Case Name: Edwin M. Slote and Another, as Trustees in Bankruptcy of Peter Barmann Brewing Company, Inc., Respondents, v. Cascade Holding Corporation, Appellant, Impleaded with Alfred Handel and Others, Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1937-01-14
Citations: 249 A.D. 332
Docket Number: 
Parties: Edwin M. Slote and Another, as Trustees in Bankruptcy of Peter Barmann Brewing Company, Inc., Respondents, v. Cascade Holding Corporation, Appellant, Impleaded with Alfred Handel and Others, Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 249
Pages: 332–336

Head Matter:
Edwin M. Slote and Another, as Trustees in Bankruptcy of Peter Barmann Brewing Company, Inc., Respondents, v. Cascade Holding Corporation, Appellant, Impleaded with Alfred Handel and Others, Defendants.
Third Department,
January 14, 1937.
Hirson & Bertini [MaxL. Rothenberg of counsel], for the appellant.
Louis Winer [Seymour J. Shapiro with him on the brief], for the respondents.

Opinion:
Hill, P. J.
Defendant Cascade Holding Corporation has appealed from an order of the Albany Special Term denying its motion to dismiss the plaintiffs' amended complaint under rule 107 of the Rules of Civil Practice. The ground for the motion was that a judgment had been rendered on the merits determining the issue • sought to be raised and disposing of the cause of action pleaded in plaintiffs' complaint. The complaint in the present action alleges that the mortgage, foreclosed against the property of the bankrupt of which plaintiffs are trustees, was purchased by this appellant, the plaintiff in the foreclosure action, with money belonging to the bankrupt. The mortgage was given originally by Peter Barmann Brewing Company, Inc., now bankrupt, to the Kingston Trust Company, assigned by it to one Edelman and by him to appellant Cascade Holding Corporation, it having been the plaintiff, as I have said, in the foreclosure action. The validity of the mortgage at the time it was given is not assailed in this action, the gravamen of the complaint being that the plaintiff in the mortgage foreclosure, defendant and appellant here, was not the owner of the mortgage, but only a trustee holding it for the benefit of Peter Barmann Brewing Company, Inc., having purchased it, as this complaint alleges, with the money of the brewing company. It was determined in the earlier action that Cascade Holding Corporation was the owner of the mortgage and was entitled to a judgment of foreclosure and sale of the property described in the mortgage.
This matter has been in litigation since August, 1934, when the action to foreclose the mortgage was begun. Thereafter, and on October twentieth, the mortgagor brewing company was adjudged a bankrupt and a trustee of the bankrupt estate was named, who was later succeeded by the trustees who are now plaintiffs. In March, 1935, by an order of the Special Term, the trustees in bankruptcy of the mortgagor, upon their own application, were permitted to intervene in the action as parties defendant. No answer on their behalf was served. Notice was given them of all proceedings in the mortgage foreclosure, including the motion for judgment of foreclosure and sale. This was granted on July 9, 1935, without opposition, and a notice of the sale of the premises on July thirty-first was served upon the attorney for the trustees. On July thirtieth, the day previous to the sale, these trustees made a motion in the foreclosure action to vacate the judgment. This was denied. An appeal was taken by the trustees from the order of the Special Term and on January 23, 1936, this court affirmed the order of the Special Term (Cascade Holding Corp. v. Barmann Brewing Co., Inc., 246 App. Div. 883). Every fact set up in the complaint under review was pleaded in the answer which accompanied the motion papers to vacate the judgment.
The issue as to the right of the Cascade Holding Corporation to foreclose the mortgage was tendered in the foreclosure action. When it was determined therein that the plaintiff mortgagee by assignment owned the mortgage and had a right to a judgment of foreclosure and sale, every issue here sought to be raised was finally determined. I cite from the case relied upon by the respondents (Jasper v. Rozinski, 228 N. Y. 349): " ' It is a general rule that a judgment is conclusive between the parties and their privies upon all matters embraced within the issues in the action which were or might have been litigated therein. It is immaterial whether issues are joined by an answer to the complaint or tendered by the plaintiff and left unanswered. The rule applies as well to a judgment by default when the facts stated warrant the relief sought as to one rendered after contest ' " (p. 357). The Rozinski case is not an authority to support respondents' position. The facts distinguish it.
The order should be reversed on the law and facts, with fifty dollars costs, and the motion granted, with costs.
McNamee, Crapser and Heffernan, JJ., concur; Rhodes, J., dissents, with an opinion.