Probesco v. Anglo-American Dry-Dock & Warehouse Co.

31 N.Y.S. 110, 81 Hun 389, 88 N.Y. Sup. Ct. 389, 63 N.Y. St. Rep. 380

Opinion

DYKMAN, J.

This is an appeal from an order made at the special term, denying the petition of James Moore for leave to sue the Anglo-American Dry-Dock & Warehouse Company. The petitioner is the owner of two bonds for $1,000 each, issued by the company. They are part of an issue of 500 bonds of $1,000 each. All of the valid bonds of this issue are secured by second mortgage to Thomas Cochrane and William W. Flannagan. In 1891 an action was commenced to foreclose this mortgage, and that action is still pending. A protracted litigation ensued respecting the validity and consideration of many of the bonds. The judgment entered was reversed in part by the general term, and a new trial was ordered before the referee. 23 N. Y. Supp. 404.

The motion is based upon section 1628 of the Code of Civil Procedure, which is as follows:

“While an action to foreclose a mortgage upon real property is pending or after final judgment for the plaintiff therein, no other action shall be com rnenced or maintained, to recover any part of the mortgage debt without leave of the court in which the former action was brought.”

This statute manifests the intention of the legislature to place a restriction upon holders of bonds secured by a mortgage which is in process of foreclosure, and, unless a cogent reason is presented for the signature of the court under that section, it should be denied. In this particular case our conclusion is that all the bondholders should abide the result of the foreclosure suit, and that the order appealed from should be affirmed. All concur.