Case ID: ad_167/html/0666-01.html
Source: Caselaw Access Project
Author: {"author": "Hotchkiss, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Barney Goldman, Respondent, v. Max Cohen and Esther Cohen, Appellants.
    First Department,
    May 7, 1915.
    Contract — agreement to reimburse holder of mortgage for moneys expended if he would not attend and protect his interests on sale under foreclosure of another mortgage — evidence — Statute of Frauds — judgment modified.
    An owner of premises transferred them to an improvement company and took back a purchase-money mortgage, subject to two prior mortgages, and agreed to make the company a building loan, but having insufficient money to make the loan, procured one C.' to make the same, and assigned to G.’s nominee the building loan mortgage and agreement, and guaranteed the payment of this mortgage, and also agreed to subordinate his mortgage to the loan for advances to be made under the building loan mortgage. After the building operations had been commenced, and G. had advanced money on the building loan, the holder of the second mortgage began foreclosure. On the day on which the foreclosure sale was advertised to take place G. orally agreed with the transferror that if he would not attend and bid at the sale, or otherwise attempt to protect his interest, if 0. or his nominee should become the purchaser, he (0.) would reimburse the transferror for the moneys he had expended, and would also pay lumber claims for which he was liable, and would give him a one-third interest in the fee of the premises, subject to the first two mortgages, and to the reasonable cost of the completed building. The property was hid in by O.’s nominee and transferred without consideration to G.’s wife.
    In an action by the transferror to enforce the agreement with C., evidence held sufficient to sustain a judgment in favor of the plaintiff.
    The plaintiff has no right, however, to compel the defendant to buy his interest in the premises or to compel a sale of the premises in the action, and the judgment should be modified in these respects.
    As it did not appear from the complaint whether the agreement was oral or in writing, and the answer did not plead the Statute of Frauds, and no objection on that ground was taken at the trial, the defense is not available on appeal. But even if the statute had been pleaded, it would not have been applicable under the circumstances.
    Ingraham, P. J., dissented.
    Appeal by the defendants, Max Cohen and another, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Bronx on the 4th day of January, 1915, upon the decision of the court after a trial at the Bronx Special Term.
    
      The judgment adjudicated a lien upon premises described in the complaint and appointed a referee to ascertain the amount of plaintiff’s interest in and lien upon such premises.
    
      Edward Kaufmann, for the appellants.
    
      William Kaufman, for the respondent.
   Hotchkiss, J.:

On and prior to December 29, 1911, plaintiff was the owner of the fee of the premises in question. He subsequently sold to an improvement company and took back a purchase-money mortgage for $12,000 subject to two prior mortgages amounting to $11,500. He also agreed to make the company a building loan of upwards of $35,000. Having insufficient moneys to make the loan, he procured defendant Max Cohen to agree to make it, and plaintiff assigned to Jenny Freeman, Cohen’s nominee, the building loan mortgage and agreement, at the same time guaranteeing payment of this mortgage. He also agreed to subordinate his $12,000 mortgage to the lien for advances to be made under the building loan mortgage. Building operations were subsequently commenced, and while in progress the holder of the second mortgage began foreclosure, to which action plaintiff, Freeman, and the improvement company were parties. At the time this foreclosure action was commenced, Max Cohen had advanced $10,500 on the building loan. In pursuance of the judgment of foreclosure the premises were advertised for sale on the 29th of December, 1911, prior to which time and during the progress of the building operation plaintiff had expended certain moneys on account of the premises and had also guaranteed certain lumber claims. Early in the morning of the day on which the sale was advertised to take place, Cohen orally agreed with plaintiff that if plaintiff would not attend and bid at the sale or otherwise attempt to protect his interests, if Cohen or his nominee should become the purchaser, he (Cohen) would reimburse plaintiff for the moneys he had expended, and would also pay the lumber claims for which plaintiff was liable, and would give plaintiff a one-third interest in the fee of the premises, subject to the first two mortgages and to the reasonable cost of the completed building. As attorney for Cohen, Freeman attended the sale and bid in the property. Freeman received the referee’s deed, and at Cohen’s request and without consideration conveyed the premises to the defendant Esther, Cohen’s wife. After the sale Cohen repudiated his agreement with plaintiff, which agreement by the judgment appealed from he has been decreed to carry out. That the findings of fact on which the judgment rests are amply sustained by the evidence cannot be seriously disputed. Nor was the agreement relied on void as against public policy. (Hopkins v. Ensign, 122 N. Y. 144.) From the complaint it did not appear whether the agreement was oral or in writing. The answer did not plead the Statute of Frauds, and no objection on that ground was taken at the trial. The defense is not now available. (Matthews v. Matthews, 154 N. Y. 288; Dearing v. McKinnon Dash & Hardware Co., 165 id. 18.) But even if the statute had been pleaded, it would not have been applicable to the facts of the case. (Ryan v.Dox, 34 N. Y. 307; Congregation Kehal Adath v. Universal Building & Const. Co., 134 App. Div. 368.)

Objection is made, however, to the form of the judgment, which expressly finds the amount of the lumber claims and directs cancellation of the assignments thereof which Cohen had taken to himself; also that plaintiff recover the amount he expended in payment of the several items for which Cohen had promised to reimburse him. It also adjudges plaintiff entitled to a one-third interest in the fee, subject to the several mortgages, including the reasonable cost of the completed building. The judgment also appoints a referee to ascertain the said amounts and also what may be due to plaintiff on account of his' one-third interest in the net income derived by Cohen from the premises subsequent to their completion. It then provides that the referee shall ascertain “what the value of this plaintiff’s interest in said premises is,” and by the final judgment to be hereafter entered, in the event defendant Cohen does not pay plaintiff the value of his interest, that the premises be sold, etc. What the value of the plaintiff’s one-third interest in the premises may be is immaterial. The plaintiff has no right to compel the defendant to buy his interest in the premises, or to compel a sale of the premises in this action, and the judgment must be modified in these respects. The order to be entered hereon should be as follows: Decision modified by striking therefrom at folio 62 in the direction for judgment the words “ and what the value of this plaintiff’s interest in said premises is; ” and also the words beginning with and the final judgment ” in folio 63, to and including the words by the said defendant ” in folio 64.

Judgment modified by striking therefrom the words “ and what the value of this plaintiff’s interest in said premises is ” at folio 74, and the entire paragraph beginning with the words “ ordered and adjudged” in folio 76, down to the end thereof, and as so modified the judgment should be affirmed, without costs.

McLaughlin, Clarke and Scott, JJ., concurred; Ingraham, P. J., dissented.

Judgment modified as directed in opinion, and as modified affirmed, without costs. Order to be settled on notice.