Wootton v. Pollock

• Decision Date: 17 September 1934
• Citation: 174 A. 497
• Parties: WOOTTON et al. v. POLLOCK et al.
• Court: New Jersey Court of Chancery

174 A. 497

WOOTTON et al.

v. POLLOCK et al.

Court of Chancery of New Jersey.

Sept. 17, 1934.

Syllabus by the Court.

1. An original obligor, when brought into equity by a complainant seeking a deficiency decree against him and his grantee who has assumed the debt, is entitled to interpose a statute providing for limitation of time within which an action may be brought.

2. Statutes of limitations affecting existing rights are not unconstitutional if a reasonable time is given for the commencement of an action before the bar takes effect, and the Legislature is primarily the judge as to the reasonableness of the time allowed, and courts will not overrule the decision of the Legislature, unless a palpable error has been committed.

Bill by Thomas B. Wootton and others, administrators c. t. a. of the estate of Mary A. Wootton, deceased, against Louis R. Pollock and others. On motion to strike.

Motion granted.

William Charlton, of Atlantic City, for complainants.

Wm. M. & Thos. R. Clevenger, of Atlantic City, for defendant William R. Layton, executor.

Moore & Butler, of Atlantic City, for defendant Louis R. Pollock.

SOOY, Vice Chancellor.

The bill in this cause is filed for the purpose of securing a deficiency decree against the devisees and legatees of the original mortgagor and against the grantee of the original mortgagor; said grantee having assumed and agreed to pay the original debt.

The bill in this cause is admittedly filed within six months of the sale of the mortgaged premises under foreclosure, but not within three months from said date, as provided in P. L. of 1933, c. 82, p. 172 (N. J. St. Annual 1933, §§ 134-48, 134—49).

The legatees of the original mortgagor and obligor have moved to strike the bill of complaint on the ground, inter alia, that the bill was not filed within three months after the date of the sale of the mortgaged premises under the foreclosure, and it is asserted by these defendants that the bill, under chapter 82 of the Laws of 1933, must have been filed by that time, or the suit is barred as to them. They admit that, as to the defendant who assumed and agreed to pay the mortgage debt, the act above referred to does not apply and, in fact, that defendant has made no motion directed to the bill.

There is no dispute but that the language contained in the deed, under which the defendant Pollock assumed the payment of the debt, created an obligation on his part for the payment thereof, which the mortgagee may enforce in equity as against Pollock, and there is no dispute but that the remedy is in equity and not in law, and that the mortgagee, in order to avoid a circuity of action, had a right to join the original mortgagor as a party defendant in his equitable suit.

It is true that in the case of Black Diamond B. & L. Ass'n v. Redlinghouse, 113 N. J. Eq. page 1,165 A. 630, Vice Chancellor Stein held that the statutes, section 48, 3 Comp. St. 1910, p. 3421 (P. L. 1880, p. 255, as amended by P. L. 1881, p. 184), did not impair the remedy of the complainant in that case.

The cases relied on by Vice Chancellor Stein were Green v. Stone, 54 N. J. Eq. 387, 34 A. 1099, 1100, 55 Am. St Rep. 577, and Holland Reformed School Society v. De Lazier, 84 N. J. Eq. 442, 93 A. 199.

An inspection of these two cases discloses that the suit in the first above cited case was by Green, mortgagee, against Stone, a purchaser from the mortgagor of a portion of the mortgaged premises, praying a decree that the defendant pay the balance of the mortgage debt remaining unpaid after applying thereto the amount realized from the foreclosure and sale of the mortgaged premises. In other words, in that suit, the original mortgagor was not a party, nor was any decree sought against him.

In the second above cited case, the bill was filed by the original mortgagor, who had paid a deficiency judgment secured against him in the law courts against a grantee who had, subsequent to the execution and delivery of the bond and mortgage, purchased the premises and assumed the payment of the debt.

