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Smith v. Isle of Wight Co.

3 N.Y.S. 300 Court N.Y. Sup. Ct. Decision date 1888-12-13 English

Delivered by Pratt, J.

Contents

Majority

p. 300
Smith v. Isle of Wight Co. et al.
(Supreme Court, General Term, Second Department.
December 13,1888.)

Headnote

•Corporations—Actions—Defense of Usury—Judgment—Default.
In an action to foreclose a mortgage executed by a corporation, brought against the corporation and the guarantors of the mortgage and purchasers of the land, defendants set up usury, and extension of time discharging the guarantors. After the cause had been noticed for trial, defendants amended their answer by striking out the second defense. Held, under Laws 1850, c. 173, § 1, forbidding a corporation to interpose the defense of usury, that the amended answer set up no defense, and that judgment by default was properly awarded.
Appeal from special term,- Queens county.
Action by Frederick H. Smith, Jr., to foreclose a mortgage given by the •defendant the Isle of Wight Company, of which the defendants Rufus W. Leavitt, Sidney De ICay, Van Dewater Smith, and Philip Kobbe were guarantors. The property covered by the mortgage had been sold, on foreclosure of a second mortgage to Robert W. Jaggard, and was by him transferred to Eliza M. Leavitt, and by her to Morris E. Leavitt, and by him to the Lawrence Beach Company, all of whom were made defendants. The answer of the defendants the Isle of Wight Company, the Lawrence Beach Company, Eliza M. Leavitt, Rufus W. Leavitt, Morris E. Leavitt, and Sidney De Kay •.set up, as one defense, that the mortgage was usurious, and as a second de
p. 301
fense that the time of payment having been extended by contract with Eliza, M. Leavitt, the other defendants were discharged. The other defendants defaulted in answering. After the cause had been noticed for trial at the J uneterm, 1888, the defendants amended their answer, by striking out the second defense, leaving only the defense of usury. At the June term of the circuit court, on motion of plaintiff, judgment was entered by default. Defendants-moved in the special term for leave to open the default, and that they be.alto wed to defend on the ground that the action had not been properly noticed. Motion denied, and defendants appeal. Laws 1850, c. 172, § 1, provides that, “no corporation shall hereafter interpose the defense of usury in any action.”
Argued before Barnard. P. J., and Pratt, J.
T. V. Cator and Frederic Eder, for appellants. Herman Kobbe, for respondent.

The amended answers constitute no defense. Laws 1850, c. 172, § 1; Curtis v. Leavitt, 15 N. Y. 86 . They could have been stricken out as frivolous. If a defendant wishes to insist upon the questions raised by such an answer, he must be ready when the cause is reached. The court was-right in giving judgment.

The affidavits do not show any ground for relief as a matter of favor; rather the contrary. It appears that the plaintiff is willing to sacrifice a large part of the debt to get his money. That is an abundant answer to the opinions expressed in the papers as to the great value of the property. The impression produced upon the court is that the property is worth less than the debt. Order affirmed, with costs.

Barnard, P. J., concurs.