Court Opinion

ID: 5230594
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:55:26.474835+00
Date Added: 2024-06-11T08:27:39.450189
License: Public Domain

Clarice, J. (dissenting):
In December, 1909, John T. Williams, husband of the plaintiff, was the owner of certain property on-Madison avenue, Hew York city. There was a first mortgage of $160,000 thereon held by the Union Dime Savings Bank and a second mortgage thereon for $30,000 then held by the defendant. The Rutherfurd Realty Company had its office in the office of Wells & Snedeker. Mr. Snedeker of that firm was its president,. Mr. Wells was its managing director, and his son was its treasurer. The interest was in arrears on these two mortgages at that time. Mr. Wells requested additional security for the mortgage held by the defendant and also to secure the payment of $4,000 interest then due on the first mortgage. Mr. Williams stated that he had a large manufacturing plant in Bristol, Va., which was practically free and clear, but Mr. Wells did not then wish to take a mortgage on that.
The plaintiff at that time was the owner in fee simple of property in Stamford, Conn., and Mr. Wells asked Mr. Williams if he could get a mortgage from Mrs. Williams on that property, but Mrs. Williams declined to give a mortgage on that property as additional security for the Madison avenue mortgage. Subsequently Mr. Williams told Mr. Wells that Mrs. Williams would agree to give a mortgage on the Stamford property for enough to pay the interest on the first and second mortgages on the Madison avenue property and the balance to be paid in cash to Mr. Williams, and on the 12th of January, 1910, Mr. Williams signed the following letter, which had been dictated by Mr. Wells:
“Messrs. Wells & Snedeker:
“Dear Sirs.—I agree to give) you a mortgage for $35,000 on the Stamford property, out of which your clients are to advance $12,500 to be used as follows: $4,000 and interest *180thereon to pay interest to Union Dime Savings Bank on account of the Madison Avenue property; $900 for interest on the second mortgage; $625 for interest on the Stamford property, and the balance in cash. The balance of the mortgage, $22,500, less reasonable fees, to be advanced when your clients are satisfied as to the Virginia property and will receive it as security.”
On January 12, 1910, plaintiff and her husband executed a mortgage to the Butherfurd Bealty Company for $35,000 upon the Stamford property, subject to an existing mortgage thereon for $50,000, conditioned as follows: “The condition of this deed is such that Whereas the said John T. Williams is justly indebted to the said grantee in the sum of Thirty-five thousand ($35,000) dollars, as evidenced by his promissory note for that amount of even date herewith, payable to' the said grantee ninety days after date, for value received, with interest at the rate of six per cent per annum; Now, Therefore, if said note shall be well and truly paid according to its tenor, and the said grantors shall also pay to said grantee when requested all moneys by it expended for insurance on the aforesaid premises or any part thereof, then this deed shall be void, otherwise to remain in full force and effect.”
On various dates from January 14 to May 19, 1910, the defendant advanced upon the promissory note referred to $14,935.24. Mr. Williams testified that on May nineteenth he went to Mr. Wells’ office to see if he could get some additional money on this mortgage and that Mr. Wells said to him: “ ‘Now, look here, we might as well get this thing settled now. I am going to charge you $4,000.’ I made some objection. He said: ‘it is a question of either getting that $4,000 which we charge for acting as attorneys, or else we shall go ahead and foreclose the mortgage on the property,’ the $30,000 mortgage on the Madison Avenue property. * * * He said this to me before I signed the paper. Wells & Snedeker, as lawyers, never rendered me a bill for services. On the occasion of this interview he did not tell me what he was charging that $4,000 for. * * * They did not say anything about the $4,000 was for getting the Butherfurd Bealty Company to make this loan. He simply said he was going to charge me *181$4,000. Q. Did the Rutherfurd Realty Company pay you $4,000 so that you could pay it to Wells & Snedeker ? * * * A. No, sir, they did not; I did not get any more money.”
