Opinion
07-05-1913
SHINNEN v. KLEIN et al.
William M. Clevenger, of Atlantic City, for complainant. Bourgeois & Coulomb, of Atlantic City, for exceptant.
Foreclosure suit by Georgianna Shinnen against Morris Klein and others. On exceptions to the master's report. Exceptions overruled, decree denied, and reference and report to be ordered set aside.
William M. Clevenger, of Atlantic City, for complainant.
Bourgeois & Coulomb, of Atlantic City, for exceptant.
BACKES, V. C. This is a foreclosure bill. The allegations of the bill are that on November 16, 1910, William Klein and David Miller executed to the complainant a mortgage conveying a lot of land, fronting 110 feet on the easterly side of New Jersey avenue, Atlantic City, to secure the sum of $S,500 in five years, with interest payable semiannually. On January 16, 1912, the most northerly 60 feet were conveyed to Sarah Hollingshead, who made a mortgage thereon to secure the sum of $3,500, which mortgage is now held by the estate of Peter B. Risley. She subsequently conveyed the property to Morris Klein, the present owner, against whom one Solomon Goldman holds a Judgment. After the making of the Hollingshead deed, her grantors conveyed the remaining 50 feet, and by divers mesne conveyances the fee is now vested in Antonio S. Siracusa. The bill alleges a default in the payment of an installment of interest, and an election by the complainant that the full amount is due and payable, according to the terms of the mortgage. A decree pro confesso was taken against all of the defendants, and it was referred to a master to ascertain and report the amount due to the complainant and the Risley estate, and the priority of their respective mortgages, and whether the mortgaged lands should be sold as a whole, and in parts, in what order. The master reported that the lands of Siracusa be first sold to raise $3,500 and interest, to be applied in reduction of the complainant's debt, and that the lands of Morris Klein be sold to recover the balance, and also the moneys due on the Risley mortgage, and, if the moneys realized from the sale of the Klein property be insufficient to pay the balance of the complainant's debt, that the deficiency be made up from any surplus moneys realized from the sale of the Siracusa property. Siracusa excepts to that portion of the report which requires an appropriation of the proceeds of the sale of his lands, in excess of $3,500 and interest, to the payment of the complainant's mortgage in the event of a deficiency.
At the hearing before the master it appeared that the complainant's mortgage contained a special defeasance clause in these words: "The party of the second part (complainant) agrees to release so much of the above-recited (mortgaged) premises, as is covered by the Garrett deeds, the Mathis deed and the Mott deed, upon the payment of the sum of thirty-five hundred dollars." The part of the mortgaged premises referred to is the land of Siracusa, who, at the master's hearing, offered to pay the $3,500 and interest, in discharge of his lands, and now tenders himself ready to pay the money into court.
Upon the argument counsel for the complainant and exceptant requested a decision on the question raised by the exception, and to this end, and consented to waive all formality of pleading. Much as I would like to aid them, I find it impossible to accommodate a judicial expression upon the issues involved in the exception, to those presented by the bill. The master reported an equity not disclosed by the complainant's bill, which, if adopted, would effect a postponement of the rights and claims of some of the defendants as fixed by the bill. In this he overstepped the directions of the order of reference, and violated the provisions of rule 24 of this court, which forbids the making of a report or decree postponing the rights or claims of a defendant, against whom a decree pro confesso has been taken, "unless the priority of the rights or claims of such other defendant and the facts upon which it depends are distinctly set forth in the bill." The bill of complaint is silent as to the special defeasance clause, relating to the exceptant's land, and of which he now desires to avail himself. None of the defendants answered. Presumably they accepted the allegations of the bill as correctly setting forth the equities of the parties, and assumed—as they had the right to—that they would be reported in the order therein stated. According to these allegations it was the right of Morris Klein, the owner of the lands lastly conveyed, the Risley estate as mortgagee, and Goldman as a judgment creditor, to have it reported that the mortgaged lands be sold in parcels in the inverse order of alienation, and that the exceptant's premises be sold first, without limitation as to the appropriation of the proceeds. If there is a restrictionas to the amount for which the exceptant's land may be called upon to respond in satisfaction of the mortgage debt, and I am inclined to think there is, it should have been pleaded in the bill, or set up by way of crossbill.
The defendants alluded to are entitled to their day in court to controvert the claim now asserted by the exceptant. A similar equity was set up by cross-bill in American Net & Twine Co. v. Githens, 57 N. J. Eq. 539, 41 Atl. 405, and permitted and directed to be done in Hall v. Home Building Co., 56 N. J. Eq. 304, 38 Atl. 447.
The exception is overruled. No costs. A decree on the report will be denied. Upon motion an order will be made setting aside the reference and the report. Leave will be granted to file a cross-bill. If, however, Morris Klein, the Risley Estate, and Goldman will submit themselves to a decree on the merits of the exception, the exception will be retained and disposed of.
If the complainant had pursued the practice laid down in rules 21 and 22, which provide that upon default the complainant may proceed ex parte without reference, or, if upon reference, then without notice to the defendants, and had observed the requirement of rule 24, the present difficulty would not have been encountered.