Universal Trust Co. v. Boehanski

The defendant Frank Boehanski on March 17, 1900, applied to plaintiff for membership in its association and subscribed for 30 installment shares of class E of its stock, of the maturity value of $100 each, agreeing, among other things, to pay or cause to be paid thereon monthly dues of $7.50 and to abide by its articles of association and by-laws or any amendments thereto. His application was granted; and a certificate for the said shares was issued to him upon the agreement stated in the application. At the same time he applied for a loan of $3,000. This was made and accepted upon the divided mortgage plan. As security, he assigned the said shares of stock to plaintiff, and gave the two mortgages herein sought to be foreclosed, aggregating $3,000, upon the property described in the complaint. The former of these was given to one Andrew Einn, who afterward assigned it to secure the payment of the sum of $2,400 in five years from its date, with interest at the rate of 6 per cent, per annum, payable semiannually. The latter, for $600, was given to plaintiff, subject, however, to the former one of $2,400, which plaintiff, among other things, agreed to pay and have canceled of record upon the maturity of said shares of stock and upon the surrender of same by said mortgagor to said mortgagee. This mortgage, in terms, made the bond accompanying it a part of it as effectually as if set forth therein at length. It contained a proviso that, if the mortgagor should pay the sums of money mentioned in the condition of said bond, then the estate granted by it should cease, determine and be void, and also contained an agreement that, after one month’s default in any of the payments provided for by or of any condition of said accompanying bond or of said) mortgage, the whole of the principal of said mortgage or the balance thereof remaining unpaid, together with all arrearages of interest and premiums and all fines and such other sums as might be due under the articles of association and by-laws of said mortgagee, or any amendments thereto, should be payable thereon.

The bond accompanying it provided for the payment of $30 monthly, consisting of $15 interest, $7.50 premium, and $7.50 dues upon the said shares of stock, and, among other things, contained an agreement on the part of plaintiff to pay when due the interest on the prior mortgage and to pay off and cancel the same of record upon the ma

[1] The mortgage to plaintiff was subject to a prior one of $2,400, which plaintiff agreed to pay and have canceled of record upon the maturity of the shares of stock which the mortgagor had in plaintiff’s association and upon the surrender of same. It did not in terms specify how the payments or what payments were to be made, but showed on its face that it was a building mutual loan and accumulating fund association mortgage, and that such payments consisted or were to consist of interest, premiums, and dues, and were to be made as required by the accompanying bond, which was made a part of the mortgage as effectually as if set forth therein at length. Although the deed to Anna Boehanski did not refer to plaintiff’s bond and mortgage in any way, yet the mortgage was duly recorded at the time of the delivery of the deed, so that the said grantee is chargeable with, and must be deemed to have had, notice or knowledge of its terms and conditions, as well as of those of the accompanying bond, which was a part of it. Real Prop. Law (Consol. Laws 1909, c. 50) .§ 291; Tiedeman, Real Prop. § 338; Peck v. Mallams, 10 N. Y. 509 , 518.

[2] And the payments made by her after the transfer, together with her acts and the acts of plaintiff in connection with such payments, warrant the conclusion that she had actual knowledge of such terms and conditions.

[3] The conveyance was by quitclaim deed, and, although it did not refer to the incumbrances on the property in any way, the grantee took it subject to such incumbrances. Frank Boehanski could not convey, and Anna Boehanski could not acquire, any greater estate than the former had at the time of the transfer. He was the vendor and she was the purchaser of and has acquired nothing more that a mere equity of redemption. Real Prop. Law (Consol. Laws 1909, c. 50) .§ 245; Sage v. Cartwright, 9 N. Y. 49 ; Peck v. Mallams, 10 N. Y. 509 , 519; Sparrow v. Kingman, 1 N. Y. 242 , 247; Kirtz v.

[4] Plaintiff was not bound to take notice of the transfer, but had the right to rely upon its security, and to require the performance of the agreement therein set forth, and, upon default, to enforce the lien thereby given to it, irrespective of any subsequent act on the .part o'f Frank Boehanski. Deitch v. Staub, 115 Fed. 309 , 53 C. C. A. 137 ; Miller v. Wayne Building & Loan Association, 32 Ind. App. 480 , 70 N. E. 180 . And the lien could not be enforced until such default, regardless of the source of the payments.

[5] On the other hand, the defendant Anna Boehanski, with knowledge of the terms and conditions of plaintiff’s bond and mortgage, made the monthly payments required thereby for a period of something more than six years after the transfer to her;- and plaintiff during this time applied such payments in accordance with the provisions of the same, without objection on the part of the former, so that she is estopped and cannot now be heard to complain. For these reasons, it seems to me that the payments were properly applied. Of course, she is liable only to the extent of her interest in the land, and there can be no judgment for deficiency against her.

Judgment accordingly.