Case ID: ad_75/html/0418-01.html
Source: Caselaw Access Project
Author: {"author": "Vam Brunt, P. J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Morris Sternbach, as Administrator, etc., of Philip Sternbach, Deceased, Appellant, v. Yette Friedman, Respondent, Impleaded with Marcus Rosenthal and Others.
    Costs— award thereof where a defendant succeeds in establishing an offset to a mortgage instead, of its reformation, which she asks for — testimony of the plaintiff, when competent as an admission.
    
    Where one of the defendants in an action to foreclose a mortgage seeks to obtain a reformation of the mortgage upon the ground that it does not embody the; true agreement between the parties to it and is defeated on that claim,, hut does succeed in obtaining an adjudication that she is entitled to offset,, against her liability upon the bond and mortgage, the value of certain whisky certificates, and after the trial at Special Term a reference is ordered' to* determine the amount of the mortgage and the value of the whisky certificates, it is improper to award to such defendant the entire costs of the action;; the plaintiff should be allowed the costs up to and including' the trial at the-Special Term and the defendant should he awarded the balance.
    Testimony given by the plaintiff, on the trial at Special Term, concerning the-value of the whisky certificates, may he read in evidence by the defendant on the hearing before the referee as the admission or declaration of a party to the. action.
    Appeal by the plaintiff, Morris Sternbach, as administrator, etc.,, of Philip Sternbach, deceased, from so much of a judgment of the Supreme Court in favor of the plaintiff, bearing date the 19th-. day of August, 1901, and entered in the office of the clerk of the-county of New York, upon the report of a referee, as adjudges that the defendant Yette Friedman has been exonerated, to the extent of the value of certain whisky certificates on the 27th day of May, 1896, from her liability on or by virtue of the bond and mortgage mentioned in the said judgment, and further in so far as the said judgment adjudges and decrees that the said defendant Yette Friedman is entitled to credit on account of the amount due upon the said bond and mortgage for the value of the warehouse or whisky certificates as of the 27th day of May, 1896, in the sum of $9,561.52, and further in so far as the said judgment awards to the defendant Yette Friedman costs of the action against the plaintiff and from each and every part of the said judgment to the several extents aforesaid, with notice of an intention to bring up for review upon such appeal an order bearing date the 19th day of August, 1901, and entered in said clerk’s office, confirming the report of the referee and ordering that the defendant Yette Friedman recover of the plaintiff the costs and disbursements of the action.
    
      Emanuel J. Myers, for the appellant.
    
      Sarold Nathan, for the respondent.
   Vam Brunt, P. J.:

This is an appeal from a final judgment of foreclosure and sale, of mortgaged premises in the city of New York. The rights of the parties were declared and settled by this court on a former appeal (34 App. Div. 534). It was then held that the defendant Friedman was entitled to offset' against her liability upon the bond to which the mortgage was collateral, the value of certain whisky certificates, and that to the extent of the value of such certificates on the 27th day of May, 1896, she was exonerated from liability on or by virtue of the bond and mortgage. The mortgage was given by the defendant Friedman for indemnity to Philip Sternbach and the payment to him of $10,000 on the 29th of January, 1897, and for the prompt and punctual payment of the debts and liabilities of the firm of Rosenthal & Sternbach. It was directed by this court that the matter be referred to a referee to take proof and report to the court as to unpaid and outstanding debts, liabilities and obligations of the firm of Rosenthal & Sternbach of all and every kind, nature and description whatsoever" and any and all sums of money which the plaintiff had been or may be compelled to pay, lay out and expend by reason of the said copartnership affairs, and also to take proof and report to the court as to the value on the 27th day of May, 1896, of the said warehouse or whisky certificates, with the amount whereof the said defendant Yette Friedman is entitled to be credited on account of the amount due upon said bond and mortgage, as aforesaid. The referee proceeded to discharge the duty devolved upon him and made his report to the court, after which final judgment was entered conforming to the requirements of the decision of this court, as rendered on the former appeal. There is nothing, therefore, requiring consideration at the present, but the exceptions taken to the report of the referee and to certain rulings made by him in the progress of the proceeding before him.

It is claimed by the plaintiff (the appellant) that the referee misconstrued the purport, of the order of reference and incorrectly restricted the scope of the inquiry before him. It is urged that he should have considered the accounts of the partners of- the firm of Rosenthal & Sternbach and the drawings of money from the firm by the respective partners thereof. The referee did not err in his interpretation of the order. Nothing was referred to him, except to take proof and report the unpaid and outstanding debts and liabilities and obligations of the firm, and the value of the whisky certificates. As to the latter, there was no pretense that the defendant Friedman had any other security which could operate as an offset to the bond and mortgage. If there were other securities or indemnity in any other form to protect her against liability on the bond and mortgage, the facts should have been proven upon the trial.

Several exceptions are taken to rulings of the referee upon questions of evidence, but none of them presents a subject requiring consideration, unless it be one relating to the admission of part of the record of the original trial of the action at the Special Term. That record was produced, and from it counsel for the defendant offered to read from the evidence given by .Philip Sternbach, the plaintiff. That was objected to on the ground that it was incompetent, irrelevant and immaterial, and that the method pursued was not the proper way to authorize or justify the reading in evidence of parts of the printed case on appeal. The evidence of Philip Sternbach sought to be introduced by the defendant’s counsel related to his valuation of the whisky certificates and what he stated at the trial was evidence of an admission -or declaration on his part as to the value of those certificates. It was the admission or declaration of a party to the action and not of an independent witness on the question of value.

In the final judgment as entered, the award of costs is improperly made. It directs that from the proceeds of sale of the mortgaged premises there shall be first paid to the attorneys for the defendant Tette Friedman the sum of $1,744.68 and costs and disbursements of the action as adjusted by the clerk of the court, with interest from the date of judgment. -The defendant Friedman should not recover all the costs of the action. The plaintiff was entitled to foreclose the mortgage for as ‘much as was due thereon. The defendant did not succeed in avoiding the mortgage, but only in reducing it. Her original attitude in the action was that the mortgage should be reformed ; that it did not embody the true agreement of the parties to it. In that claim she was defeated; but it was adjudged ultimately that she was entitled to have a reduction made of the amount for which the plaintiff sought to enforce it. The plaintiff should be allowed the costs of the foreclosure action up to and including the trial at the Special Term and those costs should be deducted from the amount awarded to the defendant in the final judgment.

As thus modified, the judgment appealed from is affirmed; no costs of appeal. ■

Ingraham, Hatch and Lattghlin, JJ., concurred.

Judgment modified as directed in opinion, and as modified affirmed, without costs.