liability to any of the other parties, including the personal representative of the Estate of Menander T. Constant. Klepper will therefore be considered as having been dropped as a party to the present litigation.
The order of priority of the liens of the three mortgages and the Kero judgment has been determined by the New Jersey Court in the Schnur mortgage foreclosure action.
At the commencement of the final hearing of this case on December 11, 1958, application was made in behalf of Sidney Benson and Beril Kraus, to intervene as further claimants, by reason of a judgment which they recovered in the New jersey Superior Court on April 15, 1957 against Hadji Realty Corp., Menander T. Constant and Marie M. Constant, upon which there is presently due the sum of $ 14,765.91. Because of the conclusions hereinafter expressed, it becomes unnecessary to pass upon the application of these judgment-creditors to intervene.
I am here called upon to determine the effect of the assignment of the policy and letter from Klepper to Constant dated February 8, 1956 upon the claims presently asserted to the balance of the proceeds of the insurance policy remaining on deposit in the registry of this Court. I construe the language of the two documents in question as constituting Klepper the beneficiary and assignee of the policy, in trust nevertheless to hold it and the proceeds thereof as collateral security for the payment of the Schnur and Weiner mortgages, and the indebtedness secured by each of these mortgages. The institution and prosecution of the Schnur foreclosure with its inclusion, as parties defendant, of the holder of the Weiner and Tanner mortgages is an appropriate initial recourse to the primary security for the indebtedness referred to in each of the mortgages, viz., the real estate covered thereby. The judgment in that foreclosure action has established the order of priority and amount due upon each of the successive mortgages and the Kero judgment. In entering his judgment in the foreclosure action, Judge Wick expressly refrained from making any adjudication of the right of any party to the moneys on deposit in this Court in the present action.
I therefore direct the defendants Edward Schnur and Tanner Associates, Inc. to bring on with all diligence the foreclosure sale of the mortgaged property in accordance with the New Jersey foreclosure judgment. I conclude that, to the extent of any deficiency in the proceeds of such sale from the amount declared by the foreclosure judgment to be due to Schnur, he shall be entitled to receive payment of such deficiency out of the moneys on deposit in this Court. If, after satisfying Schnur's judgment, there remains a balance of the fund on deposit in this Court, it shall be applied and paid to Tanner, as assignee of the Weiner mortgage, to the extent of the difference, if any, between the amount declared due in the foreclosure judgment upon that (second) mortgage, and the balance, if any, remaining of the proceeds of sale of the mortgaged lands after their initial application to the satisfaction of the amount due on the Schnur mortgage. If, after satisfaction of the amounts found due by the foreclosure judgment upon each of the first two mortgages, in the manner herein provided, there shall still remain a balance in the fund on deposit in this Court, such balance shall be paid to Marie M. Constant, as Executrix of the Estate of Menander T. Constant, subject to the claims of creditors of said estate.
The foregoing opinion shall constitute this Court's findings of fact and conclusions of law in this case, and an order may be presented in accordance with the views herein expressed.
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