time of service, or to show cause in a court of record, or at a county court, in a county in which the property is situated, at a time and place specified therein, why the notice of lien filed should not be. vacated and canceled of record. Proof of such service, and that the lienor has not commenced the action to foreclose such lien, as directed in the notice, shall be made by affidavit, at the time of applying for such order.

On the 24th of June, 1903, a summons and complaint in an action to foreclose the lien were prepared by the plaintiff's attorney. The action was instituted against the respondent and one Edward E. Paul. Process was served within the 30 days upon the defendant Paul, but not upon the respondent. Thirty days having elapsed, and no service of process having been made upon the respondent, he moved. to vacate and cancel the notice of lien. The court at Special Term denied the motion, and this appeal is taken from the order entered upon such denial.

Section 3417 of the Code of Civil Procedure is not a statute of limitation, nor does it make it compulsory upon the court to order the cancellation of a lien upon the failure of the lienor to begin a suit after notification to commence an action within 30 days after the time specified in the notice. It is a permissive statute, clothing the court with discretionary power. It is in no sense mandatory, and the lień does not fall by a noncompliance with the notice. Therein the Code provision differs widely from the rule of construction given to statutes relating to the same matter that were in force prior to the adoption of the Code provision. Section 22 of article i of the lien law (Laws 1897, p. 525, c. 418) provides that "this article is to be construed liberally to secure the beneficial interests and purposes thereof and substantial compliance with its several provisions shall be sufficient for the validity of a lien and to give jurisdiction to the courts to enforce the same." Section 3398 of the Code provides that "this title is to be construed in connection with article I of the lien law." In the Matter of Poole, 14 N. Y. Supp. 790, the General Term of the Court of Common Pleas held that the right of the owner of property to discharge a mechanic's lien on the return of notice prescribed by subdivision 5, § 24, c. 342, p. 591, Acts 1885, in case no action had been commenced within the time prescribed in the notice, is not absolute, but the court has power and it is its duty to consider the equities of the case in determining the application. The provision of subdivision 5 of section 24 of the mechanic's lien law of 1885, relating to this subject, is almost identical in phraseology with the provision of section 3417 of the Code of Civil Procedure. In the Matter of Poole, supra, the court remarks that:

"The statute pursuant to which the notice was served provides that the owner may give notice to the lienor to bring an action of foreclosure by a day named, or show cause why the lien should not be vacated, and further provides that the court may make an order vacating the lien. The language of the statute is plain and intelligible. The intention of it was clearly to enable the owner to require the lienor to test the validity of his lien speedily, and to give to the court power to vacate or discharge the lien in case the action was not commenced, or sufficient reason presented to the court excusing the lienor for not commencing action in the time named in the notice."

and 118 New York State Reporter

It is further remarked that:

"A proper and equitable construction of this statute gives the court not only the power, but makes it the duty of the court, to take into consideration the equities of the case and exercise a sound discretion in granting or refusing the application. Equitable Life Insurance Soc. v. Stevens, 63 N. Y. 341. If the intent of the statute was that the right of the owner to have the lien discharged upon the return of the notice, in case no action was commenced within the time mentioned in the notice, should be absolute, the application to the court is an idle ceremony."

That the power to vacate the lien rests in the sound judicial discretion of the court follows from the fact that the lienor is permitted to show cause why the lien should not be discharged. As said in the Poole Case, if the requirement of the statute_were mandatory, showing cause would be a mere idle ceremony. It could not avail to relieve the lienor from a default.

The cases in which it has been held that failure to comply with the notice to begin suit avoided the lien arose under statutes which were strictly construed as being in derogation of the common law. For instance, Mushlitt v. Silverman, 50 N. Y. 360, where the case arose under the mechanic's lien law of Kings county. Chapter 478, p. 947. Laws 1862. By that act it was provided, in terms, that the lien should be discharged by the omission of the lienor or claimant to file an affidavit of the issuing and service of a summons and complaint, in an action to enforce the lien, within 30 days after a day specified for the commencement of an action in a notice which the owner was permitted to give requiring the action to be commenced on or before a certain hour on such specified day. It was held that the act was an innovation upon the common law, affecting property rights and property, authorizing, as it did, property to be incumbered without or against the consent of the owner or without a resort to legal process or legal action; and that when the act declared, as it did, that the lien may be discharged in any one of several methods, the happening of any of the events, or the performance of any of the acts mentioned, operated per se as a discharge, without the necessity of further acts by any person. The decision in that case proceeded upon a strict construction of the statute. But now the statute must be liberally construed and a discretionary power is conferred upon the court. In the Mushlitt Case the statute prescribed conditions for the continuance of the lien, and it was held that courts could not dispense with them nor relieve the party from the consequences of an omission.

