Hauselt v. Patterson

Full title: EDWARD HAUSELT et al., as Executors, etc., Respondents, v . ELIZABETH…

Court: Court of Appeals of the State of New York

Date published: Mar 3, 1891

26 N.E. 937 (N.Y. 1891)

26 N.E. 937

36 N.Y. St. Rptr. 354

Opinion

Argued January 26, 1891

Decided March 3, 1891

Preston Stevenson for appellants. Lewis Sanders for respondents.

BRADLEY, J.

Inasmuch as the descent on which this action is founded was cast upon the heirs of John H. McCunn prior to the repeal by L. 1880, ch. 245 of art. 2 of tit. 3, ch. 8, part 3 of the Revised Statutes, the inquiry is suggested by counsel whether the provisions of the latter were for the purposes of the remedy still operative. (Code, § 3352.) That, however, is a matter of no importance in this case, as those provisions of the Revised Statutes, so far as applicable to it, and the substituted provisions of the Code of Civil Procedure, are substantially the same. The right to maintain this action is dependent upon the construction and effect of the statute which provides that "whenever any real estate, subject to a mortgage executed by any ancestor or testator, shall descend to an heir or pass to a devisee, such heir or devisee shall satisfy and discharge such mortgage out of his own property, without resorting to the executor or administrator of his ancestor, unless there be an express direction in the will of such testator that such mortgage be otherwise paid." (1 R.S. 749, § 4.) Prior to this statute the personalty was the primary fund for the payment of mortgage debts as well as others of the ancestor. And at common law the heir was not chargeable with simple contract debts of such decedent; nor was he, unless mentioned in the bond of the ancestor, liable for debts by specialty of the latter, and when so named, his liability was to the extent only of the land which descended to him. This liability of the heir was in this state at first extended so as to embrace simple contract debts as well as specialties, whether the heir was mentioned in them or not; and for the purpose of charging him by means of action at law, a system of practice was provided by statute. (L. 1786, ch. 27, 1 R.L. 316.) That was superseded by the Revised Statutes which furnished provisions for suits by and against legatees and against next of kin and heirs and devisees and between heirs and devisees. (2 R.S. 450.) Under those provisions the liabilities of heirs and devisees are secondary and dependent upon the insufficiency of the personal estate of the decedent. The only exception to the primary charge of the debts upon the personalty was in the provisions of section 4 of the Revised Statutes before mentioned. And that did not in terms charge the heir with personal liability, nor was it contemplated by the statute that he should be so liable, irrespective of the property which descended to him, but rather that his liability to pay the mortgage out of his own property should be measured by and not exceed that which descended to him from his ancestor. The evident purpose of the revisers was, in the case provided for, to make the land the primary fund for the payment of the mortgage debt. (3 R.S. [2d ed.] 600.) And to give it practical effect that section and the other provisions of the statute on the subject, so far as applicable, are in pari materia. In that view the remedy is by action in equity having the nature of a proceeding in rem in such sense that when the land has not been aliened by the heir the execution of the judgment shall be had by levy upon the real estate descended to him. (2 R.S. 454, § 47; Code, § 1852; Butts v. Genung, 5 Paige, 259; Schermerhorn v. Barhydt, 9 id. 28; Wood v. Wood, 26 Barb. 356.) And to hold that the remedy is confined to the mortgaged premises, would not give effect to the apparent purpose of the statute as represented by its terms. Such limitation is not consistent with its provisions that the heir shall satisfy and discharge the mortgage out of his own property. Nor is it reasonable to suppose that the statute was intended to create a personal liability of the heir for the amount of the mortgage debt, but as we construe the statute its design was to make so far as practicable, the realty primarily chargeable with the payment of a debt of the decedent secured by mortgage on his land, and that when with the mortgaged premises the heir inherited other lands of the same ancestor he should take them altogether cum onere the mortgage debt, assuming that there was a personal liability of the decedent to pay it at the time of his decease. ( Roosevelt v. Carpenter, 28 Barb. 426.) This, however, was not intended to give such creditor a preference over other creditors of the decedent in the proceeds of the lands not covered by the mortgage when there is a deficiency of the personal estate to pay them. (2 R.S. 453, §§ 39, 40; Code, § 1856.) The preference of the mortgage creditor in the mortgaged premises is only available to him by foreclosure of his mortgage and not by action under the statute. And in such action the heir may allege in his answer and prove that there are other debts of the decedent unsatisfied belonging to the same or prior class of that on which the action is founded and properly chargeable against the land by reason of deficiency of personalty. ( Schermerhorn v. Barhydt, 9 Paige, 45.) The statute provides that the action be brought against all the heirs jointly (L. 1837, ch. 460, § 73; Code. § 1846); that the amount which the plaintiff is entitled to recover shall be apportioned among them in proportion to the value of the real estate descended to the heirs respectively; and that the costs recovered shall in like manner be apportioned among them. (2 R.S. 455, §§ 52, 53; Code, § 1847.) In the view thus taken the only substantial advantage of the mortgage creditor over other creditors in respect to land inherited by the heirs, other than that covered by his mortgage, is in the fact that his right of action is not dependent upon a deficiency of personal assets of the decedent. Nothing in that respect arises in this case, nor is there any question having relation to any other creditors.

