Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 20, no. 494: September 1, 1877

Text version:

Real Estate Record AND BUILDERS' GUIDE. Vol. XX. NEW YOEK, SATUEDAT, SEPTEMBEE 1, 1877. No. 494. Published Weekly by TERMS. OJTE YEAR, in advance....$10.00. fOommunicafcions should be addressed to C. 'W. SWEET, Nos. 345 AND 347 Broadway. LEGAL DECISIONS. In a recent bankruptcy case the Judge uses these words : "As the law now stands we hold that in the absence of consent by creditors in voluntary cases, no matter when commenced, nor v/hen debts were contracted, the assets must pay thirty per cent., not Ufty per cent., or there can be no discharge; whereas in compulsory case or involuntary bankrnptcy, the bankrupt, if otherwise entitled thereto is entitled to a dis¬ charge irrespective pf the assent of creditors or the amount of his assets. It has also been decided that where a creditor obtains an attachment upon property of the banki-upt, and such attachment has been dissolved by reason of the adjudication in bankruptcy of the debtors a judgment creditor who has made a levy subject to such attachment is not entitled to pi-iorifty as against the assignee. But where a creditor has obtained a valid Uen by attachment, and has obtained judgment and le-vied under an execution, his Uen under the levy is to be considered as prior in time to that of other creditors who have levied attachments in the meantime, and is not affected by the dissolu¬ tion of the attachments. By the foUowing decision it appears that where one purchases goods under a contract to pay cash on delivery, and upon deUvery ships them beyond the control of the vendor, such conduct raay be regarded as a fraud in the creation of the debt and his discharge in bankruptcy wUl not re¬ lease him from the payment of the claim. It is also decided that where a new promise to pay is made after procuring a certiUcate of discharge, such discharge wiU not preclude a recovery of the debt. The plaintiff sold goods to the bankrupt before his known insolvency for cash. Upon obtaining possession thereof the goods were iminediately shipped beyond the control of the seUer. The check given in payment was not paid. In an ac¬ tion subsequently brought to recover the amount due, the discharge in banla-uptcy obtained by the purchaser was pleaded. The Court held that the debt was created by fraud, and consequently not released. It further appeared that the bankrupt after he obtained a discharge made a new promise to paj the debt. In such a case a discharge wiU not preclude a recovery. A judgment having been obtained against one Schoonmaker, in his lifetime, who had devised his lands to his sons, an application was made to re¬ strain them from coihmitting waste upon such lands by feUing and carrying away certain timber thereon, by means of which the estate would suffer injury and the only security thereby impaired Upon which the creditor must rely for the pay¬ ment of his debt. In the opinion of the Judge up¬ holding the injunction he holds that waste, to the injury of a judgment creditor, who has a lien on land, is an abuse of right, and -wUl be prevented because against equity and good conscience. A lien obtained by judgment stands upon the same footing as regards real estate, as a Uen obtained by mortgage, when the creditor makes a case showing that he m'ust look to such property alone for satisfaction of his claim. PracticaUy, a judg¬ ment creditor is just Uke one to whom that piece of real property has been speciflcaUy mortgaged for a specific period. It is monstrous injustice to permit the omy security a judgment creditor may have from which to obtain satisfaction of his claim to be destroyed and lost to him by the act of a party without right, or whose rights, if he have any, are entirely subordinate to fche judg¬ ment lien. In the judgment of the Court the judgment creditor is entitled to have his lien pro¬ tected, and his sole protection is in the restraining power by an injunction order. An iinportant decision, recently made by Judge G-. Gr. Reynolds, of the City Court of Brooklyn, Ulustrates under what circumstances a mortgagor will be reUeved from a judgment for deficiency on the sale of premises under foreclosure. One McCrum, after making a mortgage on certain premises owned by him, conveyed the same to a Mrs. Weinberg, who assumed the payment of the mortgage. When the mortgage became due, Mc¬ Crum, having then become into the position of surety, requested the owner and holder of the mortgage to proceed immediately to foi-eclose and coUect the debt, on the ground that the prem¬ ises, wMch were then sufficient to satisfy the mortgage, might depreciate so as to become an inadequate security. The plaintiff neglected for a year to commence his suit, and the proof now shows that although the premises were of suiH- cient value to pay the mortgaged debt and cost of foreclosure at the time the request was made, they have since so far depreciated as tb make it altogether probable that there wUl be a deficiency after applying the proceeds of the sale. The ques¬ tion is whether the defendant McCrum should be made Uable for such deficiency. The rule seems to be, that if the creditor omits to do an act, on the requirement of the surety, which equity and his duty to the sm-ety enjoins on him to do, and the surety is injured by the omission, the latter ought not to be held. That duty enjoins upon the creditor to enforce payment from the party primarUy Uable, and if, being re¬ quested by the surety to coUect the debt when it is collectible from such parties by measures of active diUgence, the creditor refuses or neglects to do it until it becomes uncoUectible from the principal, such conduct ought to be a defense in eq-dity to any suit brought against the