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110-112 Van Wagenen Avenue Co. v. Julian

Decided: June 6, 1968.


Gaulkin, Lewis and Kolovsky. The opinion of the court was delivered by Lewis, J.A.D. Kolovsky, J.A.D. (concurring in result).


Plaintiff's action to recover the amount due on a bond secured by a second real estate mortgage on property in Hudson County, whose lien had been extinguished by the foreclosure of a prior mortgage, was dismissed by the trial court on motion of defendants Julian.

The foreclosure sale took place on February 24, 1966. Plaintiff's suit was instituted on November 16, 1966, well within the time limit under N.J.S. 2 A:50-8. The trial court's decision was based on the fact that plaintiff had not

filed in the office of the Register of Hudson County, before suit was commenced, a written notice of the proposed action. The court held that such an antecedent notice was a prerequisite, under N.J.S. 2 A:50-10 (herein section 10), to plaintiff's right to maintain an action on its bond.

Plaintiff appeals, contending (1) its suit as a junior mortgagee for deficiency did not reopen the mortgagors' equity of redemption (N.J.S. 2 A:50-9) and, therefore, the section 10 notice served no conceivable purpose and should not be enforced, and (2) defendants are estopped by their conduct from asserting the provisions of that section as an affirmative defense. For reasons hereinafter stated we reverse.

Section 10 provides:

"No judgment shall be entered by confession or in any action upon any bond pursuant to section 2A:50-8 unless prior to the entry of the judgment, if by confession, or prior to the commencement of the action on the bond, if the proceeding be by action, there shall be filed and recorded in the office of the clerk or register of deeds and mortgages as the case may be, of the county, in which the mortgaged premises are situate, a written notice to the same effect and in the same manner as is required by sections 2A:50-6 and 2A:50-7 of this title."

The aforementioned sections 6 and 7 deal with suits for deficiencies by mortgagees who have foreclosed their mortgages. The former section mandates the filing of a notice of intention before a foreclosing mortgagee may sue on a bond for a secured debt, and the latter section provides for the recording of filed notices. They promote an important function because a deficiency judgment upon a bond secured by a mortgage which has been foreclosed reopens the foreclosure and gives the mortgagor six months within which to redeem the property. N.J.S. 2 A:50-4. The basic underlying purpose of sections 6 and 7 (originally enacted as L. 1907, c. 231) is to stabilize titles to mortgaged lands purchased under foreclosure sales. Neu v. Rogge, 88 N.J.L. 335, 339-340 (E. & A. 1915); O'Connor v. Briscoe, 119 N.J.L. 362, 365 (E. & A. 1938). As the Rogge court pointed out, the clear

legislative intent was to provide, through the means of a public record, a method "to make secure the title to a purchaser of mortgaged lands which had been foreclosed * * * and which were subject to redemption * * *" (at p. 339). In O'Connor the required filing of a lis pendens under section 6 (then section 51 of the Mortgage Act, 3 C.S., p. 3423) was held to be mandatory since "it declares a public policy for the conservation and protection of the public records relating to the title to lands."

The ratio decidendi of those cases, however, is inapplicable to situations embraced by sections 8, 9 and 10, which were adopted in 1942 (L. 1942, c 172, §§ 1, 2 and 3). Section 8 deals with actions on a bond where the mortgage lien has been extinguished by foreclosure of a prior mortgage, and requires the action to be commenced within one year after the sale of the property or confirmation thereof. Section 9 provides specifically that the proceedings "shall not open the foreclosure and sale of the mortgaged premises or result in any right of redemption." When the legislative history of the various sections of the statute dealing with proceedings upon mortgage bonds is analyzed and the statutory language construed in pari materia "to effectuate general legislative policy" (State v. Wean, 86 N.J. Super. 283, 289 (App. Div. 1965)), there appears to be no basis in history, public purpose or meaningful function for the existence or enforcement of the notice requirement of section 10. That section relates to proceedings by a junior lienor whose security has been extinguished, and no one is affected by the outcome of the suit on the bond other than the parties themselves. Indeed, in the instant matter, the litigants conceded that the notice requirement serves no conceivable purpose.

