therefore, is prior to that mortgage. The bill does not .allege that it has been paid or satisfied, nor does it attack it or call it in question in any way .or deny or question its priority over the complainants’ mortgage.

By the petition it is alleged that the petitioner was merely surety for Smith in the debt for which the judgment was recovered, and that he, in order to remove the encumbrance of it from Ms property, paid the amount of it to Zelley, the plaintiff therein, but that it was not satisfied aforesaid; and he claims to be entitled to subrogation to the rights which Zelley then had under the judgment, and to be entitled to have recourse to the lien of the judgment on the mortgaged premises for re-imbursements. Zelley was made a defendant in the suit, but did not appear. As before stated, he had received the amount of the judgment from the petitioner, and he had, therefore, no interest in the litigation.

The complainants, in filing their bill, chose to make all prior as well as all subsequent encumbrancers parties.

Zelley not having appeared or given any attention to the suit, there was no proof of his judgment in the cause. The final decree directs that the mortgaged premises be sold to pay, in the first place, the amount of a mortgage, given by Smith, on the premises, and which is prior to the encumbrance of the complainants’ mortgage, and to the judgment recovered by Zelley; and, in the next pilace, to pay the complainants’ mortgage, and then to p>ay other mortgages subsequent thereto.

The petitioner apprehends that his rights, under the Zelley judgment, will be affected by a sale of the mortgaged premises under the decree in this cause. If that were true, it would be sufficient reason for admitting him as a party. But it is not true. Zelley, as the holder of the judgment, stands unaffected by the decree, notwithstanding his default, and -so does the lien of the judgment on the mortgaged premises, and the rights or equities of the petitioner under it. A prior encumbrancer whose lien is not assailed in the bill of complaint, is not a necessary party to a suit for foreclosure, and if he be made a piarty, and does not choose to come in with his encumbrance, his rights are wholly unaffected by the proceedings. Hendry v. Quinan, 4 Hal. Ch. 534; Hudnit v. Nash, 1 C. E. Gr. 550; Wilkins v. Kirkbride, 12 C. E. Gr. 93; Frost v. Koon, 30 N. Y. 428; Jones on Mortgages § 1439.

The petition will be dismissed.