Case Name: Julius Weinman, Respondent, v. Michael Salit, Appellant
Court: New York Supreme Court, Appellate Term
Jurisdiction: New York
Decision Date: 1914-05
Citations: 85 Misc. 456
Docket Number: 
Parties: Julius Weinman, Respondent, v. Michael Salit, Appellant.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 85
Pages: 456–460

Head Matter:
Julius Weinman, Respondent, v. Michael Salit, Appellant.
(Supreme Court, Appellate Term, Second Department,
May, 1914.)
Mortgages — action to foreclose second mortgage — separate and distinct defense relating to advancement due on first mortgage — default of third mortgagee on trial.
A second mortgagee sent for plaintiff, the third mortgagee, and the owner of the premises and stated to them that $680 due for taxes and interest on the first mortgage must be paid, and agreed to advance $480 thereof, and plaintiff agreed to advance the remainder. It was arranged between them that the owner of the premises should pay the rents every month to the second mortgagee until the amount advanced by him was repaid, and then to plaintiff until the amount advanced by him had been repaid, the second mortgagee agreeing not to ask for any payment on his mortgage until plaintiff had been repaid by the rents. Later and under the same arrangements plaintiff advanced the further sum of $170 to pay interest on the first mortgage at which time the second mortgagee stated that the rents of the property had reduced his $480 to $46, and that after he had taken out the next month’s rent the owner of the equity would pay the succeeding month’s rent to plaintiff and that he, the second mortgagee, would ask for no money on his mortgage until the rents had been repaid to plaintiff in the amount he had advanced. In an action to foreclose the second mortgage, the third mortgagee set up as a separate and distinct defense the facts relating to his advancement of $170' due on the first mortgage and the agreement of plaintiff in said action to make no claim under his mortgage until said defendant was repaid the instalments due from the owner of the premises. The third mortgagee having defaulted on the trial, the property was sold to plaintiff in the action for $2,000 over and above the amount of his mortgage. In an action brought by the third mortgagee against the second mortgagee to recover the $370 advanced to keep alive the first mortgage, plaintiff recovered judgment for the full amount though it nowhere ap- ' peared that defendant ever promised to pay plaintiff said amount. On appeal from said judgment, held, that plaintiff, having failed to plead in the foreclosure action the facts relating to the $370 or to litigate them in said action, was barred from maintaining the present action upon the agreement theretofore made.
Appeal by defendant from a judgment of the Municipal Court of the city of New York, borough of Brooklyn, seventh district.
Ralph K. Jacobs, for appellant.
Barnett E. Kopelman, for respondent.

Opinion:
Crane, J.
One Fiege Flashenberg was the owner of 676 Rockaway avenue on which there were three mortgages, the first held by the Title Guarantee and Trust Company, second, a mortgage of $2,600, held by the defendant, Michael Salit, and a third of $1,000 held by the plaintiff, Julius Weinman.
In November of 1909 there was $680 due for taxes and interest upon the first mortgage. Salit, the second mortgagee, sent for the owner and the third mortgagee and stated that this amount must be paid. He agreed to advance $480 for the purpose and Weinman agreed to advance the remaining $200. The agreement between the parties appears to have been that Mrs. Flashenberg would pay the rents every month to Salit until the $480 advanced by him was repaid, and that then she would pay the rents to Weinman until his $200 was repaid. Salit further agreed that he would not ask for any money on his second mortgage until Weinman had been repaid by the rents.
Later, and in May of 1910, there was $170 interest due on the .first mortgage, and Weinman and Mrs. Flashenberg were again called to Salit's office. Under the same agreement or arrangement between them Weinman advanced $170 to pay the interest. It was then stated by Salit to them that the rents of the property had reduced his $480 to $46 and that after he had taken the June rent the owner of the equity would pay the July rent to Weinman and that he, Salit, would ask for no money on his mortgage until the rents from the property had repaid to Weinman the $370 that he had advanced. Mrs. Flashenberg testifies that in this interview Salit distinctly told her to pay the rents after June to Weinman until the $370 was repaid.
This money advanced by Weinman was paid directly to Salit, who applied it to the taxes and interest due on the first mortgage.
Two weeks after this last interview Salit commenced an action to-foreclose his mortgage, making Flashenberg and Weinman-parties thereto. Weinman served ' an answer in that action in which he set up as a separate and distinct defense the facts relating to his advancement of $170 to cover the interest due upon the first mortgage, and the agreement of the plaintiff, Salit, to make no claim under his mortgage until he, Weinman, was repaid the instalments due from the defendant, Flashenberg. The defendant, Weinman, having defaulted upon the trial, the court found that there was $2,600 due Salit, the amount of the mortgage, and decreed a sale which was carried out by the property being sold to Salit in May of 1911 for $2,000 over and above the first mortgage.
Weinman has now brought this action to recover the $370 advanced to Salit upon the above state of facts, and after a trial before a jury has received a judgment for that amount, with costs and disbursements.
Besides a general denial pleaded by the defendant, it is claimed that the judgment in the foreclosure action is res adjudicata as to the plaintiff's claim, and, therefore, a bar to his recovery.
If Weinman's agreement was a counterclaim not inconsistent with the right of Salit to recover at the time upon his mortgage, there would-be no legal objection to the former bringing an independent action such as this against the latter. The fact that he was a party to the foreclosure suit and had even set forth his claim in an answer would not amount to a bar unless that claim had been passed upon. Honsinger v. Union Carriage & Gear Co., 175 N. Y. 229. But if Weinman's agreement was inconsistent with the claim of Salit to the present payment of his mortgage, he, having been a party to the foreclosure suit, would be barred from subsequently bringing another action, even though he had defaulted. A judgment finding the mortgage due would be res adjudicata upon every claim, to the contrary. Blair v. Bartlett, 75 N. Y. 150.
Nowhere in this case does it appear that Salit ever promised to pay Weinman the $370 advanced to keep alive the first mortgage. The agreement with the mortgagor and the third mortgagee was that the second mortgagee would make no claim for Ms interest or principal until the mortgagor or owner of the equity had paid to the third mortgagee from the rents of the property $370. This was a binding agreement and could have been enforced, and was inconsistent with the claim of the second mortgagee to the immediate payment of his mortgage. Weinman, the third mortgagee, should have pleaded these facts in the foreclosure suit to which he was a party, and having failed to do so, or to there litigate the question, he is now barred from maintaining this action upon the alleged agreement. The finding of the judgment in the foreclosure case that the second mortgage was due and payable could not be true if Salit had agreed with Flashenberg and Weinman for a valuable consideration that he would subordinate his second mortgage to the payment by the mortgagor of the $370 due Weinman out of the rents.
The judgment for the plaintiff and the order deny7 ing the motion for a new trial are reversed and set aside, and, as it is impossible for the plaintiff to recover upon the facts alleged, judgment absolute is given to the defendant, with the costs of the last trial and the appeal. .
Maddox and Aspinall, JJ., concur.
Judgment and order reversed, with costs.