237 A.D. 535 | N.Y. App. Div. | 1933
The action is brought for the foreclosure of a mortgage. The complaint is in the usual form. The sixth para
“ Third. That such extension agreement was in fact made between the plaintiff and the individual defendants Jacob Bakrat and Dora Bakrat, his wife, but in form only, said extension agreement was made through Jacob Bakrat, Inc., a corporation formed for the sole purpose of attempting to evade the provisions of the General Business Law of the State of New York.
“ Fourth. That by reason of the premises, said bond, mortgage and extension agreement upon which this action is based are void and unenforceable for the reason that it is [sic] based on an -unlawful and usurious rate of interest.”
Plaintiff moved for judgment on the pleadings “ on the ground that the denial contained in the answers of defendants Simon Bachrach, Jacob Bakrat and Jacob Bakrat, Inc., is sham,” and further, “ on the ground that the matter alleged in said answers does not constitute a defense.”
In her moving affidavit plaintiff states her ownership of the bond and mortgage and the failure of the defendants to pay the principal and interest on March 20, 1932, and the present indebtedness to the plaintiff of the principal sum, claiming further that the denial of these facts as set forth in paragraph “ sixth ” of the complaint “ is a mere pretense, interposed in bad faith and without color of fact,” and that “ none of said defendants affirmatively pleaded the defense of payment.”
Under the authority of Fleischer v. Terker (259 N. Y. 60), the denial may not be regarded as sham on mere inspection, and that “ If it is to be disposed of on motion, its falsity must be determined by affidavits.”
It was the view of the learned Special Term that the defense of usury presented a triable issue, and a distinction was drawn by the learned justice between the case at bar and Jenkins v. Moyse (254 N. Y. 319), in which cited case the defendant refused to lend to the individual and told him to organize a corporation if he wanted the loan, whereas, in the case at bar, the plaintiff stated what the excerpt from the affidavit shows. He held that “ In the Jenkins case the corporation was formed expressly to make the loan,” while here “ the corporation was formed to conceal the loan agreed to be made to the individual.”
The facts establish that defendant Gallatin Improvement Co., Inc., on December 10, 1923, made the bond and mortgage to one Barad who, on March 20, 1929, assigned the same to plaintiff; that on August 5, 1924, said Gallatin Improvement Co., Inc., conveyed the premises to defendant Jacob Bakrat; that on March 19, 1929, Jacob Bakrat conveyed the premises to Jacob Bakrat, Inc.; that on February 28, 1930, Jacob Bakrat, Inc., conveyed to defendant Jacob Bakrat; that on June 15, 1931, Jacob Bakrat conveyed to Abraham Goldman; and on February 11,1932, Goldman conveyed the premises to defendant Simon Bachrach.
No claim for deficiency is made against any defendant other than Gallatin Improvement Co., Inc., and Jacob Bakrat, Inc.
Defendant Gallatin Improvement Co., Inc., defaulted; and it is not questioned that defendant Jacob Bakrat, Inc., cannot interpose the defense of usury. That the mortgage was valid in its
In Hartley v. Harrison (24 N. Y. 170, 171) it was written: “ The law is well settled in this State that the purchaser who takes a conveyance of the premises from the mortgagor, subject to the hen and payment of a mortgage, cannot set up the defense of usury against such mortgage and thus obtain an interest in the land which the mortgagor never agreed or intended to transfer to him. (Post v. Dart, 8 Paige, 641; Shufelt v. Shufelt, 9 Paige, 145; Cole v. Savage, 10 Paige, 591; Ferris v. Crawford, 2 Denio, 598; Morris v. Floyd, 5 Barb. 130; Sands v. Church, 2 Seld. 347.) The principle upon which these proceed is, that the mortgagor may, if he thinks proper to do so, waive the usury and elect to affirm the mortgage by selling and conveying his property subject to the hen and payment of such mortgage, and the purchaser, in that case, takes the equity of redemption merely and cannot question the validity of the mortgage on ground of usury.” (See, also, discussion and cases cited in Hatch v. Baker, 139 Misc. 717.)
The order denying the motion for judgment on the pleadings
Lazansky, P. J., Hagarty, Scudder and Davis, JJ., concur.
Order denying motion for judgment on the pleadings reversed on the law and the facts, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.