In both of the above cases, it was held that the complainants could recover under "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 in a court of equity to enforce this equitable doctrine, are not impaired by this legislation," i. e., the Acts of 1880 and 1881.

In neither of the above-cited cases did the court pass on the question as to whether or not, in a suit brought by the mortgagee against the original obligor, joining with the original obligor the assuming vendee, the statute applied as between the complainant and the defendant, original obligor.

There is no question but that, if the complainant had endeavored to recover the deficiency against the original obligor at law, the proceedings for the recovery thereof must have been started within the statutory time, and that, if it was not so started, the cause of action was dead.

The original obligor has been brought into a court of equity for the convenience of the complainant in securing a judgment, both against the original obligor and his grantee who assumed the mortgage, and the question is whether or not the defendant, original obligor, is to be deprived, in a court of equity, of an absolute bar which he would have had in a court of law. In other words, will equity deprive him of a defense which he had in a court of law, merely because the complainant sees fit to avoid the circuity of action by suing both parties in equity?

It seems to me that the answer to the above question is obvious, and that the answer is that "an equity will not be enforced at the expense of a legal right. A legal right prevails over a pure equity." Papp v. Metropolitan Life Ins. Co., 113 N. J. Eq. 522, at page 528, 167 A. 873, 875.

Were this answer not correct, there is no statute of limitations as against the original obligor, when brought into this court as he is herein, other than the statute which provides a limitation of sixteen years on bonds, so that the very tiling that the legislation of 1881 was enacted to accomplish would be thwarted in each instance where the mortgagee was privileged to sue in equity the original mortgagor and his assuming grantee.

In the Black Diamond Case, an inspection of the stipulation before the Vice Chancellor, setting forth the facts, discloses that the bill was filed within the statutory period, so that it was not necessary for a decision in that case for the Vice Chancellor to pass on the question as to whether or not the provisions of the Acts of 1880 and 1881, in so far as they related to the statute of limitations was concerned, applied or not, so that that case is not an authority for the denial of the motion to strike in this case.

The rule that equity follows the law is not of universal application, and, as stated in 1 Pomeroy (4th Ed.) p. 796, § 427, "Throughout the great mass Of its jurisprudence, equity, instead of following the law, either ignores or openly disregards and opposes the law," and as stated by Vice Chancellor Berry, in Giberson v. First National Bank of Spring Lake, 100 N. J. Eq. at page 508, 136 A. 323, 325, "if the ends of justice require it, equity may hurdle as well as go around" the law, but, unless the ends of justice require it, equity will follow the law and protect a party litigant from being deprived of the defense which, had he been sued at law, would constitute a complete bar.

The result is that the defendant, the original obligor, when brought into equity by a complainant seeking a deficiency decree against him and his grantee who has assumed the debt, is entitled to interpose as a defense the statute providing for a limitation of time within which an action may be brought.

The complainant says that, irrespective of the questions heretofore discussed, he has complied with the provisions of the act of 1881 by bringing his suit within the six months' period, and that the act contained in chapter 82 of the Laws of 1933 is unconstitutional and not operative to change the period within which suit must be brought from six months to three months.

It is true that the Court of Errors and Appeals, in the case of Vanderbilt v. Brunton Piano Co., 111 N. J. Law, 596, 169 A. 177, has declared that the provisions of that act, "setting up fair market value as a single, self-sufficient, resistless fact in reduction of a deficiency on a mortgage debt as fixed by a foreclosure sale under chapter 170, P. L. 1880, p. 255 (3 Comp. St. 1910, p. 3120, § 47), do not constitute a remedy of substantially like sort and character with that existing in the Court of Chancery," and that that act, in that respect, is unconstitutional, in that it limits or restricts the pre-existing right of recovery on the bond.

The question is, then, is the unconstitutional part of chapter 82 separated from that part which may be constitutional, or is the unconstitutional part of the act wholly independent of the other parts? because "if they are so connected and dependent as to warrant the belief that the legislature intended them as a* whole, they must; stand or fall together."...