Opinion
07-28-1937
ROSENWASSER v. WEISS et al.
Frank H. Eggers, of Jersey City, for complainant. Joseph L. Freiman, of Union City, for defendants.
Suit by Benjamin Rosenwasser against Bertha Weiss and another to compel Bertha Weiss, mortgagee, to take title to premises subject to mortgage which had been foreclosed, and to give complainant, who was an obligor on the bond accompanying the mortgage, credit for the fair value of the premises. Motion to strike bill granted.
Affirmed in 199 A. 65.
Frank H. Eggers, of Jersey City, for complainant. Joseph L. Freiman, of Union City, for defendants.
EGAN, Vice Chancellor.
The defendant Bertha Weiss, in February, 1934, instituted foreclosure proceedings against the Keystone Realty Company, Inc., Benjamin Rosenwasser, this complainant, and Fannie Guttenberg, executrix of the last will and testament of Solly Guttenberg, deceased. A final decree was entered upon which an execution was issued to the sheriff of Bergen county, who sold the premises under foreclosure on July 24, 1935, to Louis Jacobson for the sum of $100. Confirmation of the sale was objected to by the defendants in that suit and, upon their application for a hearing on the question of fair value, the same was referred to a master to report thereon. Subsequently, the order referring the matter to the master was amended to include the question of the financial ability of the defendants to refinance the property in question. Shortly thereafter, the defendant Rosenwasser (this complainant) was permitted "to withdraw his objection to confirmation of sale without prejudice to his rights, and reserving all his rights therein, and that he be permitted to institute an independent bill of complaint to determine his said rights." Rosenwasser then filed the bill herein in which he prays, among other things: (1) That it be decreed that his obligation on the bond is that of surety and not that of principal; (2) that it be decreed that the defendant Louis Jacobson, who is the holder of the bid at the sheriff's sale, is in fact holder of the same for the defendant Bertha Weiss; (3) that the defendant Bertha Weiss be enjoined from instituting any action at law on the bond until the complainant is first credited with the sum of $14,000, being the fair and reasonable value of the property as found and reported by the master; (4) that the complainant be exonerated from liability, and that the mortgaged premises pay the debt; (5) that the bond be surrendered for cancellation.
The complainant is an obligor on the bond accompanying the mortgage, and he claims to be a surety. He is not a party to the mortgage.
The defendant moved to strike the bill; the motion was held over to the final hearing.
In the meantime, the proceedings in the foreclosure suit instituted by Bertha Weiss continued. On February 7, 1936, an order was entered setting aside the sale made on July 24, 1935. That order provided, among other things, that the defendants guarantee upon the resale, the property bring at least the sum of $12,500 as a "reserved or upset price." That provision in the order was inserted at the request of counsel for the defendants in that suit (who is the solicitor of the complainant herein). On May 6, 1936, the property was offered for resale by the sheriff of Bergen county; there were no bidders atthe sale; then the sheriff returned the execution "unsatisfied." Thereupon, an order to show cause why a money decree for the full amount should not be entered against the defendants in the foreclosure suit was issued. An argument thereon was had by counsel. The court reserved decision.
This matter, came on to final hearing when the motion to strike the bill was renewed.
Complainant contends that the motion to strike the bill should not prevail, claiming that as a surety on the bond he is entitled to exoneration. Klorman v. Westcliff Co., 170 A. 251, 12 N.J.Misc. 266; Hunt v. Gorenberg, 155 A. 881, 9 N.J. Misc. 463.
Counsel for the defendant argues that the complainant is not a surety, but a principal obligor on the bond; that in no part of the instrument does it appear that he is mentioned as a surety. He maintains that, even assuming that the complainant is a surety, as he claims to be, the procedure to establish such fact should not have been through the medium of a bill filed in an independent suit, but it should have been by a petition presented in the original foreclosure proceedings. In support of his position, he directs attention to the cases of Fruzynski v. Jablonski, 117 N.J.Eq. 117. 175 A. 112, Broadman v. Colonial Building-Loan Association, 118 N.J.Eq. 275, 178 A. 775, and Meranus v. Lawyers' & Homemakers' Building & Loan Association, 118 N.J.Eq. 586, 180 A. 665, all of which are authority for the proposition that in somewhat similar matters arising from foreclosure suits, application for relief should be by petition in the original foreclosure suit and not by bill in a plenary suit.
Defendant's counsel further says that the bill should be stricken for the additional reason that complainant's financial inability to protect himself has not in these proceedings been alleged. In support of his point, he submits the following cases: Young v. Weber, 117 N.J.Eq. 242, 175 A. 273; Maher v. Usbe Building & Loan Association, 116 N.J.Eq. 475, 174 A. 159; Bluestone Building & Loan Association v. Glasser, 117 N.J.Eq. 392, 176 A. 314; Better Plan Building & Loan Association v. Holden, 114 N.J.Eq. 537, 169 A. 289.
Complainant, to sustain his right to proceed by bill herein, presents an unreported decision by Vice Chancellor Fallon in the case of William F. Moore, complainant, and Lincoln Building & Loan Association of Jersey City, defendant, docket No. 82/ 243. In that suit, Moore joined in executing a bond accompanying a mortgage being foreclosed. A decree of foreclosure was entered and the premises were sold by the sheriff. A deficiency suit was instituted at law against Moore. Moore filed a bill in this court in which he alleged that, while he contracted as a principal, he, in fact, was not a principal but merely a surety on the bond; that the indebtedness was not his; and that the moneys claimed had been paid to, or for the benefit, of the defendant, the realty corporation, a party defendant in the suit. Vice Chancellor Fallon held that Moore was a surety and that the indebtedness was the corporation's. However, the Moore case was not appealed. Since the decision in that case was rendered, the Court of Errors and Appeals of this state has spoken in the cases of Fruzynski v. Jablonski, supra, Broadman v. Colonial Building-Loan Association, supra, etc. The determinations in the cases last cited point the way—which is by petition in the original cause. This court must follow those directions. Consequently, the motion to strike the bill is granted.