Fliess v. Buckley

Barrett, J.: We think this case comes within the spirit of section 982 of the ’Code of Civil Procedure. It has been repeatedly held that the surplus is to be regarded as realty. It goes to the heirs or devisees, not to the administrator. (Dunning v. Ocean National Bank, 61 N. Y., 497.) There is no difference in principle between such surplus and a parcel of the realty remaining unsold, after the sale of enough to satisfy the' judgment of foreclosure. If the surplus be thus regarded as between the heirs and personal representatives of the deceased, it is but reasonable and productive of harmony to take the same view of the expression used in section 982. If, in theory, the surplus be treated as real estate, why not in practice ? If with regard to the’ rightj why not- with regard to the remedy? [555] Then, to establish a' right therein, or to determine a lien thereon, necessarily involves the establishment of such right or determina tion of such lien 'upon the property covered l>y the mortgage. The policy of the law, too, favors the retention within the local jurisdiction of the supplemental litigation with regard to the surplus. Under the rule, it is usually administered and distributed by the court in which the foreclosure proceeded. If the character of the claim thereto be such as to require an original suit, it would seem to be eminently proper that such suit should be instituted in the same court, or at least within the same local jurisdiction. This was doubtless the intention, in part, with which the very broad and comprehensive language of section 982 of the Code of Civil Procedure was substituted for section 123 of the Code of Procedure. ~We áre, therefore, of opinion that the action- should have been brought in Bangs county, and that the order appealed from should be reversed, with $10 costs, and disbursements of the appeal, and the motion to change the place of trial to the proper county be granted. Present — Davis, P. J., Beadt and Babeett, JJ. Order reversed, with $10 costs, and disbursements, and motion to change the place of trial to the proper county granted. Babeett, J.: The injunction should not have been granted. The plaintiffs did not make out a prima facie case. So far as Mr. Fliess individually is concerned, there was no necessity for an original suit. His remedy under the order of reference was ample and complete. Thé. referee was regularly appointed, and Mr. Fliess had no right to remove the proceedings from his jurisdiction. It may be that the representatives of Kobert A. Fliess would, in a proper case, have' been entitled to file an original bill. The question, whether their claims to the surplus moneys could have been duly litigated before the referee, may admit of doubt; but it is unnecessary to pass upon that question definitely, for the reason that the complaint, so far as they are concerned, -is wholly insufficient. A fatal defect is the [556] failure to allege inability to collect the judgments out of the personal estate. (Butts v. Genung, 5 Paige, 254; Selover v. Coe, 63 N. Y., 438.) The absence or insufficiency of personalty is not even suggested. Nor is it claimed that these creditors have exhausted their remedy against the personal representatives of the deceased. The plaintiffs should at least have made out a case sufficient to have entitled them to a sale of the realty. That is what was contemplated by the act of 1867, chapter 658 (as amended, Laws of 1870, chapter 170, and Laws of 1871, chapter 834). The surplus is undoubtedly liable for John Buckley’s debts. So far, we agree with the plaintiffs. But how liable ? Plainly, as real estate is liable. As was said by Dwight, C., in Dunning v. Ocean National Bank (61 N. Y., 506): — “ The terms of the statute show that the surplus is regarded as real estate. The most careful precautions are taken to prevent • the heirs from being deprived of it, except in the same manner and to the same extent that would be permitted in case the land had remained unsold. ” In every provision of the Revised Statutes upon this general subject it will be found that extreme care has been taken to require the complete exhaustion of the personalty before permitting a resort to the realty. We feel constrained, therefore, to direct a reversal of the order appealed from, with $10 costs, and disbursements of the appeal, and a dissolution of the injunction, without prejudice to another application for such injunction, upon an amended complaint and further papers, if plaintiff be so advised. Present — Davis, P. J., Brady and Barrett, JJ. Order reversed, with $10 costs, and disbursements, and injunction dissolved without prejudice to another application for an injunction on further papers.