Court Opinion

ID: 5377061
Source: CourtListenerOpinion
Date Created: 2022-01-08 08:41:16.012816+00
Date Added: 2024-06-11T08:30:04.514259
License: Public Domain

Heffebnax, J.
(dissenting). I dissent and vote to reverse the judgment under review.
In her complaint plaintiff alleges two causes of action. The first is based on fraud. The second is grounded on the claim that there was nothing due on the mortgage sought to be foreclosed because that mortgage had been consolidated with other mortgages owned by defendants under an extension and consolidation agreement.
On this appeal we may disregard the first cause of action and dispose of the issues on the theory advanced by plaintiff in her second cause of action.
The Federal Land Bank held a first mortgage on plaintiff’s property. Defendants were the owners of the second, third and fourth mortgages which were liens against the premises. Stella Ettinger, a sister of plaintiff, had the record title to the premises. Plaintiff requested defendants to consolidate their three mortgages into one and to grant her an extension on the payment of various installments. After some negotiation defendants, in consideration of a bonus of $500, agreed that the mortgages should be consolidated. An agreement to that effect was drawn by defendants ’ lawyer and was signed by defendants and by plaintiff. There is some dispute as to whether or not Stella Ettinger signed the agreement. Whether she did or not is of no importance because defendants knew that plaintiff was the *478owner of the premises and had in her possession an unrecorded deed to the property from her sister. The agreement was left in escrow with defendants’ lawyer to he held by him until plaintiff paid a balance of $150. Subsequently the balance was paid and plaintiff received the consolidation agreement. Later defendants instituted an action to foreclose the second mortgage. Plaintiff did not appear in that action and judgment of foreclosure by default was rendered against her. She contends that her failure to appear was due to fraud practiced on her by defendants. She asserts that defendants advised her that if she did not appear in the litigation they would purchase the property and later reconvey it to her.
From the mouths of the defendants has come proof that they executed the consolidation agreement and recognized its existence. They were bound by its provisions. The consolidation agreement was in full force and effect when defendants attempted to foreclose their second mortgage. They could not then maintain an action to foreclose that mortgage because it had been superseded by the consolidation agreement. (First Natl. Bank v. Sleeper, 12 F. 2d 228 [C. C. A. 8th]; Bank of United States v. Chemical Bank & Trust Co., 140 Misc. 394; Matter of Japan Cotton Trading Co., Ltd., v. Farber, 233 App. Div. 354; Gladden v. Keistler, 141 S. C. 524; Johnson v. Tunstall, 25 S. W. 2d 828 [Texas]; Chouteau v. Suydam, 21 N. Y. 179.)
Hill, P. J., and Brewster, J., concur with Bliss, J.; Heefernan, J., dissents and votes to reverse in an opinion in which Schenck, J., concurs.
Judgment affirmed, with costs.