Valz v. Sheepshead Bay Bungalow Corp.

• Decision Date: 19 July 1928
• Citation: 163 N.E. 124,249 N.Y. 122
• Parties: VALZ et al. v. SHEEPSHEAD BAY BUNGALOW CORPORATION et al.
• Court: New York Court of Appeals Court of Appeals

249 N.Y. 122

163 N.E. 124

VALZ et al.

v.SHEEPSHEAD BAY BUNGALOW CORPORATION et al.^*

Court of Appeals of New York.

July 19, 1928.

Action by Randolph M. Valz and others against the Sheepshead Bay Bungalow Corporation and others. From a judgment of the Appellate Division (221 App. Div. 280, 223 N. Y. S. 329), affirming a judgment of Special Term, dismissing the complaint on the merits, plaintiffs appeal.

Affirmed.

Cardozo, C. J., and Pound and Kellogg, JJ., dissenting.Appeal from Supreme Court, Appellate Division, Second Department.

Louis Marshall and Robert E. Lewis, both of New York City, for appellants.

Hugo Hirsh, Morgan J. O'Brien, Jr., and Bernard Sobol, all of New York City, for respondents American Trust Co., and others.

Clarence F. Corner, of Brooklyn, for respondents Flatbush Sav. Bank and others.

LEHMAN, J.

Antonio M. Valz, a resident of Virginia, executed in 1912 a mortgage for the sum of $25,000 upon certain real estate which he owned in the county of Kings. Valz died in July, 1916, leaving a widow, Julia I. Valz, and six children, his heirs at law. In July, 1916, the holders of the first mortgage brought an action for the foreclosure of the mortgage. In that action an order was duly made for service by publication of a supplemental summons upon the nonresident defendants named therein, among whom were the children and heirs at law of Valz. The order provided for publication in two newspapers, the Brooklyn Daily Times and the Brooklyn Citizen. It also provided for the deposit in the general post office of sets of copies of the summons and complaint and of the order of publication, directed to the defendants named in the order, at the addresses therein specified.

Through an unfortunate mistake of a clerk in the office of the attorney for the plaintiff in the foreclosure action, service of summons was not made, in accordance with the terms of the order, by publication in the Brooklyn Daily Times. Instead, the summons was published in the Brooklyn Daily Eagle, a newspaper with a slightly larger circulation. All the subsequent proceedings in the action were taken upon the mistaken assumption that the order of publication so provided. Copies of the summons and complaint, directed at correct addresses to the nonresident parties defendant in the foreclosure action, including the children and heirs at law of Valz, were deposited in the general post office in Booklyn, and were received by the parties to whom they were directed. The ‘copy’ of the order of publication inclosed therewith recited that publication was directed to be made in the Brooklyn Daily Eagle. The proof of publication contained similar recitals.

The heirs at law of Valz who resided in Virginia did not appear in the action. Judgment of foreclosure was entered upon their default, and the property was sold for the sum of $10,000. In 1924 the plaintiffs in the foreclosure action procured ex parte an order amending nunc pro tunc the order for service by publication, by inserting the words ‘Brooklyn Daily Eagle’ in place of Booklyn Daily Times.

Since the sale in the foreclosure action there has been a manifold increase in the value of the property. It has been subdivided and improvements costing hundreds of thousands of dollars placed upon it. Though the nonresident owners of the equity of redemption-the heirs at law of Valz, the mortgagor-received copies of the summons and complaint in the foreclosure action, and chose not to appear therein, they now claim that the judgment of foreclosure is not binding upon them because the summons was not published as directed in the original order of publication. They bring this action to redeem the property, which has now become very valuable, from the lien of the mortgage. They urge that, though they knew of the foreclosure action, they had no legal notice of it. The courts below have held that the failure to publish the summons as directed in the original order constituted only an irregularity which the court might by subsequent order correct.