Mr. Wells stated that unless Mr. Williams signed the paper he produced he would not make any further advances. This paper which Mr. Williams signed and acknowledged on said May 19, 1910, after discussion and to obtain the said advance of $2,500, is as follows:
“Whereas John T. Williams and Louise, his wife, executed a certain mortgage to the Rutherfurd Realty Company affecting property at Stamford, Connecticut, and recorded in the land record office in Book 140, page 214; and, Whereas, various amounts have been advanced thereon, amounting at this date to Eighteen thousand nine hundred and thirty-five and 24/100 dollars ($18,935.24) of principal and Two hundred and four and 33/100 ($204.33) dollars of interest on advances to this date, Now it is Agreed, that no further advances shall be made but that said mortgage shall stand as security for said amounts and interest, and also as collateral security for a certain other mortgage of Thirty thousand ($30,000) dollars held by said Rutherfurd Realty Company on premises Nos. 778 and 780 Madison Avenue, in the Borough of Manhattan, City of New York, and the said John T. Williams hereby charges the premises described in the mortgage recorded at Stamford with the payment of the said mortgage on Madison Avenue.
“Witness the hand and seal of said John T. Williams this 19th day of May, A. D. 1910.”
After the signing of this paper Mr. Williams received $2,500, which is included in the amount set forth therein.
On August 2, 1911, Mrs. Williams’ attorneys wrote Wells & Snedeker asking for the dates and amounts of each separate advance making up the total claimed, and on the seventh day of August they sent a statement in writing, the final item thereof being “ May 19, fees and services in all matters, $4,000.”
In November, 1911, Mrs. Williams had arranged for a new and additional $50,000 mortgage on her property in Stamford, but the new mortgagee declined to close the transaction unless the satisfaction piece of the Rutherfurd Realty Company mort*182gage was delivered. Under date of the tenth of November Mrs. Williams wrote to the defendant:
“ Gentlemen.—With reference to your claim that the sum of $18,935.24 is the amount advanced' by you under the terms of the mortgage and the note securing the same covering my property at Stamford, Conn., I beg to advise you that the item of $4,000 of May 19, 1910, included in that amount, is not an advancement covered by the said note or mortgage, and that you have no right to exact the payment of the same. If you insist that you will not deliver a release of the said mortgage upon payment of $14,935.24 with interest and insist upon your alleged right to receive the additional $4,000, in order to clear the title and carry out my contracts with third parties, a condition of which is the release of your mortgage, I shall pay the same under protest and under duress, and hereby notify you that for this illegal exaction steps will be promptly taken to hold you responsible in suitable legal proceedings. As you are aware, there is not the slightest foundation for any claim on your part that the said $4,000 was advanced to me or to any one on my behalf or with my knowledge, and as you must be aware, there is absolutely no foundation for your contention that the same is due to you and secured by the mortgage in question.”
On the llth of November, 1911, at Mr. Wells’ office, Mrs. Williams’ attorneys offered Mr. Wells $16,500 in legal tender in satisfaction of the amount claimed to be due under this Stamford mortgage. Mr. Wells declined to take it. Mr. Greene said that that was the exact amount due under the agreement and interest. Mr. Wells stated that it was not the right amount; that there was $4,000 additional. Mr. Greene then stated that a new loan was being closed on the Stamford property, and that it was necessary that a satisfaction piece be obtained of the Wells mortgage, and that, therefore, the $4,000 would be paid under duress and compulsion. Mr. Wells replied that it was justly due. Mr. Greene then paid to Mr. Wells the full amount claimed, being $20,840.58. Shortly thereafter this action was instituted to recover the said amount, the summons being dated November 29, 1911.
As shown by the testimony, and as apparent on the face of *183the letter of January twelfth, there was in contemplation a substitution of a mortgage upon Mr. Williams’ Virginia property for the mortgage on his wife’s Stamford property -under certain circumstances. This substitution was never made. A large part of the moneys advanced by the defendant was expended in the payment of interest, taxes and the like upon the Madison avenue property, upon which there was a mortgage of $160,000 prior to the defendant’s mortgage of $30,000; so that this disposition of the moneys which defendant advanced was expended for its benefit by bettering its security, evidenced by the second mortgage on said property.
We cannot find what services were rendered which were of the claimed value of $4,000. The only tangible service was the obtaining of the advances of $14,935.24 on this Stamford mortgage. The work, labor and services of Mr. Wells in persuading himself, as managing director of the defendant, to take the mortgage and advancing the money hardly seem to have called for such remuneration; nor is $4,000 a reasonable fee or bonus for the obtaining of $14,935.24, especially when interest was paid on said sum and it was amply secured. Mr. Wells claims that his relation to Mr. Williams from the inception of this affair in December down to the nineteenth of May, when the last advance was made, was that of attorney and client. If so the obligation rests upon him to show the fairness of this transaction.
