Fid. Union Trust Co. v. Petchesky

Decision Date06 February 1936
Citation183 A. 472
PartiesFIDELITY UNION TRUST CO. v. PETCHESKY et al.
CourtNew Jersey Court of Chancery

Syllabus by the Court.

1. Quaere: Can an interlocutory order or decree be opened after expiration of the time for appeal in the absence of newly discovered evidence or special equities?

2. An order confirming foreclosure sale is a final decree within the meaning of the statute relating to appeals.

3. The grounds for refusing confirmation set forth in Young v. Weber, 117 N.J.Eq. 242, 175 A. 273, constitute a special equity for opening order of confirmation after expiration of time for appeal.

Suit by the Fidelity Union Trust Company against Harry Petchesky and others, wherein defendants filed petition to open an order confirming sale of mortgaged premises. On motion to dismiss petition.

Motion denied.

Hood, Lafferty & Campbell, of Newark, for complainant.

Fast & Fast, of Newark, for defendants.

BIGELOW, Vice Chancellor.

This cause is before the court on defendants' petition to open an order confirming the sale of mortgaged premises. Complainant, who was the purchaser at the foreclosure sale, moves to dismiss on the ground that the petition was filed too late, namely, more than forty days after confirmation. Counsel say that in the absence of newly discovered evidence or special equities, an order which is not a final decree cannot be opened on application made after forty days; that an order confirming sale is not a final decree; that the petition discloses no special equity, and so should be dismissed.

The conclusion of counsel runs counter to the practice of this court in numerous cases in the last few years. All the members of the court have received and acted upon similar applications more than forty days after the date of the order confirming sale. A few such cases have been reported. Lurie v. J. J. Hockenjos Co., 113 N.J. Eq. 504, 167 A. 766, affirmed 115 N.J.Eq. 304, 170 A. 593; Meranus v. B. & L. Ass'n, 116 N.J.Eq. 402, 174 A. 150; Fruzynski v. Jablonski, 117 N.J.Eq. 117, 175 A. 112; Bluestone B. & L. Ass'n v. Glasser, 117 N. J.Eq. 392, 176 A. 314. Two of these cases were reviewed by the Court of Errors and Appeals. If there be such a forty-day rule, it is strange that counsel and members of this court and of the appellate court have not remarked on it before now. Established practice is presumably correct.

Counsel, to prove his major premise that an application to open an interlocutory order must be made within forty days, first calls attention to section 111 of the Chancery Act (1 Comp.St.1910, p. 450, § 111), as amended P.L.1914, p. 133, (Comp.St.Supp. 1924, § 33—111). "All appeals except from final decrees shall be made within forty days after filing the order or decree appealed from." To this enactment, he applies the rule of Watkinson v. Watkinson, 68 N.J.Eq. 632, 60 A. 931, 932, 69 L.R.A. 397, 6 Ann.Cas. 326, that a bill of review to set aside a final decree must be filed within the time of appeal limited by the statute, unless there be newly discovered evidence or some special equity. Mitchell v. Mitchell, 97 N.J.Eq. 298, 127 A. 185, approved of the procedure by petition to open a final decree in lieu of bill of review and held that such a petition is subject to the same limitations.

The first question is whether the rule applies to a motion to open an interlocutory order or decree, and so removes such an order from the control of the chancellor after the expiration of forty days.

The question came before the United States Supreme Court in Simmons Co. v. Grier Bros. Co., 258 U.S. 82, 42 S.Ct. 196, 199, 66 L.Ed. 475. An interlocutory decree adjudging a patent invalid had been entered January 5, 1916. Two years thereafter, and after the time for appeal or certiorari had run, a petition for leave to file a bill of review was presented and granted, and eventually the former decree was reversed. In the Supreme Court, Justice Pitney said: "Regarding, therefore, the decree of January 5, 1916, as an interlocutory, not a final, one, there is neither technical or substantial ground for applying to it the rules pertaining to a bill of review, and the bill herein called such is to be treated as essentially a petition for rehearing. By the sixty-ninth Equity Rule [28 U.S.C.A. following section 723], such a petition is in order at the term of the entry of the final decree; and, of course, if an interlocutory decree be involved, a rehearing may be sought at any time before final decree, provided due diligence be employed and a revision be otherwise consonant with equity." The decree of the District Court reversing the former decree was affirmed.

This decision has great weight, since our Court of Errors and Appeals derived the limitation on bills of review from the United States Supreme Court. Watkinson v. Watkinson, supra.

