Opinion
May 23, 1996
Appeal from the Supreme Court, New York County (Walter Tolub, J.).
We agree with the IAS Court that HEM Realty Equity Corp., as junior mortgagee, was not prejudiced by the failure of the plaintiff first mortgagee to serve the required papers and orders in the foreclosure proceeding on it. By allowing defendant-appellant to participate in the eventual foreclosure sale, any prejudice arising from the failure to effectuate such service was cured.
The doctrine of merger of the two estates — fee and first mortgagee — is not favored. On this record, it is clear that plaintiff did not merge its first mortgage in the deed which the record owner tendered pursuant to a stipulation in a bankruptcy proceeding ( see, 200 E. 64th St. Corp. v. Manley, 44 A.D.2d 11, 15-16, mod 37 N.Y.2d 744).
Concur — Murphy, P.J., Wallach, Ross, Nardelli and Williams, JJ.