Colonial Building-Loan Ass'n v. Mongiello Bros., Inc.

• Decision Date: 27 March 1936
• Citation: 184 A. 635
• Parties: COLONIAL BUILDING-LOAN ASS'N v. MONGIELLO BROS., Inc., et al.
• Court: New Jersey Court of Chancery

184 A. 635

COLONIAL BUILDING-LOAN ASS'N

v. MONGIELLO BROS., Inc., et al.

Court of Chancery of New Jersey.

March 27, 1936.

Syllabus by the Court.

1. When a complainant in a foreclosure sale has obtained a final decree against the defendant mortgagor and has allowed the sale thereunder to stand over for several years for the purpose of allowing payments to be made by the mortgagor, he will not be permitted to apply the payments made by the mortgagor on the mortgage contract as though no decree had been entered and afterward proceed with the sale and credit the amounts paid upon account of interest, premiums, and fines due under the mortgage contract over the objection of a second mortgagee who is a party to the suit. Such payments must be applied on the decree and not on the mortgage.

2. When a mortgage is foreclosed and final decree entered, the debt becomes a debt of record, which is evidenced by the record of the court, and the decree draws legal interest from the date of its entry.

3. Complainant in such a case cannot lay aside a decree for the purpose of applying payments on the mortgage which has been merged in the decree and then proceed with a sale thereunder.

Suit by the Colonial Building-Loan Association against Mongiello Brothers, Incorporated, and others.

Decree in accordance with opinion.

George G. Tennant, of Jersey City, for complainant.

Bart R. Boyle, of Bayonne, for defendant, Mongiello Bros, Inc.

George B. Astley, of Newark, for defendant, Delaware, Lackawanna & Western Coal Co.

KAYS, Vice Chancellor.

This matter comes before me on exceptions to a master's report.

The facts in the case are that complainant, the holder of a first mortgage known as an installment building and loan mortgage, for the principal sum of $45,000 covering property in Bayonne, N. J, owned by the defendant, Mongiello Brothers, Inc., began foreclosure of its mortgage. The defendant, the Delaware, Lackawanna & Western Coal Company, is the owner of a second mortgage for the principal sum of $50,000. The bill to foreclose was filed May 22, 1933, and alleged arrearages in interest, premiums, and fines for three or four months prior to the filing of the bill. At the time the bill was filed, all installments had been paid except for the month of April, and interest and premiums for the months of March and April, 1933. Mongiello Brothers, Inc., continued to make payments during the foreclosure proceedings amounting to about $2,919.36 until the interlocutory decree was entered, which payments were credited by the complainant on the installments, interest, dues, and fines due to it from the mortgagor. Interlocutory decree was entered on August 26, 1933. Defendant, during this period, also paid taxes amounting to over $5,000 and water rents in the sum of about $393. On September 11, 1933, complainant's solicitor wrote defendant, Mongiello Brothers, Inc., stating that it had not paid the taxes within the time agreed upon and that, therefore, an interlocutory decree had been entered on August 26, under which the complainant would be entitled to prove his mortgage before a master, but that he disliked to do so if there could be a definite understanding relative to the payment of the taxes for 1932 and 1933 which amounted to around $10,600. On November 4, 1933, complainant proved the amount due on its mortgage before a master as also did the defendant, the Delaware, Lackawanna & Western Coal Company. The amount due complainant at that time was $30,043.15, and the amount due on the mortgage of defendant, the Delaware, Lackawanna & Western Coal Company was $50,525. On November 14, 1933, the final decree was entered. Complainant did not proceed with the execution and sale under this decree, but induced the defendant to make further payments. These payments between November 14, 1933, and March, 1935, amounted to about $7,467.87. Defendant, Mongiello Brothers, Inc., also paid taxes covering said premises for the years 1931, 1932, and 1933, totaling $12,469. The said mortgagor also paid water rents in the approximate sum of $2,300. In March, 1935, a writ of fieri facias, which complainant had been holding since November 14, 1933, was delivered to the sheriff and the property advertised for sale. The sale, however, was adjourned from time to time on the promise of Mongiello Brothers, Inc., to pay additional sums to the complainant. Such payments were made to the complainant amounting to $3,505.29 and payments of taxes for the years 1934 and 1935 were made by the said defendant amounting to $6,600 and payments of water rents covering a period from March, 1935, to November, 1935, amounting to approximately $3,300. In November, 1935, Mongiello Brothers, Inc., owed taxes for the balance of 1935 of approximately $2,000 and water rents amounting to about $1,400. Evidently, for some reason, the complainant decided to proceed with the sale and so notified the defendant, the Delaware, Lackawanna & Western Coal Company, stating, however, to said company that it did not object to an adjournment. The sale thereupon was adjourned and another payment was made by the defendant, Mongiello Brothers, Inc., to complainant of $419.79. On December 2, 1935, the solicitor for Mongiello Brothers, Inc., and an officer of the Delaware, Lackawanna & Western Coal Company appeared at a meeting of the complainant association and discussed the matter of payments which had been made by Mongiello Brothers, Inc., to complainant and the application of the same on complainant's mortgage and decree. On December 3, complainant wrote the defendant, the Delaware, Lackawanna & Western Coal Company, to the effect that they would oppose any further adjournment of the sale unless the said defendant agreed that the application which the complainant had made of the payments received from Mongiello Brothers, Inc., was agreed to by the defendant, the Delaware, Lackawanna & Western Coal Company. It appears that the complainant had applied the payments to it by Mongiello Brothers, Inc., on dues, fines, premiums, and interest the same as if the mortgage were still in existence and no decree had been entered. After receipt of this letter by complainant, the defendant, the Delaware, ...