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Capabianco v. Bork

Decided: February 2, 1970.

VITO CAPABIANCO AND JULIA CAPABIANCO, HIS WIFE, PLAINTIFFS-RESPONDENTS,
v.
JOHN L. BORK AND JOSEPHINE M. BORK, HIS WIFE, AND THE UNITED STATES OF AMERICA, DEFENDANTS-APPELLANTS



Goldmann, Lewis and Matthews. The opinion of the court was delivered by Goldmann, P.J.A.D. Lewis, J.A.D. (dissenting).

Goldmann

Plaintiffs brought an action for partition, and defendants counterclaimed for subrogation to the rights of a prior mortgage and for strict foreclosure. Plaintiffs subsequently informed the trial judge that they would not participate in the case or oppose dismissal of their complaint.

The final judgment subrogated defendants to the rights of the First Federal Savings & Loan Ass'n of Clearwater, Florida, under a mortgage dated June 14 and recorded June 16, 1961, thereby entitling them to priority over the rights of plaintiff Vito Capabianco under a judgment he had recovered against one George Fink on September 25, 1961,

and also to priority over all rights conveyed to Capabianco by sheriff's deed dated February 3, 1967 following an execution sale under that judgment, including priority over any dower rights of Mrs. Capabianco. The subrogation granted was in the amount of $10,473.45, with 5 1/4% interest from March 2, 1966. The judgment declared the interest of defendant Federal National Mortgage Ass'n (FNMA) to be 100% of the debt, its interest being transferred to defendants Bork in proportion to and at the times that their principal payments on the $12,500 mortgage they had given on March 2, 1966, and then held by FNMA, reduced the mortgage principal below $10,473.45. Counterclaimants' request for strict foreclosure of the 1961 mortgage to which they had been subrogated was denied.

The facts are succinctly set out in the trial judge's opinion reported in 106 N.J. Super. 429, at 430-432, and because of their length are not repeated here. Reference may also be made to the facts in a prior suit, First Federal Savings & Loan Ass'n of Clearwater, Fla. v. Fink , 99 N.J. Super. 76, 77-81 (Ch. Div. 1968), wherein the substituted plaintiff, assignee of the 1961 mortgage, was held not entitled to summary judgment of foreclosure as against the Capabiances, and the latter's motion for summary judgment dismissing the action was granted.

We agree with the trial judge's determination that FNMA was entitled to be subrogated to the rights of First Federal Savings & Loan Ass'n under the 1961 mortgage, and the Borks to subrogation under that mortgage to the extent of their payments of principal to FNMA.

In denying strict foreclosure the trial judge relied on Sears, Roebuck & Co. v. Camp , 124 N.J. Eq. 403, 118 A.L.R. 762 (E. & A. 1938), and quoted the following:

Yet strict foreclosure is still an appropriate remedy where, in the special circumstances, it will subserve equity and justice. This is particularly the case where, through the customary foreclosure by judicial sale or a conveyance by the mortgagor, the legal and equitable estates have become united in the mortgagee, who is also in possession under his legal title, and some outstanding junior interest has not,

by reason of pure inadvertence, not aggravated by bad faith, been barred by the decree. Such is the established practice in this State. [at 409]

There having been no foreclosure judgment, no mortgagee in possession, and no joinder of the legal and equitable estates in either the Borks or FNMA, strict foreclosure was held to be ...


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