Lee v. Parker

By the Court,

Marvin, J.

In Eagle Fire Company v. Lent, (6 Paige, 635,) Chancellor Walworth said: “So far as mere legal rights are concerned, upon a bill of foreclosure the only proper parties to the suit are the mortgagor and the mortgagee, and those who have acquired rights or interests under them subsequent to the mortgage. And the mortgagee has no right to make one who claims adversely to the title of the mortgagor, and prior to the mortgage, a party defendant, for the purpose of trying the validity of his adverse claim of title in this court.”

This principle was applied by the court of appeals in Corning v. Smith, (2 Seld. 82.) In these cases the question arose in the action to foreclose a mortgage. In the last of these cases it is held that the court should look into the question far enough to ascertain whether it comes within the rule, and if so, it should dismiss the complaint as to such defendant.

In Lewis v. Smith, (5 Seld. 502,) it was held that a claim of dower was not barred by a foreclosure of a mortgage executed by the husband during coverture, though the widow was made a party to the foreclosure suit, and the bill was taken as confessed against her. The complaint contained the averment that she claimed some interest in the premises as subsequent purchaser or incumbrancer, or otherwise.

After reading these cases I am satisfied the court erred in holding that the judgment and sale in the mortgage foreclosure was conclusive upon the defendant as to the title of Brown. Such judgment had no effect upon any claim of title by the defendant arising prior to the mortgage. And it appears from the case just cited that had the defendant suffered the complaint to be taken as confessed, the judgment would not have affected any legal claim he had, arising anterior to the lien of the mortgage. It is intimated in Lewis v. Smith that if the party appear and litigate the question of his claim and is defeated upon it, the judgment in the foreclosure action will conclude him, in a collateral action. I have no doubt this would be so.

In the present case the defendant Parker appeared in the foreclosure action and answered, setting up, as one of his defenses, that Brown the mortgagor was not the owner, or seised of th.e premises, at the time he executed the mortgage, but that he, Parker, was owner and in possession of the premises, and so continued ever since.

[Erie General Term, May 2, 1865.

This claim of the defendant was not tried before the referee. The parties stipulated that a judgment might be taken, containing a provision that it was without prejudice to any adverse title in the defendant Parker, to the mortgaged premises, superior to the mortgage. It was intended by this stipulation to save to Parker any right he had to the premises, existing prior to the mortgage lien. He was in possession when Brown gave the mortgage, claiming title to the premises, and it was intended by this stipulation that the judgment should have no effect upon any rights he had at the time the mortgage was given; and this intention was effected by the clause in the judgment, that it was without prejudice to any adverse title in Parker, &c. &c.

It may also be well to refer to the statute making grants of land held under a title adverse to that of the grantor void, but allowing a mortgage to be executed which “shall bind the land from the time the possession thereof shall be recovered, by the mortgagor, or his representatives.” (1 R. S. 739.) The remedy here indicated is an action to recover the possession of the premises held adversely at the time the mortgage was executed.

Issues joined in actions for the recovery of the possession of real estate must be tried by a jury. (Code, § 253.)

In this case the defendant Parker should be allowed to make any defense which existed prior to the execution of the mortgage.

There must be a new trial; costs to abide the event.

Grover, Daniels and Marvin, Justices.]