There is no dispute in regard to any question of fact. The findings of fact are substantially in accord with the stipulation of the parties and the records on file in the court in which the judgment of foreclosure and sale was made and entered. Upon those findings the court has based the conclusions that ‘the publication by inadvertence in the Brooklyn Daily Eagle, instead of in the Brooklyn Daily Times, was a mere irregularity, which could be cured, and was cured, by the nunc pro tunc order of April 14th, 1924,’ and ‘that in the said foreclosure action * * * jurisdiction of the widow of Antonio M. Valz and of the heirs at law of Antonio M. Valz was duly obtained.’ The sole question presented by the plaintiffs and passed upon by the courts below is whether the court in the foreclosure action acquired jurisdiction to render judgment binding upon the nonresident defendants in that action. If the conclusion of the courts that the court had jurisdiction to foreclose the nonresidents of their rights to the property was erroneous, then undoubtedly these nonresidents have been deprived of their property without due process of law, despite the provisions of the state and federal Constitutions.

The Legislature has the power to provide for service of the summons without the state by mail and publication. It is not disputed that service of a summons in the manner provided by the statute gives to the nonresident defendants sufficient notice of the action and opportunity to appear and be heard therein, and that a judgment rendered thereafter, even though the nonresident defendants do not appear, is a judgment rendered in accordance with due process of law. There must, however, be a substantial compliance with these provisions of the statute; otherwise the court is without jurisdiction to render a judgment binding upon a nonresident who has not appeared. The Legislature must determine the steps which must be taken to confer jurisdiction upon the courts of the state. Notice to a defendant of the pendency of the action given in other manner is nugatory and may be disregarded. Wuchter v. Pizzutti, 276 U. S. 13, 48 S. Ct. 259, 72 L. Ed. 446, and cases there cited.

The Legislature of New York has provided the method to be used for service of the summons upon nonresident defendants in sections 438 to 442 of the Code of Civil Procedure (now section 232 of the Civil Practice Act and rules 50 to 52 of the Rules of Civil Practice). First there must be an order for publication based upon sufficient affidavits. Such an order has been made in this case. The order must contain a direction to publish the summons in at least two newspapers designated in the order, not less than once a week for six successive weeks. It must also contain either a direction that copies of the summons, complaint and order be deposited in a post office, directed to the defendant, or a statement that the court or judge, ‘being satisfied that the plaintiff cannot * * * with reasonable diligence, ascertain a place or places, where the defendant would probably receive matter transmitted through the post office, dispenses with the deposit of any papers therein.’ Some discretion is vested in the judge as to what newspapers shall be designated. In other matters the Legislature has itself directed what provisions for service of the summons shall be contained in the order.

It was conceded upon the argument that the Legislature might have provided that publication might be made in two newspapers selected by the court before publication is begun, or approved by the court thereafter; or the Legislature might have provided in express terms that where, through inadvertence, publication is made in a newspaper other than one of those selected by the court, the court might thereafter disregard the error as a mere irregularity. If the Legislature had so provided in express terms, then, perhaps, no substantial claim could have been made that the judgment was not binding upon the nonresident defendants named in the summons, and no substantial constitutional question would be involved. Here the Legislature has not so provided in express terms, but the courts have so construed the statute. On the grounds that the construction of the statute and not the construction of the Constitution of the state or of the United States is directly involved (Civil Practice Act, § 588), the respondents have moved to dismiss the appeal taken without permission.

The terms ‘directly’ or ‘indirectly’ involved are relative rather than absolute, and hence are not capable of unvarying definition. We have held that upon an appeal from a decision that the Legislature did not, by statute, intend to make the expenses incurred by a county officer, removed by the Governor, a county charge, the question of whether a statute which did make such expenses a county charge would be constitutional was not directly involved. People ex rel. Moss v. Board of Supervisors of Oneida County, 221 N. Y. 367, 117 N. E. 578. See, also, Haydorn v. Carroll, 225 N. Y. 84, 121 N. E. 463;People ex rel. Curtis v. Kidney, 225 N. Y. 299, 122 N. E. 241. It is to be noted that in these cases the primary question presented to the courts involved only the meaning of a statute, and, even if the construction placed upon the statute was erroneous, the error would not deprive any party of a constitutional right. Not so here. The sole question presented to the courts in the instant case is whether the judgment of forecloseure is based upon due process of law. That question involves directly and necessarily the construction of the Constitution. True it is that, in determining that question, the courts must give consideration to the proper construction and effect of the statute. Perhaps, indeed, that consideration may be decisive. Even so, we construe the statute only to determine whether under the due process clauses of the state and United States Constitutions the judgment of...