Case Name: Annie Gilbert, Appellant, v. Real Estate Company of Brooklyn, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1913-02-21
Citations: 155 A.D. 411
Docket Number: 
Parties: Annie Gilbert, Appellant, v. Real Estate Company of Brooklyn, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 155
Pages: 411–413

Head Matter:
Annie Gilbert, Appellant, v. Real Estate Company of Brooklyn, Respondent.
Second Department,
February 21, 1913.
Usury—suit against purchaser to cancel bond and mortgage as usurious — notice — erroneous nonsuit.
In a suit to cancel a bond and mortgage as usurious, it appeared that the plaintiff executed the same to her daughter so that the plaintiff might through her agents raise money thereon; that the defendant, with notice that the mortgage had no inception by delivery to the daughter for a bona fide consideration, purchased it through the plaintiff's agent for an amount less than it was made to secure and that the plaintiff had executed the usual estoppel certificate.
Held, that the certificate protected the purchaser of the mortgage only to the amount of the money advanced on the faith of it, and that a non-suit was error.
Appeal by the plaintiff, Annie Gilbert, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Kings on the 24th day of October, 1912, upon the decision of the court, rendered after a trial at the Kings County Special Term, dismissing the complaint.
George G. Reynolds, 2d, for the appellant.
Frank W. Holmes, for the respondent.

Opinion:
Thomas, J.:
The defendant for $3,400 purchased a bond and mortgage dated May 2, 1911, to secure $4,000, in form made by the plain tiff to her daughter Pillion, but the purpose of its execution and record was to enable the plaintiff through her agents to sell the mortgage to some person. Her agent Doremus offered the mortgage to the defendant for $3,400, and it was accepted by an instrument dated July 11, 1911. The plaintiff executed the usual estoppel certificate on August 16, 1911, the day set for closing, which was postponed to August 11, 1911, when the assignment dated August sixteenth was delivered and recorded. This action is to cancel the bond and mortgage as usurious, and for such other and further relief as may he just. There was a nonsuit. This was error. The certificate protected the purchaser only to the amount of the money advanced on the faith of it. (Miller v. Zeimer, 111 N. Y. 441.) The offer of Doremus was not accepted on the faith of the certificate, as it was not in existence until August sixteenth. But it is urged that such relief is not asked by the complaint nor raised on the trial. The prayer for relief includes it, and when the complaint is summarily dismissed without findings the plaintiff is not obliged to state in the record upon what grounds he deems himself entitled to relief. As the record is, the plaintiff is plainly entitled to a decision that the bond and mortgage are valid only in the amount of $3,400 and interest. There is also evidence showing prima facie that defendant had notice that the plaintiff and not her daughter was the real owner of the securities. The plaintiff testified that Mr. Caldwell, defendant's attorney, was informed by her on August sixteenth, the day the estoppel certificate was executed and the day previous to the final closing, that she must have $4,000 and that he promised it to her. This indicated in some degree to the attorney that the plaintiff was the real party to the transaction, and this evidence is strengthened by the fact that the $3,400 was applied to discharge liens to the extent of $3,114.85, which showed that the consideration was for the benefit of the mortgagor. (Thomas Mort. [2d ed.] § 639, p. 425.) Moreover, Mrs. Pillion testified that Mr. Caldwell said to Mr. Purdy, who represented the plaintiff's lawyers, " I understand this is a family affair," and the latter replied, " Yes." The credibility and force of this evidence as it shall be admitted or denied is entirely for the trial court, but it was sufficient evidence of notice to defendant that it was purchasing securities that had no inception by delivery to the daughter for a bona fide consideration.
The judgment should he reversed and a new trial granted, costs to abide the final award of costs.
Jerks, P. J., Burr, Carr and Woodward, JJ., concurred.
Judgment reversed and new trial granted, costs to abide the final award of costs.