Our appellate court has held that a bill of review is not required to open an interlocutory order in a cause still pending. It is appropriate only to review a final decree. Franklin Electric Light Co. v. Fort Wayne Electric Corp., 58 N.J.Eq. 543, 43 A. 650. While the cause is pending and the proceeding is in fieri, the court has jurisdiction of the whole matter. Story Eq. PI.(10th Ed.) 408a. "Nor have we any doubt of the power of a court, while a case and the parties are before it, upon proper hearing, to reconsider, modify, and enlarge its previous orders in respect to a pending controversy. Such power and such authority is so familiar and so well understood that we see no occasion for citing authorities in support of it." Calaf v. Fernandez (C.C.A.) 239 F. 795, 798. The power exists until the close of the term at which the final decree is enrolled. Standard Savings & Loan Ass'n v. Aldrich, 163 F. 216, 89 CCA. 646, 20 L.R.A. (N.S.) 393; Lyle v. Lumber Co., 62 N.J.Eq. 797, 48 A. 783; 21 C.J. 701; 34 C.J. 216.

The limitation on the review of a final decree is a phase of public policy: A final decree should be a finality. Miller v. McCutcheon, 117 N.J.Eq. 123, 175 A. 155, 95 A.L.R. 702. It is a contradiction in terms to say that an interlocutory decree should be a finality.

There are, however, three cases in our reports which contain dicta which may mean that a motion to open an interlocutory decree cannot be entertained (except on special grounds) after the time to appeal has expired. Cumberland Lumber Co. v. Clinton, etc., Co., 84 N.J.Eq. 557, 94 A. 647; Nash v. Leiderman, etc., Co., 103 N. J.Eq. 287, 288, 143 A. 349; Gunstra v. New-Ark Petroleum Corp., Ill N.J.Eq. 451, 162 A. 746. And there is one case which perhaps so holds. McKenzie v. Standard Bleachery Co., 109 N.J.Eq. 429, 157 A. 845, 846. On a petition that a former order be vacated, Vice Chancellor Lewis said: "It is apparent that this order is an interlocutory one, and is not a final decree. The time within which an appeal may be taken from such an order is, by P.L.1914, ch. 86, p. 133(Comp.St.Supp.1924, § 33—111), limited to forty days. The petition upon which the present application is based was not presented until June 22, 1931, or long after the expiration of the statutory period limited for the filing of an appeal, and consequently this court is without power to entertain it. This is in accord with the well-settled rule that a petition to open or vacate an order or decree of this court cannot be entertained after the expiration of the statutory period allowed for an appeal from such order or decree." But the vice chancellor also pointed out that the order had been carried into effect so that nothing remained other than a moot or academic question. He then found, after extended consideration, that the merits would have required a denial of the application.

Because this decision of Vice Chancellor Lewis was based on several grounds, I feel that it does not definitely establish that when the time to appeal elapses, an order which is not a final decree passes beyond the control of the court, except for newly discovered matter or some special equity. But I need not decide the point.

Now to the second question—whether an order confirming sale is a final decree within the meaning of section 111 of our Chancery Act (1 Comp.St.1910, p. 450, § 111), as amended in 1914 (Comp.St.Supp. 1924, § 33—111): "All persons aggrieved by any order or decree of the Court of Chancery, may appeal from the same or any part thereof to the Court of Errors and Appeals; and all appeals except from final decrees shall be made within forty, days after filing the order or decree appealed from; and all appeals from final decrees in the said court shall be made within one year after making such decree; unless a notice of lis pendens has been filed or on bills to quiet title in which cases all appeals from final decrees shall be made within three months after filing the decree appealed from; provided, in cases where the person entitled to such appeal from any final decree be an infant or insane he shall have one year to bring such appeal after such disability shall be removed, except where a notice of lis pendens has been filed or the bill is filed to quiet title of the lands, in which case the appeal shall be taken within three months after such disability is removed." P.L.1902, p. 545, as amended P.L. 1907, p. 452, P.L. 1914, p. 133.

All orders and decrees of chancery may be divided into four classes:

I. Orders which are not appealable because no one, technically speaking, is aggrieved. Such are the ordinary orders made in the progress of a suit for the purpose of putting the case fairly at issue, obtaining the requisite evidence, and affording the parties a hearing. Coryell v. Holcombe, 9 N.J.Eq. 650, 651; Camden & Amboy R. & Transp. Co. v. Stewart, 21 N. J.Eq. 484; Stevens' Executrix v. Stevens' Executors, 24 N.J. Eq. 574. Such also are orders taken by default or entered without objection. New Jersey, etc., Co. v. Lord, 66 N.J.Eq. 344, 58 A. 185.

II. Orders which are appealable within forty days and which, if not appealed within...

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