Gardner v. Lansing ( 1882 )

Learned, P. J.:

This < action is brought to foreclose a mortgage made by the deceased intestate, John G. Lansing. Sanford Neilson and others, alleging that they are simple contract creditors of the deceased, that the administratrix and administrator claim that the estate is insolvent; that the administratrix and administrator have applied to the surrogate for a sale of the real estate, and that the real estate is the only source from which the creditors can be paid, now ask to be made parties defendant to this foreclosure, in order that they may set up as a defense, certain facts; viz.: That the mortgage was given without consideration, and that it has been in part paid by rents received by the widow since the death of the deceased. Erom an order granting this relief the plaintiff appeals.

It is not necessary or proper that any person should be made defendants in an action of foreclosure, other than those who have either a title to the land or a lien thereon. They alone have a right to redeem the land from the mortgage; and they alone need to be cut off and barred by the foreclosure. If the mortgagor were living, his simple contract creditors would have no lien on the land; and they would be neither necessary nor proper parties to the foreclosure. Nor have such simple contract creditors any lien on the land, after the death of the mortgagor. (Matthews v. Matthews, 1 Edw. Ch., 565 ; Fonda v. Chapman, 30 Sup. C. N. Y. [23 Hun], 119.) The land passes at once to the heirs or devisees of the deceased. No rights can be acquired but by proceedings against them. The right to enforce debts of the deceased against this land now belonging to the heirs or devisees is not a lien. . If it were, then, on the foreclosure of a mortgage, made by the deceased, these simple contract creditors would be necessary parties.

If the doctrine of the petitioners were correct, it would go much further. Any suit to recover money against an administrator affects, in one way, other creditors. Because it may establish a claim against the fund. On the same reasoning therefore, other creditors of the estate might petition to be made parties defendant to such an action, alleging collusion between the plaintiff and the administrator; and would be entitled thus to come in and defend.

The question here presented is analogous to the question whether a simple contract creditor of a deceased person can bring an action to set aside, as fraudulent, a conveyance made by such person. Whatever doubt may have existed on. this point formerly, it has been settled by Estes v. Wilcox (67 N. Y., 264); Allyn v. Thurston (53 N. Y., 622); Ocean National Bank v. Olcott (46 N. Y., 12). The opinion in Estes v. Wilcox explains the decision in Allyn v. Thurston, which is not reported in full; and shows that the action was brought after the death of the debtor, and that it was admitted that he died insolvent. Now the death and insolvency of the debtor are the facts upon which the court relied in Loomis v. Tifft (16 Barb., 541), and in Spicer v. Ayers (2 T. & C., 624), as the ground of giving relief to a simple contract creditor. Yet the Court of Appeals in Estes v. Wilcox decided that, notwithstanding such death and insolvency, the creditor must have a judgment and execution before he could maintain the action in equity. The same doctrine is recognized in Geery v. Geery (63 N. Y., 252), and is followed in Evans v. Hill (25 Sup. C. N. Y. [18 Hun], 464) and in Adsit v. Sanford (30 Sup. C. N. Y. [23 Hun], 45), affirmed under the title of Adsit v. Butler (87 N. Y., 585). In this last case the demurrer admitted the death and insolvency of the debtor; but it was held that judgment and execution were necessary, before the action could be maintained. The doctrine is again asserted in Southard v. Benner (72 N. Y., 424), by the same judge who had, some twenty-five years before, held the contrary in Loomis v. Tifft (16 Barb., 541.)

It must then be considered as settled that these petitioners, being only simple contract creditors could not maintain an action to set aside this mortgage'’ as fraudulent. They have therefore no right to defend against if.

But it is urged that unless this motion be granted the petitioners are remediless. By no means. The administrator and administratrix may disaffirm and treat as void this mortgage. (Laws 1858, chap. 314; Southard v. Benner, ut supra.) A neglect to discharge their duty in this respect may render them liable to account for the loss and liable to removal.

And here we may remark as to the allegation that the widow and administratrix has received, since the death of the deceased certain rents of the lands which belonged to the deceased, that these creditors have no right to those rents, and no right to claim that such rents should be applied upon the mortgage.

A single point should perhaps be- mentioned. If an administrator, on proper request, should refuse to disaffirm and to bring an action to set aside a mortgage, alleged to be fraudulent, probably creditors, in some cases, might bring such an action, alleging the refusal and making the administrator a party; as was done in Bate v. Graham (11 N. Y., 237). But notice, that in that case the creditor had recovered a judgment. Whether he could have maintained the action as a simple contract creditor we need not decide.

The order should be reversed, with ten dollars costs and printing disbursements, and new trial denied, with ten dollars costs against petitioners.

Present — Learned, P. J., and Westbrook, J.

Order reversed with ten dollars costs and printing disbursements, and motion denied, with ten dollars costs.