It appears by the former adjudication, to that effect, that McCunn died intestate as to his real estate, and none of it seems to have been aliened by the heirs except about one undivided third part of it to Mr. Finn. There is no question about its sufficiency in value to pay the amount of the plaintiffs' claim represented by the judgment for deficiency in the foreclosure action in favor of their testator. The amount was not, nor were the costs recovered in this action apportioned among the defendants, nor did the judgment direct that its amount be levied of the land which descended to the heirs. These are statutory requirements. (2 R.S. 454, § 47; Code, § 1852.) And it is with a view to such judgment and its execution that it is made essential for the complaint to contain a description of the land. (Id. § 44; Id. § 1851.) It is only when the land has been aliened by the heirs that they are personally liable for an amount not exceeding its value. (Id. § 49; Id. § 1854.) The form of the judgment in this case is not very important, provided the execution upon it be levied upon the undivided real estate which descended to them for the amount only, with which the defendants are chargeable. But as one-sixth part of the estate which Mrs. Hettrick, one of the heirs of McCunn, inherited is not represented by any party defendant, that share is not subject to levy of execution upon the judgment. ( Schermerhorn v. Barhydt, supra.) The defendants Patterson and Bonner and the testatrix of Stevenson took by descent five-sixth, of the real estate, and they are chargeable with only that proportion of the plaintiffs' claim, and for that amount only the property of the defendants is subject to the levy of such execution. The views here given have relation to the liability of the heirs in the case mentioned, and have no reference to other remedies of the mortgage creditor or to any question relating to the right of executors or administrators to subrogation in case he collects the deficiency of his mortgage debt from the personalty, in the event there remains realty which descended to the heirs. While the statute does not deny to a mortgage creditor the right to seek payment of his debt from the personal estate of the decedent, the court of equity will not permit him to do so in the first instance to the prejudice of other creditors, but he will be required to resort to the land covered by the mortgage, which in view of the statute is the primary fund, for that purpose, and it is only for deficiency that he will be permitted in such case to seek payment from the personalty. ( Johnson v. Corbett, 11 Paige, 265.) The deficiency referred to is that remaining unpaid of the debt after the application in due course, of the proceeds of the premises upon which the mortgage to secure it was a lien. The other real estate which descended to the heirs subject to the remedy before mentioned by action is not dependent upon any lien, but upon the statutory liability of the heirs.

The contention that a recovery was barred by the Statute of Limitations is not sustained. Although the remedy is given by the statute, the cause of action is founded upon an obligation of the ancestor of the defendants to pay the sum secured by the mortgage represented by his bond. And the Statute of Limitations is no more available to the heirs than it would have been to McCunn if he had been living. The interest was paid by him upon it in 1872, and this action was commenced within twenty years thereafter. It is unnecessary to consider the question, in the view taken by counsel, on the assumption that the recovery was treated as in an action of law, since the action must be regarded as one equitable in character.

Nor is there any support for the alleged defense of a former adjudication founded upon the fact that an action had been brought by the plaintiffs' testator against McCunn's executors, these defendants and others to vacate the judgment determining the invalidity of the devise in the will, and for direction that the executors sell sufficient of the real estate to pay his debt and for such further relief as the court should see fit to grant, and that upon demurrer to it the complaint was dismissed. That action in its nature and purpose was distinct from the present one; and while the complaint there embraced many of the facts essentially in that of the present action, the issues tendered by the former as well as the relief in view, were quite unlike those represented by the complaint in this action.

A further question is raised as to the right of the plaintiffs to maintain the action against the defendant Stevenson, who is sued as surviving trustee of the will of Jane McDonald. She, at the time of her death, was a resident of the state of New Jersey. By her will, which was admitted to probate in that state, she appointed Stevenson and one Lozier executors and trustees, and devised to them all of her real estate in the state of New York in trust for certain specified purposes, and gave the survivor of them power to execute the trust. Letters testamentary were issued to them in the state of New Jersey, and the will was recorded in the office of the surrogate of the city and county of New York, but never was formally admitted to probate in this state. The defendant Stevenson is the surviving trustee, and as such has proceeded in the execution of the trust. It is unnecessary to consider the question in the aspect which it would be presented if this were an action at law to charge him with personal liability. His right to take the land with the power to control and dispose of it in execution of the trust was given by the will, and in respect to it the trustee is subject to the equitable jurisdiction of the courts of the state within which the land is situated, and such jurisdiction will be exercised by the court in behalf of creditors within the state.

The denial of the motion to dismiss the complaint as to the defendant Stevenson, therefore, was not error.

The liability of the heirs to pay the mortgage out of their property is proportionate with the real estate inherited by them respectively. And although no question arising out of the non-joinder of any representative of the estate which descended to Mrs. Hettrick, is raised by the answer or otherwise, the defendants are not liable to pay out of their property any amount greater than that with which they are charged by the statute. The omission to plead the defect of parties defendant was a waiver merely of that defense to the action, without increasing the extent of the liability of the defendants, or the amount which the plaintiffs would otherwise be entitled to recover against them respectively. It may be observed that the liability of the heirs to pay out of their property is not joint, nor is the estate which descended to any one of them subject to the proportion of the mortgage debt chargeable to any other of the heirs. The portion which descended to Jane McDonald was one-half, and to each of the defendants, Patterson and Bonner, one-sixth. And inasmuch as the recovery in the court below was for the full amount of the mortgage debt, and the defendants represented only five-sixths of the estate, which descended to the heirs, the judgment should be so modified as to charge the defendants with only five-sixths of the amount of such recovery, and direct the levy of it (duly apportioned) of the real estate which descended to Jane McDonald and the defendants, Patterson and Bonner, and, as so modified, affirmed without costs in this court to any party.

All concur, HAIGHT, J., in result, except FOLLETT, Ch. J., dissenting.

Judgment accordingly.