Case ID: ad_121/html/0507-01.html
Source: Caselaw Access Project
Author: {"author": "Woodward, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Harbor and Suburban Building and Savings Association, Appellant, v. George T. Wood and Others, Respondents.
    Second Department,
    October 11, 1907.
    Mortgage — building loan -association—foreclosure — erroneous dismissal of complaint.
    The foreclosure’of a. building loan mortgage payable on installments should’not be denied on the mortgagor’s default because there is a possibility that the loan association may not be able to mature the building loan stock when the payments are completed; especially so when the issue is not raised by the defendant and there is no proof that the pl&inti£E cannot perform its contract.
    Rich, J., dissented.
    Appeal by the' plaintiff, the Harbor and Suburban Building ■and Savings Association, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of Kings on the 23d day of July, 1906, upon the decision, of the court rendered after a trial at the Kings County Special Term dismissing the complaint and canceling • of record a ..certain bond and mortgage.
    
      Alexander S. Bacon [Morton Stein with him ón the brief], for the .appellant.
    
      Samuel Leavitt, for the respondents Wood.
   Woodward, J.:

This "action was brought to foreclose a building and loan gross premium mortgage, drawn'in the usual form. The defendant Wood and' his wife sold the premises to a man named Mittnacht, the latter acting through one Rebecca Fitzgerald, and no payments were made after .the sale to ifittnaclit. By-the' -t,errns of this mortgage, as understood ' by both the plaintiff and defendant, as showm by the. pleadings and by the évidence upon the 'trial, the plaintiff was to convey tlié premises to the defendants Wood free and clear of all incumbrances, including an underlying mortgage for $1,8.00, upon the payment of 144 payments -of $25.70 each. There is absolutely no dispute upon this proposition, and there is no question that" the defendants 'were in default when this action was brought, but the learned court seemed to regard these matters of only incidental importance, and held that because there was the- possibility that the plaintiff might not be able to mature the building loan stock upon the payment of. the 144 payments of $25.70 each, the defendants were in some manner overreached, .and gave a judgment in favor of 'the defendants.

We .are unable to understand how this result could be reached consistently with the law. The defendants- Wood, who. alone contest the foreclosure, entered, into, the usual; contract with the. plaintiff for k building loan, to be repaid upon the installment plan ; it was ' specifically agreed that the. bond and mortgage should become void and of no effect on the completion of the' payments which the defendants agreed to make, and the learned court-lias -found that the jplaintiff fulfilled■ all of. its part of the agreement up to the time, óf the commencement of the action, and the plaintiff offered upon the trial to permit of the entry.of a judgment in • accordance with the language and the understanding of both parties. The learned court refused to find any of the alleged fraudulent matters charged against the plaintiff, but upon the proposition that the .plaintiff might not be able to complete its contract dt the-end- of , 144 payments, the decree of the court refuses relief to the "plaintiff; • This-issue was-not raised by the defendants ; "all that they ' claimed was that the loan - which they -sought was only '$2,.570.50, and that 144'payments of $25.70 each would exceed'this amount, ánd that as to this they had been deceived.' They do not claim ' that they were not told plainly of the number-of payments or of the amount of each, or. that.they were incapable of making the-calcula-, t-ion, or that any. advantage was. taken of them in the suppression of" these facts, but they claim that they did not become members of the association, and that'-they did not know that they were -giving a premium upon the loan. But upon all of these matters the court has found against them, and properly, under the evidence, and it was .the court which discovered and brought into this case the idea that the defendants were not hound by their agreement because of the possibility of the plaintiff not being able to carry out its contract.

A sufficient answer to this would seem to be that the plaintiff had performed all of its promises up to the time of the defendants’ default, and there is no presumption that a corporation or an individual will not perform its lawful contracts. There is no evidence in-this case that the plaintiff, cannot perform .its contract; nothing to show that'it may not lawfully do so, and with the defendants in default, after a partial performance óf the conditions of the contract, we are unable to understand why the plaintiff is not entitled to the relief demanded in the complaint. We talce it that the plaintiff had a right to make the contract that was made;, it is the same in its essential elements, as hundreds of these building loan contracts which' have never been challenged, and when both parties agree to their understanding of the contract, and when this understanding is in harmony with the language used, and this contract undertook to place the defendants in full'ownership of the premises upon thé payment of the stated number of installments, at $25.70 each, wé know of no rule, of law Which permits the court to assume that the plaintiff might not be able to perform its phrt of the contract some years hence, and to refuse a remedy where the defendants are concededly in default. We think the court erred in this regard, and that the judgment should be reversed.

The judgment appealed from should he reversed and a new trial. granted, costs to abide the final award of costs.

Hirschberg, P. J., Hooker and Gaynor, JJ., concurred; High, J., dissented.

Judgment reversed and ■ new trial granted, costs to abide the final'award of costs. ' '■