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Appell v. Reiner

Decided: February 18, 1965.

FREDERICK W. APPELL, PLAINTIFF,
v.
ROBERT J. REINER AND ELSIE REINER, HIS WIFE, DEFENDANTS



Pashman, J.s.c.

Pashman

The matter presently before the court involves a motion by plaintiff to amend the second pretrial order entered in this cause. The motion raises a question apparently never before decided by the courts of this State, namely whether an action on an underlying debt that is not a bond can be joined with an action to foreclose the mortgage.

The relevant facts pertinent to the present inquiry are as follows. Plaintiff, a New York lawyer, who has not been admitted to the New Jersey Bar, furnished legal services to defendants who are New Jersey residents. These services involved the extension of credit and the compromise of claims held by New York and New Jersey creditors. In consideration for these services, plaintiff received two promissory notes secured by two mortgages. Plaintiff then instituted the instant proceeding to foreclose the two mortgages. The action went to trial, and at the end of plaintiff's case the then trial judge granted defendants' motion to dismiss and directed the cancellation of the promissory notes and the discharge of the lien of the mortgages. Appell v. Reiner, 81 N.J. Super. 229 (Ch. Div. 1963). The rationale underlying the dismissal of plaintiff's action was the trial judge's determination that there could be no recovery for services rendered in connection with the negotiations with New Jersey creditors because this constituted the illegal practice of law in New Jersey.

On appeal, our Supreme Court reversed and remanded holding that:

"Under the peculiar facts here present, * * * plaintiff's agreement to furnish services in New Jersey was not illegal and contrary to public policy." Appell v. Reiner, 43 N.J. 313, 316 (1964).

Pursuant to R.R. 4:29-7, a new pretrial conference was held on December 22, 1964, and a pretrial order was entered which again confined the action to the foreclosure of the two mortgages and defendants' counterclaim seeking cancellation of the notes and mortgages.

Plaintiff now moves to amend the pretrial order to include a demand, in the alternative, for a judgment in favor of plaintiff for $11,082.98 plus interest from June 1, 1961 and costs, said sum being the reasonable value of legal services performed by plaintiff for the defendants. Defendants have opposed the motion on two grounds: (1) an action on the underlying mortgage debt cannot be joined with an action to foreclose the mortgage; and (2) the motion is made too late and attempts to inject a new cause of action not contemplated by the pleadings, either of the pretrial orders, or the Supreme Court when it remanded for a new trial.

Logically, the court should first determine whether the joinder of an action on the underlying debt with a foreclosure proceeding is permissible in this State. Our starting point must be R.R. 4:31-2 which provides in relevant part:

"Whenever a claim is one heretofore cognizable only after another claim has been prosecuted to a conclusion, then, except as provided by law relative to claims secured by a mortgage, the two claims may be joined in a single action; * * *." (Emphasis supplied)

The italicized portion of the above rule is given meaning by N.J.S. 2A:50-2, which sets forth the order of proceedings when both a bond and mortgage have been given for the same debt. This statute provides in relevant part:

"Where both a bond and a mortgage have been given for the same debt, all proceedings to ...


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