Frost v. . Koon

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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The controversy in this case is in regard to the surplus moneys arising upon the foreclosure of a mortgage, and the conflicting claimants are Valentine Koon and Thomas Southard. The mortgage foreclosed is one for $1,250, executed by Robert Gilmore to Andrew Quackenbush, and subsequently assigned to the plaintiff Frost, upon premises situated on the Eighth avenue, in the city of New York. This mortgage was executed on the 20th day of May, 1854, and the premises were sold under it on the 6th day of May, 1859, and Koon became the purchaser.

Koon claimed the surplus moneys as having title to the premises at and previous to the time of the mortgage sale, under a sheriff's deed executed to him on the 14th day of September, 1858, as the purchaser at a sheriff's sale, made to him on the 13th day of June, 1857, upon a judgment by confession, given on the 29th day of December, 1854, by Robert Gilmore, the then owner of the premises, to John Van Wagner. The lien, therefore, under which Koon claims title to the surplus moneys dates back to the 29th day of December, 1854.

Southard claimed the surplus moneys as a mortgagee of the same premises under a mortgage from Robert Gilmore to him, executed on the 29th day of May, 1855; also, as a purchaser of the same premises on the 21st day of October, 1856, upon a mortgage foreclosure thereof, under a mortgage executed by Gilmore to George W. Platt on the 4th day of May, 1855. On this sale certain surplus moneys arose, a portion of which was paid to Southard as a subsequent mortgagee, but not enough to extinguish his claim as such. The lien, therefore, under which Southard and his executors claim title to the surplus moneys dates back to the 4th day of May, 1855 — the date of the Platt mortgage.

This, it will be seen, is some four months subsequent to the lien of the Van Wagner judgment under which Koon claims; and, if there were no other circumstances in the case, would show a manifest priority of title on the part of Koon to the fund in controversy. This apparent priority is attempted to be overthrown by Southard in several ways.

1. It is contended that the Van Wagner judgment is invalid as against subsequent encumbrances on the property, by reason of a radically defective statement in the confession of judgment.

2. It is contended that Van Wagner and Koon are estopped from setting up any title to the surplus moneys by having been made parties to the foreclosure of the Platt mortgage under an allegation in the complaint which charged them as having or claiming an interest in the premises subsequent to that of the mortgage, making no defence to such foreclosure, and allowing judgment to be taken against them by default, and the surplus moneys to be distributed to other claimants; which is claimed to be equivalent to an admission by them upon the record that they had no lien upon said premises older or superior to that of the Platt mortgage.

3. It is contended that Koon's assignor, Van Wagner, (and consequently Koon), is further estopped from making such claim by Van Wagner's standing by at the sale under the Platt mortgage, and suffering the property to be sold at public auction and Southard to become the purchaser under a public announcement by the sheriff that there were no other liens upon the premises than those there stated (among which that of the Van Wagner judgment was not included.)

4. It is contended that Van Wagner — and if he, then Koon also — is precluded from making any claim to the surplus moneys, by reason of releasing from the operation of his judgment certain other premises situated on the Ninth avenue, which were bound thereby; also belonging to Gilmore, and sold under certain mortgages thereon, the surplus moneys upon which were properly applicable to the payment of this judgment; and, if applied thereto, would have left this fund arising from the sale of the Eighth avenue premises wholly applicable to Southard's claim.

5. It is contended that the Van Wagner judgment was paid and satisfied, and therefore not entitled to participate in the distribution of the surplus moneys. This last proposition it is unnecessary to discuss, as the referee who heard this cause has decided the question of fact arising thereon against Southard, upon sufficient evidence to justify his conclusion.

1. The Van Wagner judgment was not void. In conformity with repeated decisions of this court, it must be held that the specifications in the statement on which the judgment was founded were sufficiently minute, unless it be that relating to cash lent, and in regard to that, the statement is in substance that Gilmore was indebted to Van Wagner for cash lent at different times between the 1st of May, 1854, and the 29th of December, 1854, to the amount, in the aggregate, of $175. I am inclined to think this also can be supported within the spirit of the decisions above referred to. If not, it can not have the effect of destroying the whole judgment; at most it can be invalidated only to the extent of $175.

2. It is possible that as against the mortgage of Platt on the Eighth avenue property, and in the suit for the foreclosure of that mortgage, and as to the surplus moneys thence arising, Van Wagner (and Koon as his assignee) would be estopped by the proceedings in that suit from asserting any title to the surplus moneys, as against Platt or Southard. But I do not think this fact, however admissible in evidence, would be an absoulute estoppel as between Koon and Southard in another action, by Frost, for the foreclosure of a distinct and prior mortgage to Quackenbush, preventing him from asserting a legal priority to the surplus moneys to which he was apparently entitled. The parties to the record were not the same, nor the subject of controversy identical. As an estoppel by record, therefore, it fails; and as an estoppel in pais it is not conclusive, because there was no act done or omitted by Van Wagner which was intended to operate upon or did operate upon Southard; nor was Southard thereby induced to make any purchase or forego any rights which he would otherwise have insisted on; nor would the latter be legally prejudiced by having the truth now enforced.

3. The same remarks apply to the estoppel supposed to arise from Van Wagner's silence at the sale of the Eighth avenue property under Platt's mortgage. Southard lost no rights upon that occasion by the silence of Van Wagner, which he would now be prevented from enforcing, if Van Wagner's judgment were permitted to be collected; and besides, Southard was fully apprised of Van Wagner's legal rights, and that they would be insisted on, before he completed his purchase.

I am, therefore, of opinion that Koon is not estopped by any proceedings or conduct of his assignor, Van Wagner, from asserting his claim to these surplus moneys.

4. The only serious question arises upon the legal effect of the release by Van Wagner of the Ninth avenue premises from the operation of his judgment. There is some reason for saying, with the referee, that if improperly released, it should not prejudice Koon beyond the proportional part of the judgment which those premises, in connection with Gilmore's other real estate ought to pay. But independent of that consideration, I am disposed to concur in the view taken of the case by the supreme court, to wit: that Southard has been guilty of so much laches in the assertion of his rights that he ought not to be permitted to enforce them against these surplus moneys. If he is entitled to these surplus moneys, it is upon the ground that the Van Wagner judgment is not a valid lien against the lands. If this were so, then those lands would not have been liable to be sold upon the execution issued on the Van Wagner judgment, and Southard, as a party interested in those lands, should have prevented such sale by injunction. But he neither interfered to prevent such sale, nor the consummation of the title by deed, nor the delivery of possession thereunder to the purchaser. It is well suggested in the court below that after such practical submission to the claim of Koon, Southard would not have been in a situation to maintain an action of ejectment, nor to seek equitable relief against him. Koon has been permitted, by the tacit acquiescence of Southard to pay his purchase money for the premises, and to consummate his title without objection or protest; and it is now too late to reinstate Koon in his original condition, and would be, I think, giving practical encouragement to excessive negligence and indirect injustice and fraud, to interfere in this stage of the proceedings to correct an imputed error or mistake growing out of a probable misapprehension of a rule of law.

I am in favor of affirming the order of the supreme court, with the costs of appeal.