Court Opinion

ID: 5208062
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:06:38.266969+00
Date Added: 2024-06-11T08:27:19.491053
License: Public Domain

Houghton, J. (dissenting):
Notwithstanding the recital in the instrument itself that it shall be considered as security for future advances, the uncontradicted evidence shows that the $10,000 mortgage of Strasbourger on the Park avenue property was collateral to one or both of the $10,000 mortgages which he held on the Madison avenue property. The *700composition agreement which Strasbonrger signed recites that it is only collateral to these mortgages or one of them, and witnesses Goss and Eaton testified that Strasbourger so admitted when the composition agreement was about to be entered into, and Strasbourger was not called to deny their statements. •' That the $10,000 mortgage on the Parle avenue property was collateral and was not intended to be security for any future advancements is further evidenced by the fact that after the. composition agreement was.entered into, Strasbourger took a $40,000 mortgage on the Madison avenue property for the purpose of securing any future advancements which he might make. Strasbourger received payment in full of both of the $10,000 mortgages which he held on the Madison avenue property. If the $10,000 mortgage on the Park avenue property was collateral only, then of course it is. wiped out by payment in full of the Madison avenue mortgages. The .holding of the referee that the $10,000 Park avenue mortgage was given' to secure future advances was, therefore, unauthorized, and the allowing of. Strasbourger to take any part of the surplus was error.
With respect to the Kertscher & Co. mechanic’s lien of $4,607, the r.eferee was also in error. The 2d paragraph of the composition agreement provided that this lien should stand unless within a year $2,000 should be paid, and upon such payment it should be satisfied. The 4th paragraph set forth the names and amounts to which various contractors and materialmen were .entitled by reason of. furnishing labor and material on fhé Madison avenue property, and it was agreed that Strasbourger should pay them the. respective amounts. Xmong the persons to be so paid were Kertscher & Co., who were To be paid $6,135. To secure the payment thus to be made Strasbourger was tQ be and was secured by a $40,000 mortgage which was to be ahead of the mortgage to be given. to the trustee for the benefit of all creditors. Kertscher & Co.’s full claim was $16,135, $6,135 of which was to be paid, by Strasbourger, as indicated, and the balance of $10,000 they took their chances of recovering under the general mortgage to be given to the trustee for the benefit of all creditors. Kertscher & Co. refused to satisfy their lien, as some of the other lienors consented to do, unless they were paid within one year the sum of $2,000. It does not matter that it was not specifically provided who might make the payment. *701The subsequent lienors could dp so and thereby save to themselves $2,607.'
It is claimed that because Strasbourger paid the $6,135 to Kertseher & Co. which'he by another instrument agreed to pay, they did get $2,000, and that, therefore, they did within the year receive $2,000, and hence their lien of $4,607 was discharged.
This to my .mind is wholly unjustified. The agreement with respect to the payment of the $2,000 was an agreement for payment on account of that lien, not payment from some other source- and on some other account, or on account of some other claim. I-t might as well be said, if they received $2,000 as a gift or from their general business, the lien was to be discharged. If the $4,607 is collected from the Park avenue property, then that amount should be deducted from the. $10,000 provided for under the general trustee mortgage. It was uncertain what the Park avenue property was worth. Kertseher & Co. had a- valid lien. They were not willing to satisfy it absolutely: If they were paid $2,000 on account of it within a year, they were willing to do so and- take their chances on the trustee mortgage for the balance.
I think the order should be modified by directing that the Kertscher & Co. claim assigned to the Monona Company of $4,607, with interest, be first paid, then the liens of the Kew York Wooden Flooring Company and Williams & Co., and the balance paid to the trustees on the mortgage' given for the benefit of all creditors.
Order affirmed, with ten dollars costs and disbursements against • the appellants. - ■