
    Edward Hauselt et al., Ex’rs, Resp’ts., v. Elizabeth Patterson et al., App’lts.
    
    
      (Court of Appeals, Second Division,
    
    
      Filed March 3, 1891.)
    
    1. Legatees, heirs, etc.—Liability upon mortgage—1 R. S., 749, § 4— Code Civ. Pro., § 1852.
    The design of 1R. S., 749, § 4, was not to create a personal liability, of the heir for the amount of the mortgage debt, but 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 when with the mortgaged, premises the heir inherits other lands of the same ancestor he .takes them cum onere the mortgage debt, if there was a personal liability of the decedent to pay at the time of his decease.
    2. Same.
    The liability of the heirs to pay the mortgage out of the property is proportionate with the real estate inherited by them respectively, and the judgment must be entered and execution issued accordingly.
    3. Same.
    The omission to plead the defect of parties defendant is 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 be entitled to-recover against them respectively.
    (Follett, Ch. J., dissents.)
    Appeal from judgment of the general term of the supreme court, in the first judicial department, entered upon an order made November 18, 1889, which affirmed a judgment in favor of the plaintiffs’ testator entered upon a decision of the court on trial at special term.
    The action was brought to recover the amount of the deficiency of a mortgage debt of John H. McCunn, who died in July, 1872, leaving a will, by which he devised all his real estate to trustees. He left surviving as his heirs at law capable of inheriting real estate his sister of half blood, Jane McCunn, afterwards McDonald, and three nieces, Elizabeth Patterson, Catharine Bonner and Martha Hettrick. In April, 1873, Mrs. Patterson brought an action for partition of the land of which McCunn died seized, founded upon the alleged invalidity of the devise of his real estate, and the action resulted in the determination that such devise was void, but no partition or sale was made pursuant to the judgment, which was entered November 1, 1881, nunc pro tunc as of January 25, 1878. McCunn died seized of several parcels of land, one of which was a certain lot bounded on Twenty-third street in the city of New York, upon which he, in December, 1854, made a mortgage to the City Eire Insurance Company to secure the payment one year thereafter of the sum of $5,000, according to the condition of a bond also made by him to such company. He paid no part of the principal sum, but did pay the interest up to February 1, 1872. In March, 1874, the insurance ■company, in an action brought for that purpose, recovered a judgment of foreclosure and sale of the mortgaged premises, and in October, 1876, the plaintiffs’ testator, becoming the owner by assignment to him of such judgment, afterwards caused the premises to be sold pursuant to it. The proceeds of the sale furnished nothing to apply upon the mortgage debt, and in November, 1881, judgment for deficiency was entered amounting to $7,606.54, and interest from January 1, 1879, against the executors of the will of the decedent. About the time of the commencement by Mrs. Patterson of her action before mentioned, the heirs of McGunn severally conveyed certain portions of their interests in the land to Christopher Finn, amounting together to 44-120 parts of such lands. And before the commencement .of this action Mrs. Hettriclc died intestate, leaving her surviving five children, and Jane McDonald died, leaving a will, by which she devised her real estate to two trustees, with the right of succession to the survivor of them. The defendant Stevenson is such surviving trustee.
    This action was commenced in 1885, against the present defendants and the children of Mrs. Hettriclc, deceased. The first trial resulted in a judgment of dismissal of the complaint, which judgment was by the general term reversed as to the appellants and affirmed as to the other defendants. 51 Hun, 321; 21N. Y. State Rep., 408. The last trial resulted in a judgment in favor of plaintiffs’ testator for the amount of that for deficiency in the foreclosure action.
    
      Prestan Stevenson, for app’lts; Lewis Sanders, for resp’ts.
    
      
       Modifying and affirming, 32 N. Y. State Rep., 1078.
    
   Bradley, J.

Inasmuch as the descent on which this action is founded was cast upon the heirs of John H. McGunn prior to the repeal by Laws 1880, chap. 245, of art. 2, of tit. 3, chap. 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 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. Laws 1786, chap. 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, heirs and devisees and between heirs and devisees. 2 R. S., 450. Under those provisions the liability of heirs and devisees was 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 § 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 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, as urged by the defendant’s counsel, 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 provision that the heir shall satisfy and discharge the mortgage out of his own property. ISTor is it reasonable to suppose that the statute was intended to create a personal liability of the heir for the amount of tlie 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 mortage 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, _§§ 89, 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. Laws 1837, chap. 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. Hothing 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. Pine. 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 this 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-sixths 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 exechtors 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 is subject to the remedy before mentioned by action 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 presented by counsel, on the assumption that the recovery was treated as in an action at 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, Oh. J., . dissenting.  