Blomgren v. Tinton 763 Corp.

Memorandum by the Court.

Judgment dismissing the complaint in an action to foreclose a mortgage on real property, modified on the facts and in the exercise of discretion to provide that the dismissal be conditioned upon the payment of all arrears of mortgage installments to the time of the judgment and the plaintiff’s costs and disbursements of the action, and otherwise affirmed, with costs to appellant. There was no default under the mortgage in the payment of installments of interest and principal. The refusal of plaintiff to accept the cheeks tendered was unwarranted, especially on the grounds urged for such refusal. Nor was there any actionable default in regard to the housing violations or failure to furnish a proper estoppel certificate. However, at the time of the commencement of the action, there was a violation of the terms of the mortgage due to the removal of personal property from the mortgaged premises and the replacement thereof under conditional sales agreements. The record is barren of any proof to show the particular property removed or the condition and value thereof. However, at the trial, defendant offered proof that the substituted personal property was free from incumbrances. Under the law a mortgagor will not be relieved from his default “in the absence of waiver by the mortgagee, or estoppel, or bad faith, fraud, oppressive or unconscionable conduct on the latter’s part”. (Ferlazzo v. Riley, 278 N. Y. 289, 292.) In Domus Realty Corp. v. 3440 Realty Co. (179 Misc. 749, affd. 266 App. Div. 725) *980Justice Shientag (p. 754) defined "oppressive" conduct as that which is unjustly burdensome, harsh or merciless ”. Since an action to foreclose a mortgage is addressed to a court of equity, which should determine the rights of the parties to the suit according to eijuity and good conscience, the rights are determined on the facts as they exist at the time of the decree and not at the inception of the suit. (19 Am. Jur., Equity, § 411, p. 283; Baker v. Salzenstein, 314 Ill. 226; Kosmerl v. Sevin, 295 Ill. App. 345.) The default with regard to the conditional bills of sale had beén cured at the time of trial. Under the circumstances, it would have been unduly burdensome and harsh to permit foreclosure as the facts presented themselves at the time of trial. It should be noted that conditional sales agreement^ covering refrigerators, stoves and sinks in the buildings were in existence even when plaintiff sold the property and obtained the purchase-money mortgage which is the subject of this suit. The replacement of other refrigerators, stoves and sinks and the filing of new conditional sales agreements were therefore not an unexpected development in the operation of the buildings. Perhaps the most significant evidence that plaintiff did not regard the substitution of other refrigerators, stoves and sinks for the old ones in the building as any impairment of the security of the mortgage, was the letter of October 31, 1960 written by plaintiff to defendant, claiming a default and accelerating the principal of the mortgage. No mention is made in that letter of any claim or default on the basis of any conditional sales agreements. However, while foreclostire was properly denied, defendant was not entirely without fault. At the commencement of the action there was a technical default. The trial court should therefore have required defendant, as a condition for extending equitable relief from the rigid enforcement of the mortgagee’s rights, to pay all arrears ¡in installments of principal and interest, and to pay the plaintiff’s costs and disbursements of the action. Just as a court of equity will require a party, who invokes its relief, to deal fairly with the defendant, there is a reciprocal requirement that in relieving the mortgagor from a default there be fair-dealing with the plaintiff, who, at least at the inception of the action, had some basis for invoking the jurisdiction of the court. Settle order on notice.