Black Diamond Bldg. & Loan Ass'n of Newark v. Redlinghouse

• Decision Date: 17 April 1933
• Citation: 165 A. 630
• Parties: BLACK DIAMOND BUILDING & LOAN ASS'N OF NEWARK v. REDLINGHOUSE et al.
• Court: New Jersey Court of Chancery

165 A. 630

BLACK DIAMOND BUILDING & LOAN ASS'N OF NEWARK

v. REDLINGHOUSE et al.

Court of Chancery of New Jersey.

April 17, 1933.

Syllabus by the Court.

The ancient and familiar doctrine in equity that the creditor shall have the benefit of any obligation or security given by the principal to the surety for the payment of the debt, and the remedy to enforce it in this court, are not impaired by section 48, 3 Compiled Statutes 1910, page 3421 (P. L. 1880, page 255, as amended P. L. 1881, page 184).

Suit by the Black Diamond Building & Loan Association of Newark, against Jacob Redlinghouse and others.

Decree for complainant.

Leslie s. Johnson, of Elizabeth, for complainant.

Harry Silverstein, of Newark, for defendants Jacob Redlinghouse and Herman C. Roemer.

STEIN, Vice Chancellor.

The complainant brings its bill against Jacob Redlinghouse, Herman C. Roemer, William G. Graef, and Frances Graef, his wife, for a deficiency arising out of a foreclosure and sale of the premises mentioned in the complaint. The Graefs failing to answer, decree pro confesso was entered against them.

The facts are stipulated as follows: Redlinghouse and Roemer March 4, 1929, executed a bond and mortgage for $17,000 to complainant. July 17, 1930, the defendant Redlinghouse conveyed his interest to William G. Graef and Frances Graef, his wife. The deed contained a provision whereby the Graefs assumed the payment of an equal undivided one-half of the mortgage indebtedness as part of the consideration mentioned in the deed. August 26, 1931, complainant foreclosed the mortgage in which all of the defendants herein were made parties, and decree followed for $15,852.07, plus interest and costs. At the sheriff's sale, complainant purchased the property for $100, leaving a deficiency on the bond of $16,368.05, with interest.

Prior to the commencement of this cause, demand for payment was made of the Graefs, Redlinghouse, and Roemer.

July 11, 1932, complainant filed notice of intention to institute suit for deficiency, and filed its bill July 9, 1932.

The defendants contend that the complainant should not prevail because it failed to comply with the statute providing for the filing of notice within the statutory period and the commencement of suit within such period, and that the notice was not filed nor suit instituted within six months of the sheriff's sale. Further, that, when complainant purchased the premises for a nominal consideration, it waived any right to institute suit for any deficiency.

The statutes referred to are section 48, 3 Comp. Stat, page 3421 (P. L. 1880, page 255, as amended, P. L. 1881, page 184), which section provides: "That in all cases where a bond and mortgage has or may hereafter be given for the same debt, all proceedings to collect said debt shall be, first, to foreclose the mortgage, and if at the sale of the mortgaged premises under said foreclosure proceedings the said premises should not sell for a sum sufficient to satisfy said debt, interest and costs, then and in such case it shall be lawful to proceed on the bond for the deficiency, and that all suits on said bond shall be commenced within six months...