surety to charge him with the payment of the debt. But failure on the part of the creditor to comply with the request of the surety to enforce paffment of the debt wiU not exonerate the surety unless it re¬ sult in actual injury to him, and then only to the extent of such injury. The solvency of the debtor or the sufficiency of the fund at the time when the request to collect was made, and subse¬ quent insolvency or insufficiency, are essential parts of the defense of the suretyi^ and must be aUeged and proven by him (Thomas on Mortgages, 70, 71; Remsen v. Beekman, 25 N. Y., 5.52). Plaintiff claims, however, thafc defendant Mc¬ Crum has not brought himself within the rule releasing sureties, he not having shown that the defendant Weinberg is insolvent; and that as it does not appear but that plaintiff may be able to coUect any deficiency out of her, defendant Mc¬ Crum is not shown to have sustained any injury from the plaintiff's delay. The answer to this is, that if it turns out that the deficiency can be collected from Weinberg, it will be the duty of the plaintiff to so coUect it, and iu that case there is no occasion for a decree holding the defendant McCi-um; but if it cannot be coUected from Weinberg, and the defendant McCrum should be made Uable, he wotdd be thereby damnified through the plaintiff's neglect to the precise extent of the payment which he would thus be compelled to make. The mortgage having been coUectible out of the property when the surety requested its coUection, he ought not now to be caUeduponto make up for the subse¬ quent depreciation of the property, and thei-e- fore there should not be any such direction against him in the judgment. Such du-ection, if effectual, would compel him to meet a deficiency which would not have existed if the creditor, the plaintiff, had compUed -with his reasonable request. , There must be judgmenffor a sale of the prem¬ ises, and making the defendant Weinberg liable for any deficiency. By an agreement made before marriage one Pierce agreed to pay to his intended wife if she survived him $500 for her sole and separate use, in consideration of which she agreed that the money so assigned to her should be in fuU satis¬ faction of her dower in his real estate, and that she would not claim any share in his personal es¬ tate. Pierce died without making a wUl; never paid his wife the 6500 and made no settlement of the same upon her. Held—^That when a man in contemplation of marriage, agrees to make a set¬ tlement upon his wife in consideration of which she agrees to reUnquish her rights in his property at his decease, and he fails to make the settle¬ ment, the -widow is not barred of any right which she might have asserted, if no such agreement had been executed, and that she is entitled to such dower and her distributive share of his per¬ sonal estate. It appearing in the same case that the widow claimed for board, clothing, medical attendance and other necessaries furnished for herself during eight years, when she was living sepai-ate from her husband, caused by his iU- treatment, it was further held that she was not entitled to such claim. No case shows that a married woman, U-ving separate from her hus¬ band, may sue him or his estate for her board and necessaries. If she has been Ul-treated she has other remedies. She may obtain a Umited separation by an action in the com-ts and an al¬ lowance for her support. She may pui-chase necessaries on her hurband's credit, if he has turned her out of doors, oi- the like. If she takes neither of these courses, but prefers to support herself while living separate from him, she has no claim against him for the money thus expend¬ ed. It is in that case reasonable to infer that she acquiesced in the separation, and that it was not altogether owing to his fault. It would be a dan¬ gerous principle to hold a man Uable to his -wife for money expended on her support, when she had been Uving separate from him for eight years, without taking legal proceedings for a separation, and without making purchases on his credit. LIABILITY OF SELLER OF USURIOUS NOTE. Littauer sold to Goldman a promissory note which was void for usury in its inception, and which, in an action brought by Goldman against the maker to recover the amount due thereon, had been adjudged void, and Goldman thi-own in costs. The note was sold to Goldman without any express representation or guarantee; and Littauer is not aUeged to have been connected with the usm-ious origin of the note. The Judge holds, that an action can be mauitataed for the recovery of the money paid by Goldman to Lit¬ tauer for the note, with interest and the costs of the suits, Littauer having been notified of the pendency of the suit against the maker and of the defence of usm-y interposed. Although there was no express representation made that the note was a legal, vaUd instrument, there is an impUed warranty that the note is such. An article of apparent value was sold to Goldman which has turned out, by the test of judicial proceedings of which Littauer had notice, to have been at the time of the sale of no value whatever. He, therefore, received nothing from the defendant for his money; and, upon such, total faUure of consideration the law impUes a promise to return the money. DISTRIBUTION OF SURPLUS MOIfEyS. Upon an appUcation for the distribution of tha surplus moneys arising upon the sale under a fore¬ closure of mortgage, an order having been made directing the payment of the siun of $150 as an aUowance out of such surplus to the holder of a second mortgage, the Coui-t, at General Term, held, that the allowance -was Ulegal, and that only the fees of referee and $10 costs of motion to confirm the report and $10 costs of order appointing referee could be allowed.