In the case at bar the lienor showed sufficient cause why the lien should not be discharged. He had within the 30 days prepared his summons and complaint, which were served upon one of the defendants. Efforts were made to serve it upon the owner (appellant), but, in consequence of the inability of the process server to find him, service was not made. Failure to make the service was sufficiently excused. The summons was actually served on the owner on the 30th of June, 1903.

The order appealed from should be affirmed, with $10 costs and disbursements. All concur.

(87 App. Div. 262.)

NEW YORK SECURITY & TRUST CO. et al. v. SCHOENBERG et al.

(Supreme Court, Appellate Division, First Department.

November 6, 1903.) 1. MORTGAGES-SATISFACTION-CANCELLATION-PARTIES-CONTINGENT REMAIN

DERMEN.

Under the Revised Statutes, providing that contingent remainders are future estates devisable, descendible, and alienable, where suit was brought to set aside the satisfaction of certain mortgages on property which had been devised to a widow, with contingent remainders to certain minors, and to foreclose such mortgages, the action was not an ordinary suit for foreclosure of mortgage, but was for the imposition of a new lien on the property, and hence such contingent remaindermen were necessary parties.

2. JUDICIAL SALES-COMPLETION-LIABILITY OF PURCHASER-MARKETABLE TITLE.

Where there was a reasonable doubt as to whether a contingent remainderman was a necessary party to a suit to impose an equitable lien on land, and he was not made a party to such suit, the purchaser would not be compelled to accept the title.

8. SAME ESTOPPEL.

That a purchaser at a judicial sale of real estate purchased with knowledge that a certain contingent remainderman had not been made a party to a suit affecting the title, did not estop such purchaser from refusing to complete the sale on the ground that the title was unmarketable by reason of such defect.

Patterson, J., dissenting.

Appeal from Special Term, New York County.

Action by the New York Security & Trust Company and another against Rosalie Schoenberg and others and the North River Savings Bank. From an order requiring defendant bank to complete its purchase of certain real estate, it appeals. Reversed.

The order appealed from directed the North River Savings Bank to complete its purchase of premises sold pursuant to a judgment herein entered. The action which resulted in the judgment directing the sale was brought by the plaintiffs to re-establish two prior mortgages on the premises, which had been satisfied by the proceeds of a mortgage held by plaintiffs, so that they might, by being subrogated to the rights of the original mortgagees, sell the premises, and receive the amount of their claim. Certain contingent remaindermen were not made parties to the action, and for that reason the bank refuses to take title, contending that they should have been included as parties. The plaintiffs contend that this is a simple foreclosure suit, and bence that it was not necessary to make as parties the contingent remainder

men.

The property in question was owned by Joseph Rosenfield, who died February 8, 1881, leaving by his first wife, who was then deceased, three children, who are still living, and a widow, now living, named Rosalie, and four children, who are also still alive, one of whom, Mrs. A. R. Jeffries, has an infant son. By his will the decedent gave to his wife all his estate in trust to receive the income thereof during her life, his entire estate at her death to vest absolutely in her children equally, and if any child died before her, leaving issue, such issue to inherit the share his parent would have received if living. There were also similar provisions in the will as to the disposition of the estate in the event that his widow should marry. In certain contingencies, therefore, a grandchild of the testator, by the will, and the three children of the first marriage, as heirs at law, might become seised of the premises; but these persons were not joined in the action. At the death of the testator there was due $7,000 on an outstanding mortgage against this property, and in 1883 a further mortgage for $2,500 was placed upon it by order of the court, in behalf of the widow and children. Thereafter, in

and 118 New York State Reporter

1886, by virtue of chapter 257, p. 436, of the Laws of 1886, another mortgage for $26,000 was given by the widow and her children on property including the premises in question, and the order permitting the giving of the mortgage directed that from the proceeds there should be paid the prior outstanding mortgage on which $7,000 was due, and the other mortgage of $2,500; and such mortgages were satisfied of record. And finally in 1891 a similar application was made by the widow and her children to mortgage the premises and other property of the estate for $30,000, which was granted; and two mortgages, one for $12,000, and the other for $18,000, were given, and by direction of the court the prior mortgage of $26,000 was paid. The plaintiffs, who are the owners of the $12,000 mortgage, subsequently discovered that under chapter 257, p. 436, of the Laws of 1886, the trust estate only could be mortgaged, and the estate in remainder would not be affected by any mortgage made under that act (Losey v. Stanley, 147 N. Y. 560, 42 N. E. 8), and therefore brought their action, as stated, to re-establish the original mortgages of $7,000 and $2,500, which were paid by their moneys, and, by being subrogated to the rights of the original mortgagees, foreclose such mortgages. The plaintiffs obtained a judgment directing a sale of the premises, and at such sale the bank bid for the property, but refused to complete the purchase. From the order directing the purchaser, the North River Savings Bank, to complete its purchase, this appeal is taken.

