
    In the Matter of the Application of Joseph W. Howe et al., Ex’rs, App’lts., for leave to sue Benjamin I. Trask, Resp’t
    
      (Supreme Court, General Term, First Department,
    
    
      Filed November 30, 1891.)
    
    1. Moktgage—Leave to sue on bond.
    On the foreclosure of a mortgage the defendant’s answer of usury was stricken out and judgment entered adjudging him liable for deficiency. The premises were sold on foreclosure of prior mortgages and nothing was realized on this mortgage. On application for leave to sue on the bond, made within twenty years from its date, Held, that the judgment was a conclusive adjudication that defendant had no defense to the action and was indebted in the amount of the bond, and that leave to sue should have been granted, notwithstanding an alleged agreement that defendant, was not to be personally liable.
    (VanBkunt, P. J., dissents.)
    2. Same—Laches.
    As the statute of limitations had not run against the bond, the mere-delay in making the application did not constitute loches.
    Appeal from order denying motion for leave to bring an. action upon a bond executed by defendant
    
      Gerrit Smith, for app’lts; Charles Donohue, for resp’t.
   Ingraham, J.

The respondent admits having executed the bond upon which the appellant asks leave of the court to sue, and it appears that in an action to foreclose a mortgage given to secure the payment of the bond the respondent appeared and interposed an answer alleging the defense of usury, and that subsequently such answer was stricken out as sham and a judgment of foreclosure and sale entered whereupon the respondent was adjudged to pay any deficiency to plaintiff.

This judgment is a conclusive adjudication that defendant had no defense to the action and was indebted to plaintiff’s testator in the amount of the bond.

As the property covered by the mortgage was subsequently sold to satisfy a prior lien, nothing was realized in the foreclosure suit, and as the statute of limitations had not run against the bond the mere delay in making the. application is not a reason for denying the motion.

There is no rule that requires that this application should be made at any particular time, and by denying it on the ground of loches in making the motion the court in effect establishes a different time within which an action upon a bond must be brought than that established by law.

The allegation that some arrangement was made whereby the obligor and his co-obligor would be released from any personal obligation upon the bond is conclusively established to be with■out foundation by the judgment subsequently entered in the foreclosure action.

He was represented by his attorneys in that action and interposed an answer; he did not allege therein the making of the agreement now brought forward as a reason for denying this application, and the effect of the order appealed from is to reverse the adjudication of this court as to the liability of the defendant upon the mere statement of the respondent on this application, that in consequence of an agreement made before the entry of the judgment against him he was not to be personally responsible.

Upon the bond and judgment itself the petitioner is entitled to recover, and no reason is shown why they should not be alio,wed to commence the action.

The order appealed from should be reversed, with ten dollars costs and disbursements, and motion granted.

Daniels, J.

Whether a defense exists to the debts mentioned in the bonds can regularly be only determined on a trial, when the evidence will be directly produced before the court And to place the demands in the condition in which the trial can be had, the order permitting the bonds to be sued becomes necessary. To prevent the order the proof should be satisfactory that the bonds have been discharged, or satisfied. That degree of proof is in this instance wanting. And leave to sue the bonds should be given.

I therefore agree with the opinion of Mr. Justice Ingraham for a reversal of the order.

Van Brunt, P. J.

(dissenting.)—In June, 1878, one Trask and wife executed and delivered to one Clapp their two joint and several bonds for $2,500 each, secured by two second mortgages on two adjoining lots of land in New York city. In May, 1876, the mortgagors caused to be conveyed to the mortgagee certain property in Duane street, New York city, as claimed by the appellant, in part payment of said bonds, and credit was given therefor, on said bonds leaving a balance due. In November, 1877, two actions were begun by the mortgagee against Trask and. wife to foreclose the mortgages for the balance alleged to be due on the bonds, in each of which actions a defense of usury was interposed by the wife of Trask.

A motion was made to strike out such answers as sham and, upon the consent of the attorney for Mrs. Trask, an order was entered striking them out, and subsequently decrees of foreclosure were entered, on the 6th of September, 1877. A few days prior to the entry of the decrees in these actions (viz.: on September 3, 1877) judgments of foreclosure and sale were entered in actions brought upon the first mortgages and upon the' sale of the premises a deficiency resulted upon said last named mortgages. No sale was had under the decree of September 6, 1877.

The mortgagee died on September 17, 1881, leaving her husband sole executor and legatee under her will; and he died in 1884, leaving a last will and testament of which, the applicants, Joseph W. Howe and Clarence Moulton, are executors. Ho other payments having been made upon said bonds this application under § 1628 of the Code was made for leave to bring suit, thereon. This application being denied, from the order thereupon entered, this appeal is taken.

The learned court below seems to have denied this motion upon the ground of loches, nearly seventeen years having elapsed since the making of the bonds. But it is doubtful whether any lapse of time short of the statute of limitations, unless there were other considerations, would be an answer to the right to sue.

But there is one difficulty presented upon the face of these-papers which seems to justify the denial of the application

It áeems that the executor Moulton was acting as the attorney in fact of the mortgagee in connection with all these transactions; and it is alleged upon the part of the appellant Trask that the answers in the foreclosure suits were allowed to be stricken out under and in pursuance of an agreement between himself and Moulton that no personal judgment would be enforced either against himself or his wife.

And it is to be observed that Moulton verified the complaint in these foreclosure actions as the attorney of the plaintiff, who was absent from the city of Hew York. Moulton has made no affidavit or denial of these allegations. It seems to us therefore that the making of such an agreement is established, and it certainly would be inequitable to allow an action to be brought upon these bonds after the making of such an agreement by the representative and attorney of the plaintiff in those actions who had the sole charge and management of her affairs in this respect

The order should be affirmed, with ten dollars costs and disbursements.

Order reversed, with ten dollars costs and disbursements.  