The question presented upon this appeal is whether, under the circumstances disclosed, the payment by Mrs. Williams of the $4,000 for services claimed to have been rendered by Wells & Snedeker as attorneys to her husband down to May 19, 1910, included by them in the amount claimed to be due to the Rutherfurd Realty Company, of which Mr. Wells was the managing director and Mr. Snedeker the president, upon the mortgage upon her property executed by her to said company, after having made a legal tender of the full amount of the actual moneys advanced with interest thereon, and under a claim of duress and compulsion in order to obtain a satisfaction of said mortgage in order to consummate a larger loan upon the same security which had been negotiated conditioned upon the satisfaction of defendant’s mortgage, was such an *184involuntary payment as in the contemplation of the law can be recovered by action.
In Kilpatrick v. Germania Life Ins. Co. (183 N. Y. 163) a mortgage given on the 28th of August, 1899, was payable on August 1, 1901, with interest payable semi-annually on February and August first. The privilege was accorded the mortgagor of paying the principal sum and interest at any time after August 28, 1900, and prior to August 1, 1901, upon the payment, in addition to the principal sum and interest, of the further sum of $1,000. The mortgage also contained the usual covenant that upon default in the payment of interest the principal sum should, at the option of the mortgagee, become due and payable immediately. There was default in payment of interest due August 1, 1900. The mortgagor sought to make some arrangement as to the payment of interest, but was informed that counsel had been instructed to foreclose, and a summons and complaint in a foreclosure action was served. Thereafter he notified the counsel for the defendant that he would be ready to pay the amount of the bond and mortgage with interest within a day or two, and that he had arranged for a new loan on the same premises. Defendant’s counsel informed the' mortgagor that he was sorry, but his client had withdrawn its foreclosure suit, and it was' actually discontinued by an ex parte order, and proposed to sue for the interest only, and that they would not receive payment of the principal sum due under the bond and mortgage unless plaintiff paid the additional sum of $1,000. The mortgagor paid the principal, interest and $1,000 bonus, protesting at the same time that the latter was an illegal exaction and was money not due the defendant. The court said: “ The. sole question presented is whether the payment of this bonus of one thousand dollars was, under the circumstances, voluntary or exacted when the plaintff was under duress. * * * The plaintiff, in view of the way business is done in giving a new mortgage to pay off the old one, could not wait to make a tender and take legal action and he was not obliged to. He could submit to the exaction and pay the bonus, and sue to recover it back, because such a payment is not voluntary. In effect the defendant held plaintiff’s property in its grasp through its lien thereon ancj *185would not surrender it until the unlawful exaction was complied with. The payment was made to free the property from the duress as much as if it had been a chattel and the defendant had it in his possession under a pledge, refusing to part with it unless the bonus was paid. Under these circumstances the compulsion was illegal, unjust and oppressive and the plaintiff having submitted under protest had the right to recover, according to the authorities. The refusal of the defendant to accept the mortgage debt and interest unless the bonus was paid, placed the plaintiff in a position where he was compelled to submit to the exaction in order to receive a satisfaction of the defendant’s mortgage and secure the money on the new loan which would protect him in the emergency.”
It seeins to me under that authority, and the cases therein cited, that the well-established rule that a payment involuntarily made under duress of goods may be recovered, has been extended to cover real estate transactions, and that, under the facts developed in the case at bar, the court was justified in submitting the facts to the jury for them to determine whether, within the definition as given by him, the payment complained of was voluntary or involuntary, and that the jury was justified in finding that the plaintiff was compelled to make a payment not contemplated in the original transaction and for which she was not liable, to free her property from the lien of the mortgage, so that she might consummate the loan which she had negotiated for the purpose of paying off this prior mortgage upon her property.
The judgment and order appealed from should, therefore, be affirmed, with costs to the respondent.
Dowling, J., concurred.
Judgment reversed, new trial ordered, costs to appellant to abide event. Order to be settled on notice.