Argued before VAN BRUNT, P. J., and HATCH, PATTERSON, O'BRIEN, and LAUGHLIN, JJ.

Harold Swain, for appellant.

Lorenzo Semple, for plaintiff respondent.
Harold Nathan, for defendant respondent.

O'BRIEN, J. The question presented is whether, in an action such as this, the contingent remaindermen were necessary parties, or, differently expressed, whether the judgment is binding on certain contingent remaindermen who were not parties to the action.

The learned judge at Special Term, in granting the motion compelling the purchaser to complete its purchase, stated that the doctrine of Nodine v. Greenfield, 7 Paige, 544, 34 Am. Dec. 363, "has been repeatedly followed, never overruled, and must now be deemed the established law of this state." In view of the controlling influence which this decision exercised over the Special Term, it becomes important to examine into the facts of that case, and see precisely what questions were determined. The objection to the title therein was that children who were in existence at the time when the bill of foreclosure was filed, and who were the first devisees of the remainder in fee after the termination of the life estate of the widow, were not made parties to the suit. The contention that their equity of redemption was therefore not extinguished at the time of the sale in that suit was sustained, and in the opinion it was said:

"Where there is a contest in chancery in relation to real estate, or where there are several future and contingent interests in the equity of redemption, it is not necessary to make every person having or claiming a future and contingent interest in the premises a party to the bill, in order to bar his right or claim by the decree in the cause; but it is sufficient if the person who has the first vested estate of inheritance, and all other persons having or claiming prior rights or interests in the premises, are brought before the court."

While this decision, therefore, directly decided that certain vested remaindermen were necessary parties, we have dicta from which the

rule, frequently followed, has been deduced that in foreclosure actions it is only necessary to bring into court as parties those having the first vested estate of inheritance and those having prior rights.

In ordinary foreclosure suits we have thus the general rule established that it is sufficient to have as parties the first person in being who has a vested estate of inheritance, together with those claiming prior interests, and that in such suit those who may have a claim in remainder or in reversion after such vested estate of inheritance may be omitted as parties. This rule was based upon the English authorities, and upon the fact that, at common law, contingent remainders were regarded as being mere possibilities, which could not be transferred before the happening of the contingency otherwise than by estoppel. In other words, they were not estates in land. Under the Revised Statutes, however, contingent remainders are future estates, devisable, descendible, and alienable; and therefore, in actions affecting their interests, contingent remaindermen ought to be made parties. In ordinary foreclosure suits, as stated, the rule is well established that they are not necessary parties; but, with respect to actions other than simple foreclosures, we are referred to no case wherein it has been held that they are not necessary parties, and it is doubtful if the rule which has been made applicable to simple foreclosures will ever be extended in this state as long as the provisions of the present statutes relating to estates in land remain in force and effect.

As affecting foreclosure suits, taking the rules as stated to be established, it remains to be determined whether or not this is a simple foreclosure suit. Its purpose is to establish an equitable lien upon this property; and to that end it seeks, first, to set aside two satisfaction pieces of mortgages filed many years ago, and to re-establish such mortgages, and then to foreclose them. Here it appeared that the property in question was owned by one Joseph Rosenfield, and that after his death the executors and special guardian of his children executed two mortgages, pursuant to chapter 257, p. 436, Laws 1886. The Court of Appeals, in Losey v. Stanley, 147 N. Y. 560, 42 N. E. 8, held that under the provisions of that law the trust estate only could be mortgaged, and that the estate in remainder would not be affected by any mortgage authorized under that act. As this mortgage which the plaintiff held, therefore, did not cover all the interest which Joseph Rosenfield had in the property at his death, but only covered the trust estate held by the executors, it is sought in this action to re establish the mortgage which was a lien on the entire estate or interest which Joseph Rosenfield had in the property at the time of his death. This, together with the other mortgage sought to be reinstated as a lien, was long since satisfied. To reestablish these mortgages as liens, testimony was introduced tending to show that the money obtained by the executors upon the mortgage made pursuant to the laws of 1886 was used to discharge the mortgage which existed at the time of Rosenfield's death, and another mortgage made by his executors and trustees and children shortly after his death; and the plaintiffs, under the doctrine of subrogation, endeavored to re-establish these mortgages, to the end