The only reasonable deduction is that the inclusion of section 10 in the 1942 enactment was the product of mistake or inadvertence by the Legislature in paraphrasing sections 6 and 7 which had been on the statute books since 1907. Accordingly, plaintiff argues that section 10 should be declared a nullity.

There is ample authority for the proposition that statutory interpretive technique permits the deletion and disregard of legislative language when the rejection thereof is essential to reach and carry out the purpose of the Legislature.

Professor Llewellyn, in his "Remarks on the Theory of Appellate Decision and the Rules or Canons About How Statutes Are to be Construed," 3 Van. L. Rev. 395, 404 (1950), observed that the thrust of "Every word and clause must be given effect," is parried by an equally important rubric, "If inadvertently inserted or if repugnant to the rest of the statute, they may be rejected as surplusage." Stated differently:

"While, as a general rule, every word in a statute is to be given force and effect, * * * unnecessary words or clauses, words inadvertently or mistakenly used, words to which no meaning at all can be attached, or words having no meaning in harmony with the legislative intent as collected from the entire act will be treated as surplusage, and will be wholly disregarded in the construction of the act in order to effectuate the legislative intent." 82 C.J.S. Statutes § 343, pp. 687-688 (1953).

Many interpretive decisions have recognized and invoked that principle of statutory construction, including Brotherhood of R.R. Trainmen v. Central R.R. of N.J., 47 N.J. 508, 517-518 (1966) (section of prior enactment inadvertently repealed by subsequent act); Schierstead v. City of Brigantine, 29 N.J. 220, 230-231 (1959) (absurd consequences from the literal reading of a statute are to be avoided); Westinghouse Electric Corp. v. United Electrical, etc., 139 N.J. Eq. 97, 105 (E. & A. 1946) (subsection of Anti-Injunction Act declaring other subsections to be lawful was mere surplusage); Perry v. Commerce Loan Co., 383 U.S. 392, 400-401, 86 S. Ct. 852, 15 L. Ed. 2 d 827, 833-834 (1966) (incorporation of section of Bankruptcy Act among prerequisites for confirmation of wage-earner extension plan was legislative oversight); Baltimore Lumber Company v. Marcus, 208 F. Supp. 852, 858 (D. Md. 1962)

(clause tending to nullify coverage of statute should be omitted); American Federation of Labor v. Mann, 188 S.W. 2 d 276, 282 (Tex Civ. App. 1945) (express and inclusive language of subsequent section of Labor Act made preceding section mere surplusage); Arkansas Oak Flooring Co. v. Louisiana & Arkansas Ry. Co., 166 F.2d 98, 101 (5 Cir. 1948), certiorari denied 334 U.S. 828, 68 S. Ct. 1338, 92 L. Ed. 1756 (1948) (a clause need not be applied literally or at all if such application would provide a result contrary to the primary purpose of the statute); Mason v. Bowerman Bros., Inc., 95 R.I. 425, 187 A. 2 d 772, 776-777 (Sup. Ct. 1963 (phrase giving irrational meaning to statute excluded); Pressman v. State Tax Commission, 204 Md. 78, 102 A. 2 d 821, 827-828 (Ct. App. 1954) (phrase inadvertently retained in amended statute). See, generally, Llewellyn, The Common Law Tradition: Deciding Appeals 374 (1960); 2 Sutherland, Statutory Construction (3 d ed. Horack 1943), § 4926, pp. 462-466.

While there is no doubt that under proper circumstances we may disregard words or portions of a statute, we find no New Jersey case in which an entire section of a statute, plain and unambiguous on its face, has been nullified upon the ground that it is useless and was adopted by inadvertence or mistake. However, it is unnecessary to decide now whether we should go that far for we are satisfied that plaintiff substantially complied with the underlying objectives of the 1942 legislation and that defendants are estopped from raising the defense of failure to file a section 10 notice. Parenthetically, we pause to suggest that that section and other provisions of the statute deserve prompt ...

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