Clinton v. South Shore Natural Gas & Fuel Co.

61 Misc. 339, 113 N.Y.S. 289
CourtNew York Supreme Court
DecidedDecember 15, 1908
StatusPublished
Cited by2 cases

This text of 61 Misc. 339 (Clinton v. South Shore Natural Gas & Fuel Co.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clinton v. South Shore Natural Gas & Fuel Co., 61 Misc. 339, 113 N.Y.S. 289 (N.Y. Super. Ct. 1908).

Opinion

Wheeler, J.

This action was brought to foreclose a trust mortgage given by defendant to secure an issue of bonds. The action has proceeded to a judgment of foreclosure and sale, and the referee appointed for that purpose is now advertising the mortgaged property for sale under the foreclosure decree.

A motion is now made on behalf of Johanna Kenney to open the judgment, and for permission to intervene and defend the action.

[340]*340It is claimed by the moving parties, and the affidavits tend to establish the fact, that the holders of the bonds secured by the trust mortgage are also the principal stockholders of the company, and control it — that they are also members of its board of directors, and its chief executive officers.

Miss Kenney, the moving party, some time in 1905, received most serious personal injuries by an explosion of natural gas, which it is claimed was caused by the negligence of the defendant’s servants. She sued the defendant to recover damages for her injuries. Her action was brought to trial at the Chautauqua Trial Term of this court in May, 1907. It resulted in a verdict and judgment in her favor of $20,000 damages, beside -the costs of the action. The gas company appealed to the Appellate Division of this court from said judgment. The appeal resulted in a reversal of said judgment and an order for a new trial. The order reversing said judgment was duly entered in the office of the clerk of Chautauqua county, on the tenth day of September, 1908; and opposite the docketing of the original judgment in favor of Miss Kenney was made a minute by the clerk, as follows: “Judgment vacated, set aside and reversed. Bee judgment file September 10, 1908.”

Ho appeal having been taken by Miss Kenney to the Court of Appeals from said judgment of reversal, the judgment in her favor against the defendant ceased to be a lien on the defendant’s property and cannot be restored; and, so far as Miss Kenney is now concerned, she has no lien upon or against any property of the defendant, she simply has a claim for damages against the defendant for alleged negligence on its part, which, upon a retrial of her action, may again ripen into a judgment. See Code Civ. Pro., § 1321.

In this connection, however, it will be well to note that, after the reversal of the judgment.in question by the Appellate Division, Miss Kenney made a motion at Special Term for leave to amend her complaint, increasing the demand for judgment to fifty thousand dollars. This was granted, and ■an appeal from that order taken by the defendant to the Appellate Division, which affirmed the order appealed from, with ten dollars costs of said appeal, and disbursements. [341]*341Again, in October, 1908, the defendant moved to put the trial of the ease over the October term, which the court granted on payment of ten dollars, term fee. hieither of these items of costs appears to have been paid. They, however, are not judgments against the defendant, and are not liens on the defendant’s property. Code Civ. Pro., §§ 779, 1251.

These items of costs may be collected by execution out of the personal property of the party against whom they are awarded, but constitute no lien and are not judgments.

Therefore, it appears that Miss Kenney, the moving party, at present is without judgment, or a lien of any kind against the defendant’s property. She has claims in litigation, which may, upon a retrial of her cause, result in a judgment, and a considerable judgment, against the defendant.

Anticipating such a possible outcome, either for the purpose of more effectually securing the payment of the bonded indebtedness, or for the purpose of defeating Miss Kenney in the collection of her claims out of the property of the defendant in the event of the successful outcome of the approaching trial of her action, or for both reasons combined, the bondholders, who are officers of the defendant, caused the foreclosure of the trust mortgage to be begun and prosecuted. They seek an early sale of the mortgaged property. The moving party now comes into court with affidavits tending to show the facts above stated, charging the defendant, its officers, stockholders and bondholders with a concerted scheme to defeat and render worthless any judgment the moving party may recover; and shows that no bonds secured by the mortgage were ever in fact issued until after the foreclosure of the trust mortgage had been begun.

The affidavits and proof on the part of the mortgage trustee, however, show, or tend to show, that, although the bonds were not, in fact, issued until after the foreclosure was commenced; the trust mortgage was given some years ago for the express purpose of securing 'Carroll Brothers for advances made and to be made by them to the defendant, for which advances bonds of the company were agreed to be issued and delivered, and that Carroll Brothers, for more [342]*342than a year prior to the commencement of the foreclosure action, had been and were entitled to said bonds, and that, when issued, they were issued in pursuance of such an agreement and a right to such bonds to the extent of $155,000'; and the counsel for the mortgage trustee 'argues that equity will deem as done, what should have been done, and that without the issue of any bonds whatever Carroll Brothers, in equity, still would have a right to insist on a foreclosure of the trust mortgage for their benefit; citing as authorities: Pom. Eq. Juris. (3d ed.), § 364, et seq.; Goodhue v. Berrien, 2 Sandf. Ch. 630, 633.

■Counsel for Hiss Kenney challenges that position, 'and asks leave to intervene and defend the foreclosure action on these grounds, and perhaps on other grounds suggested on the argument.

No proposed answer to the foreclosure complaint is served with the motion papers, and it is very doubtful whether a party should be given the right to intervene and answer in the absence of a proposed answer setting forth and defining the issue to be tendered, so that the court may judge whether the issue tendered has merit or not.

It is not necessary, however, in our judgment, to determine that question, because of the more serious objection raised to the granting of the relief asked, namely, that Hiss Kenney has no such interest in the subject-matter as to entitle her to be made a party to the foreclosure action.

The moving party relies on the provisions of section 452 of the Code of Civil Procedure, which reads: The court may determine the controversy, as between the parties before it, where it can do so without prejudice to the rights' of others, or by saving their rights; but where a complete determination of the controversy cannot be had without the presence of other parties, the court may direct them to be brought in. And where a person, not a party to the action, has an interest in the subject thereof, or in real- property, the title to which may in any manner be affected by the judgment, or in real property for injury to which the complaint demands relief, and makes application to the court to be made a party, it must direct him to be brought in by the proper amendment.”

[343]

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Bluebook (online)
61 Misc. 339, 113 N.Y.S. 289, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clinton-v-south-shore-natural-gas-fuel-co-nysupct-1908.