Priest v. Gumprecht

80 N.Y.S. 759 | N.Y. App. Div. | 1903

O’BRIEN, J.

The principal issue litigated upon the trial and presented for our consideration upon this appeal is whether the first mortgage was due at the time this action was begun.

It is undisputed that a written agreement had been given to the Steins by the plaintiff which in terms extended the mortgage to August 5, 1903, and, were there nothing more in this record than that agreement, the plaintiff would undoubtedly, under its terms, have been bound by the extension granted. It is always competent, however, to inquire into the consideration of a contract; and such inquiry resulted in this case in a finding, which is supported by the evidence, that the agreement of extension was “given to save, if possible, the foreclosure of the said second mortgage held by the defendant Gumprecht, who had already brought an action to foreclose the said second mortgage, through Benjamin & Loeser, Esqrs., her attorneys”; and that “there was no other consideration to support said extension of mortgage.”

The evidence upon which these findings are based shows that, after the action to foreclose the second mortgage had been commenced, Mr. Benjamin, as attorney representing the Steins, appealed to the plaintiff to grant the extension, in order, if possible, to prevent the foreclosure of the second mortgage; and it was for that purpose solely that the extension was given. The fact of the extension was interposed as a defense in the action to foreclose the second mortgage, but it was held by the court to be unavailable, for the reason that the extension was obtained too late, and for the further reason that the guarantor of the second mortgage, unless the proceedings were sustained, would be released. A decree of foreclosure was accordingly entered in that action. No appeal having been taken, and the parties being bound by that decree, it follows that the purpose and end for which the extension was given, and the entire consideration which moved this plaintiff to give it, failed; and therefore the agreement itself also failed.

The appellant further urges, however, that this action was prematurely brought because, at the time, no interest on the first mortgage was then due. The facts bearing upon this contention show that in payment of interest up to February 5, 1901, the plaintiff received from the Steins $225 in cash and a note for $200. Had the entire payment been in cash, then clearly the next interest would not have been payable until August, 1901, and as this action was commenced May 20, 1901, there would be a foundation for the claim that it was prematurely brought. The receipt given for the interest shows, however, that what was received was, as stated, $225 in cash and a note for $200; which note, when due, prior to the commencement of this action, was not paid. Though conceding the right of the plaintiff to require that the entire interest should be paid in cash, and admitting that the mere receipt and acceptance of the note, conditionally on its being paid, did not act as a payment, and that on such note becoming due and not being paid the plaintiff was at liberty to resort to his rights under the mortgage, the defendants insist that the conduct of the plaintiff and the representations made by him and the attorney, Mr. Decker, were such that the plaintiff is estopped as against Freeman, who was the purchaser on the sale, from claiming that the interest was not paid.

It will be found, however, upon an examination, that this plea of estoppel is not supported. It is true that in the Gumprecht action the plaintiff was questioned as to the date up to which the interest was paid, and that he did state that it was paid up to February 5, 19019 but it appears that, owing to an objection made to his going into the circumstances concerning the payment, he was prevented from giving the facts connected with such payment. In no sense, therefore, can his testimony be regarded as a declaration or a representation which is binding upon him, because he was not permitted to state fully the facts in connection with the payment.

The additional ground upon which the estoppel is urged is that, when it became necessary to prepare the terms of the sale in the foreclosure action on the second mortgage, an inquiry was made of Mr. Decker as to the time up to which interest was paid on the first mortgage, and as to how much was due thereon for principal and interest, and in answer to such inquiry Mr. Decker stated that it was paid up to February 5, 1901. The letter containing this statement shows, what appears from the other evidence, that this information was obtained by Mr. Decker from the Steins, whom he represented as attorney in that action, and not from this plaintiff.

Apart, however, from these statements, which were brought to the knowledge of Mr. Benjamin, who acted for Valentine Gumprecht in the foreclosure of her mortgage, and for Freeman, who was the purchaser on the sale, it appears without contradiction that, immediately prior to the sale, and on the date thereof — which was the same date that this action was commenced — both Benjamin and Freeman knew of its commencement, and had either actual notice, or by reason of its commencement were bound to take notice, of the plaintiff’s claim, not only that the principal, but that some part of the interest up to February 5, 1901, was due and unpaid.

The whole theory of estoppel, therefore, falls to the ground as completely as did the alleged consideration for the extension agreement, and, as there was no legal obstacle in the way of foreclosing the mortgage, the plaintiff was not prevented or estopped from proceeding. The conclusion of the learned judge at Special Term that this action was not prematurely brought is therefore supported, and it accordingly follows that the judgment appealed from should be affirmed, with costs. All concur.