110 Misc. 41 | N.Y. Sup. Ct. | 1920
Motion by plaintiff for judgment on the pleadings.
The action is for the foreclosure of a mortgage executed by the defendant Tangier Hotel Co., Inc., to secure the payment of $25,000 to the defendant Warner Moore, or his assigns, on February 20, 1920. The amended complaint alleges that the plaintiff acquired an interest in the said bond and mortgage to the extent of $11,000 of the principal sum thereof through mesne assignments from the defendant-mortgagee, Moore;
The only defendant appearing is Warner Moore, the mortgagee and assignor, who demurs to the complaint on the ground that it does not state facts sufficient to constitute a cause of action, and the plaintiff now moves for judgment on the pleadings.
The defendant Moore contends that, it appearing on the face of the complaint that there are two owners of the bond and mortgage — the plaintiff and himself — and that, when plaintiff elected to declare due and payable the whole principal sum of said, bond and mortgage, such sum had not become due according to its terms, except by reason of a breach of the condition as to payment of interest and taxes, the plaintiff alone could not so elect, but that Moore must join in the election.
The plaintiff argues that the assignment to him being absolute as to the $11,000 interest, he had the right, after Moore’s refusal to join therein, to elect alone to declare the bond and mortgage immediately due.
It seems to be the settled law, and as I understand plaintiff’s argument it is conceded, that if a bond and mortgage are owned by two persons jointly one can
It seems clear to me that the assignment under which plaintiff claims being only pro tanto the assignor and assignee are in equity joint owners of the bond and mortgage and the election could not be made by the assignee alone; the assignor had to join with him. Shaw v. Wellman; Cresco Realty Co. v. Clark, supra.
The question here involved is discussed in the Shato case where Justice Daniels, writing for the court, says: “ without the authority or concurrence of the assignee, and without ascertaining whether he deemed it for his interest that advantage should be taken of this clause in the mortgage, the plaintiff declared the debt to be due. The right to do this was equally for the benefit of the entire debt. It was an entirety consisting of an option affecting the whole debt secured, and not a part of it. To take advantage of it was an authority vested in the owners of the debt, not in a portion of it. And as long as the assignee did not assent to the exercise of the option, the term of credit was not forfeited or lost by the act alone of the assignor.”
Plaintiff’s counsel argues that the case at bar is distinguishable from the Shaw case in that there ownership was joint and the plaintiff had assigned four-fifths of the debt to another as collateral security, while in the instant case the assignment was absolute. I cannot agree with counsel on this point. It seems clear to me that the defendant Moore and plaintiff are joint owners. In the cases which refer to absolute assignments as giving the right to the assignee to elect as in this case, the whole mortgage debt was assigned and it is settled law that in such cases the assignee is
Counsel for plaintiff also urges that the ease of Corporate Investing Co. v. Oracehull Realty Co., supra, is an authority for his contention. A casual reading of the opinion in that ease convinces me that it turned upon the agreement made between the assignor and assignee at the time of the assignment and that had there been no such separate -agreement the result there would have been different. In the case at bar no separate agreement is alleged nor does it appear from the complaint that there was one, and in the absence of an agreement authorizing the assignee to elect, as has been attempted here, no authority is in him to do so. So also in the case of Thomas v. Zahka, 181 App. Div. 173, a participation agreement reciting prior ownership, etc., was entered into and that takes it out of the rule applicable to the case at bar.
If I am correct in my views, it follows that the motion must be denied.
Motion denied, with ten dollars costs, and demurrer sustained, with leave to plaintiff to serve an amended complaint within twenty days.
Ordered accordingly.